As today’s economy becomes increasingly globalized, many small businesses in the US are increasing their employment of workers located abroad, such as in the services and manufacturing industries, and that trend has led to more individuals in developing countries acquiring the capital to, in turn, start their own businesses.
Startups can benefit local communities, the wider economy and larger businesses, and therefore play a vital role in a country’s economy, and which is likely to grow in importance over the coming years.
While major corporations employ large numbers of people, there are also a significant amount of individuals who are employed by smaller startups, and which can offer competitive pay and provide quality employment opportunities in a number of sectors, and which can make them more attractive than working for a larger company.
And although large corporations and small startups are often viewed as competitors, this is not always the case. Startups’ competitive salaries result in increased purchasing power, allowing their employees to consume products and services produced by large corporations, widening their consumer base and helping them stay in business.
At the same time, startups and corporations do not always share the same consumer base, and are therefore not in direct competition. Many startups sell their products or services to corporations, and rely on those corporations for a variety of services and products.
Starting a business is arguably easier than it ever has been. Technology, such as software, websites and applications that can be used to facilitate the launching and running of a small business have dropped in price, while harnessing social media for marketing purposes, and to build brand awareness and rapport with customers, has also been a factor in the increasing number of startups appearing.
Technology startups in Latin America are the target of a US$5 billion fund announced earlier this year by Japanese multinational Softbank, while Scotiabank recently picked out 10 fintech startups in the region to include in its accelerator program.
Many major corporations are highly bureaucratic in their structure, and which can affect their ability to provide good employment opportunities to employees, while smaller businesses offer a more personable, accessible option. This also applies to customer relations, which can be more personal and of longer duration. Exceptional customer service can become a a startup’s strength, and which in turn could pressure larger companies into prioritizing customer satisfaction, an example of how startups can lead the way in enacting change that benefits the end customer.
Small businesses also have a tendency to innovate, introducing new technology and ways of doing business and engaging with customers that can spur economic growth and benefit the community, particularly in large cities, and the impact of startups on the economy and local communities will remain vital in the years to come.