Impact of Startups on Local Economies

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While startups may be modest in size, they have the potential to cause economic ripples with favorable impacts on people's lifestyles. A startup refers to a young company who have just started their first operations, with the goal of bringing unique goods or services to the market for which they think a demand is needed. Startups are extremely valuable sources of innovation and civilizational growth from an economic standpoint. By attracting new sector investors, creating new employment, establishing new markets, and assisting in the rise of goods and services production, their formation and development help provide the groundwork for a more dynamic local development.

Many believe that startups have a negligible impact on the economy due to being rather high-risk with high rates of failure, which creates constant unpredictability within the markets. However this is not true; these companies can prospectively impact the economy positively through innovation. In reports from 2017 created by the Center for Economic Studies at the US Census Bureau, they have found startups disproportionately have higher technology, allowing for increased productivity. In addition, startups create "new markets or completely transform old markets by introducing products that change the world." With advancements in technology and more items, startups then make competition and disrupt the economy to evolve. 

Not only are startups able to create more goods, but they can help grow the employment rate. According to data from the International Economic Development Council, startups have been responsible for 10% job growth worldwide since 2017, growing the economy with jobs and opportunities. It has been proven that there would be no net job growth in the US economy without startups. In another 2017 report written by the Progressive Policy Institute, "private-sector job growth is significantly higher where the startup activity is high. In contrast, regions with little startup activity experience less than half the job growth."

We have seen the incredible impact startups have had on the economy throughout the years, but there is work to be still done. The more we advocate and promote small businesses/startups, the more our economy will improve. As a society, we have to recognize the large impact on the national and the local level. To do this, we must empower small businesses and help them grow as a company.