Business is needed due to the following reasons:
1. To remove poverty:
The economic development of a country depends upon the growth of business. Industry, trade and other business activities generate wealth and add to national income.
A country may have abundant natural resources. But it will remain poor until these resources are utilised productively.
Business enterprises make productive use of national resources so that per capita income of people can increase. Business also makes effective use of technological improvements to create wealth.
2. To generate employment:
The number of persons who seek jobs is rapidly increasing. In a country like India, agricultural sector is already over-burdened and unemployment has become a serious problem.
Business offers employment to millions of people. There is unlimited scope for employment in industry and trade due to the vast range of business activities.
3. To improve standard of living:
Business helps to increase the purchasing power of people. It provides them a wide range of products and services to satisfy human wants. Business firms provide information and education to consumers through advertisements and other means.
People can enjoy new and better products to improve their living standards. Increase in consumption increases demand and production thereby contributing to further progress of the country.
4. To earn foreign exchange:
A country cannot produce everything needed by its people. It has to import certain items for which foreign currency is required. Business helps to earn foreign exchange through exports.
It helps to reduce pressure on the country’s balance of payments and enables a nation to achieve economic independence. A country can obtain supplies of food and other essential products which it does not produce. Similarly, a country can sell its surplus output to other countries.
5. To promote social welfare:
Business can enrich human life and establish a better society. In the course of business activities people belonging to different religions, castes and regions come to one another.
Business dealings between nations provide socially useful, culturally desirable and politically significant movement amongst people. Business enterprises assist the community in public health, education and other socially useful programmes. In this way business contributes to art, culture and peace in society.
Human beings have several wants which go on increasing day by day. In order to satisfy their ever increasing wants, people require various types of goods and services. Business activities are essential for production of these goods and series and for their distribution among ultimate consumers.
Business creates utility for satisfaction of humans wants. It makes proper allocation and utilisation of natural, financial and human resources for the economic growth of the country and for the welfare of society.
It helps nations overcome geographical barriers. It facilitates mutual understanding between people and international cooperation. In fact, modern and civilised life cannot be possible without business.
In the words of wheeler, “business like weather is with us every day. Buying and selling, hiring and firing, producing and financing, these are but a few of the many business activities which daily influence the lives of all of us directly or indirectly.”
The study of business is important to know the position of economic development in a country. The study of business activities helps a person to take better decisions.
One can be better customer, employee and investor if one is familiar with business enterprises and their operations. A formal study of business can enable a person to launch his own business.