Question: Write a business report that explains the contribution that business makes to the Australian economy and society. Use a business case study to outline the role of entrepreneurs and their contribution to business success.
Businesses are an important part of Australia’s economy and society as they provide goods and services to satisfy consumer wants and needs, generate employment and income and keep the market and economy functioning. The role of entrepreneurs is to introduce new and innovative business ideas, fill the gaps in the market and stimulate economic activity and growth. Entrepreneurs can be seen as catalysts which establish businesses and set the process of growth and industrialisation in motion. They significantly contribute to Australia’s economic success and citizens’ quality of life. For example the cofounders of Lush Cosmetics were able to find a gap in the market and catered towards a new generation which was becoming increasingly environmentally aware which contributed to their business’s global success.
Contributions of Business to the Australian Economy
Businesses help to stimulate the growth of Australia’s infrastructure, transport, technological and communications development and the nation’s overall advancement. By contributing to the cycle of economic activity and growth, businesses aid to sustain Australia’s progress, quality of life and international standing.
Large businesses require a substantial number of employees and employ about one third of the Australian workforce. By creating and maintaining jobs, large businesses aid the economy by decreasing unemployment and increasing the overall income level which means individuals have more disposable income to spend. Increased consumer activity has a domino effect on the market because as demand increases, so does production, supply and business success. Due to the economies of scale, large businesses are able to produce significant quantities of goods at lower costs per unit and therefore provide cheaper goods and services to consumers. Large businesses also pave pathways for foreign trade and relations by exporting products overseas and earn a majority of the nation’s export earnings.
Small to Medium Businesses (SMEs)
In Australia, small to medium businesses are classified as enterprises which have between 1-200 employees. In 2014 and ABS data collection discovered that SMEs supply almost 70% of total Australian employment, hiring about 4.7 million people nationally. Small to medium businesses are a vital part of the Australian economy as they play a large role in employment, wealth generation, entrepreneurship, consumer choice and innovation. Local businesses are also beneficial as they keep money within the community or nation and “are twice as efficient in terms of keeping the local economy alive” according to NEF researcher David Boyle. It is therefore important to support SMEs in order to keep the circular flow of income and economy stimulated.
Contributions of Business to the Australian Society
Australian businesses help to satisfy consumers’ needs and wants by providing goods and services. By providing means of social development and amenities they boost the nation’s quality of life. Businesses are crucial to society as they provide employment, income and the power for individuals to make choices about how to live their lives. Consumer sovereignty dictates that the Australian consumers influence several decisions that businesses take including what to produce and where to distribute certain goods and services. Businesses are also an essential factor to the operations of public services including education, medical facilities and transport. Several businesses also work towards the betterment of society including charitable organisations such as World Vision and Oxfam and knowledge creation such as the Breast Cancer Research Foundation.
Role of Entrepreneurs
Entrepreneurs always strive to discover new and more efficient methods of doing things in order to overcome the barriers of achievement. By adopting latest innovations and producing a wide range of goods and services, they increase the nation’s standard of living. Entrepreneurial activities also stimulate economic activity and help redistribute wealth and income to a large amount of people in more geographical areas. They also help eradicate regional disparities by establishing businesses in less developed areas which may stimulates further developments in the region such as schools, health, education and entertainment facilities.
Lush Cosmetics was launched in 1994 by six British cofounders who were dedicated making people feel better about themselves and the world around them. By providing environmentally friendly, supporting charities and actively campaigning against social issues such as animal testing and the environment, Lush is able to paint itself as an ethical option for increasingly aware consumers. One key marketing tool is the image Lush portrays itself as an affordable, everyday indulgence and an accessible substitute to costly spa or beauty parlour treatments. Therefore Lush products not only make consumers feel good about themselves but also enable them to make sustainable choices by opting against mass production, harmful chemicals and the exploitation of the environment. They were also able to differentiate themselves through innovative products such as bath bombs, clay masks and trendy merchandise targeted towards people of all ages. The entrepreneurs played a vital role in the success of the brand as they were able to find a gap in the market and cater towards the wants of a growing number of consumers who want to reduce their carbon footprint and take care of their environment.