Startup Company Stressing of Available Infrastructures

Globalization has resulted in economic integration.

Countries that were legally closed, such as China and India, have marched to total liberalization, and the number of new enterprises has surged. Following careful consideration, analyses of industrialization and economic development have revealed a common denominator that stands out in all of them. This denominator is the essential role that startups play in economies. It has brought about a phenomena that has demonstrated that, in order for the economy to expand and develop, new startup enterprises should be permitted to flourish in the economy by fostering a healthy and favorable atmosphere that stimulates the development of new businesses (Bhagat, Annette). Therefore this paper will present critical analyses the benefit and downside of starting a new company in any given economy. The paper will identify and discuss the main three benefit and disadvantage of a startup company and then draw a conclusion on the overall benefit to the economy.

Innovation

The factors which lead an individual to start a startup company are; they try to find a solution in a certain market niche which in the long run help than to make profit; due to high rate of unemployment, they lack a suitable job, and they try to use acquired knowledge and skill to start they own in order to earn income. This creative puts them in the position to start a successful company; they have financial resources or technology know-how which is necessary needed in satisfying a need in the market which the generate income. After precise analysis of those factors, irrespective of which it has shown that creativity and innovation are the driving factors of starting a new company, thus the benefit of Startup Company contribute to innovation in the economy.

Job Creation

About the high factor, due to lack of suitable job the individual come up with ideals of starting a company. Therefore, by finding a market niche, creativity, and enterprising does not only allow the individual to generate income but also offer employment opportunities to many people during the company operations. Thus, the most critical benefit of starting a business is the reduction of unemployment and creating job positions in the economy. Startup Company employs between 40-50% of the total workforce in the economy. This is mainly in small and medium scale startup enterprise which were started from the low level in the economy. This has help people in the developing economy to remove their families from poverty through self-employment and introduction of the new company. This has contributed to raise the living standard and to reduce social evils which are caused by unemployment such as robbery, prostitution, and drug abuse. By consider that, it apparent Startup Company have great benefit in the economy by generating income and job creation (Goffee, Robert, and Richard).

Increase Productivity

Due to increased competition brought by the new company in the economy, companies continues to find methods which can help them to reduce costs while adding quality value to products, use resources more efficiently, and most important improving their operations. This leads to increase in productivity, which the results to increase in the gross domestic product in the economy. This the benefit from starting new companies, this help to drive and re-inventing the economy forward by reducing unemployment and solving the economy problem by finding the market niche and filling it with new business. Even though the above benefit is very critical to the growth and development of the economy, there still some downside brought by starting the new company which includes (Hill, Charles).

Plundering of Resources

New company causes disastrous effects on the natural resources; this leads to the destruction of the environment. This is because the natural resources are few and are exploited by many enterprises that do not observe the environmental protection regulation and standards. The effects the environment by the increase in air and noise population affecting people health. The government spends a large budget on the caring for the people health thus affecting the economy negatively. This result to slow development (Mitchell, Bruce).

Stressing of Available Infrastructures

New companies stress the available roads and sewerage lines; this makes hard to have smooth followed of goods and services making other parts of the economy not to receive the products. When many companies enter the market, and the government does not expand the infrastructures, the existing one is highly overused making them ware out in the long run. This is disadvantage to the economy.

Unfavorable Competition

Due to increase in new products, as results of startup companies entering the market. It leads to a high and stiff competition of already saturated market leading to other businesses collapsing and other living the economy to search for a new market. This contest sometime leads to poor quality of goods and services from the big company which can use their massive resources to manipulate the economy. This is a disadvantage to the economy because it can’t grow (Glauner, Friedrich).

Conclusion

Based on the above discussion, it is apparent the benefit of startup companies outweigh by far the downside to the economy. Reduction in unemployment, job creation, innovation, poverty alleviation, and increasing productivity are the definite positive benefit of the starting new company. This has led to uplifting living standard and improving the quality of life for the many people. This help to decrease the number of dependent on social welfare making the economy to develop and grow.

Works Cited

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Bhagat, Rabi S., Annette S. McDevitt, and B. Ram Baliga. Global Organizations: Challenges, Opportunities, and the Future. Oxford University Press, (2017).Print.

Goffee, Robert, and Richard Scase. Corporate Realities (Routledge Revivals): The Dynamics of Large and Small Organisations. Routledge, (2015).Print.

Mitchell, Bruce. Resource & environmental management. Routledge, (2013).Print.

Glauner, Friedrich. “The Rationale of Strategy Development for Future Viability: Creating Resources.” Future Viability, Business Models, and Values. Springer International Publishing, (2016. 45-86).Print.

Hill, Charles. Schilling. Strategic management: theory: an integrated approach. Cengage Learning, (2014).Print.