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How Small Businesses Affect a Nation’s Economy

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Gone are the days when small business owners were individuals lacking formal education or corporate skills. Due to the advent of the Internet and social media, social status or level of education are no longer the defining criteria for achieving success in entrepreneurship.


Because of that, small businesses have become a really important part of national economies in recent times. This trend is now observable in a number of developed and developing countries. SBEs (small business enterprises) contribute to half of the total GDP in such developed countries as Japan and the USA. This gives one a pretty good idea of how essential SBEs are to the continual growth of any economy. However, in some countries, small businesses are oftentimes underrepresented, and it's high time that changed.

To better understand the role SBEs play, we should first consider some basic economic concepts.

What is a Small Business Enterprise (SBE)?

There isn't a universally accepted definition of small business enterprises. In the United States, SBEs are referred to as commercial entities that employ a staff of 500 and have little influence on the market segment they operate in. In their turn, Europeans define them as having fewer than 250 people.

What is an economy?

An economy can be defined as a system of buying, selling, and producing goods and services. The most basic component of any economy is the distribution of money, or putting it simply, buying and selling. There are many interdependent factors that influence economic growth or decline of a nation, such as labor, law, infrastructure, natural resources, human capital, and technology. For the purpose of this article, we will focus on small business enterprises and their influence on a national economy. There are numerous ways in which SME ensure collective growth of an economy but we'll focus on these four:

  • It serves as a source of employment.
  • It helps reduce poverty.
  • It alleviates tax burden on small business owners.
  • It reduces crime.

Employment

Due to the abundance of information on social media, it has become relatively easy for literally anyone today to start a small business. All it takes is having some start-up capital and Internet access. However, small business owners need to employ people to ensure their company's growth. Because of the small initial costs involved, people are constantly looking for ways to launch their own SBEs. Examples of such small enterprises include companies hiring custom writers for people who can buy cheap essay, Wieners Circle, Death wish Coffee, etc.

One form of trading that has become very instrumental in facilitating the creation of small businesses is e-commerce (online shopping). E-commerce makes it possible to start a profitable business with no infrastructure at all, and that means little start-up costs. Small business enterprises serve as an excellent alternative source of employment, especially when it comes to jobs that don't require graduate level education. And this, in turn, translates to increased economic growth and development.

Poverty

Poverty is undeniably one of the main reasons for economic stagnation. Poverty and unemployment go hand in hand, which means that the former can be eradicated by providing more job opportunities. And the best way to do that is to encourage the creation of SBEs at the community level. Given the low start-up costs involved, it's safe to say that an economy that invests in SBEs is sure to experience exponential growth within the shortest possible time.

Crime Drop

A spike in crime rate is undeniably another anti-economic growth indicator. That's because it imposes a huge economic burden on the affected communities and taxpayers. And the worst thing is that investors make it a rule to avoid crime-ridden areas.

So what can be done to improve a country's economy if it is filled with crime-ridden communities? To tackle a problem of this magnitude, we've got to first understand its underlying cause, which is joblessness. In fact, it doesn't take a rocket scientist to figure that out. If that's the case, then creating SBEs seems to be the logical thing to do. In other words, by creating jobs in these communities, you provide people with an opportunity to make an honest living and give a boost to your economy.

Taxes

Tax payment is one of the major channels through which governments get revenue. As of 2010, small businesses accounted for 50% of the total GDP (Gross Domestic Product) in the United States, one of the strongest economies on the planet. This means that half of the foundation of one of the world's biggest economy is based on the input of SBEs. And as we all know, the ratio of tax revenue to GDP is directly proportional. In other words, tax revenue increases as GDP increases. So, not only do small businesses affect GDP but they also directly affect tax revenue. Given that, a rapid decline in output of SBEs will automatically cause a rapid decline in economic growth.

Because of the small start-up costs involved, SMEs are relatively easy to create and run. That is exactly the reason why more and more of them are started on a regular basis in developed and developing countries. This fact alone underscores the grave importance of small businesses. Their growing number means more employment opportunities which, in turn, translates to increased tax revenue and GDP.

Now that you know the role small businesses play in a nation's economy, it should be pretty clear to you that they ensure global financial stability. And this further reinforces the belief that we all have significant roles to play in nation building, no matter how small they may be.

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Health

How This CEO Is Using Your Period To Prevent Chronic Diseases

With so many groundbreaking medical advances being revealed to the world every single day, you would imagine there would be some advancement on the plethora of many female-prevalent diseases (think female cancers, Alzheimer's, depression, heart conditions etc.) that women are fighting every single day.


For Anna Villarreal and her team, there frankly wasn't enough being done. In turn, she developed a method that diagnoses these diseases earlier than traditional methods, using a pretty untraditional method in itself: through your menstrual blood.

Getting from point A to point B wasn't so easy though. Villarreal was battling a disease herself and through that experience. “I wondered if there was a way to test menstrual blood for female specific diseases," she says. "Perhaps my situation could have been prevented or at least better managed. This led me to begin researching menstrual blood as a diagnostic source. For reasons the scientific and medical community do not fully understand, certain diseases impact women differently than men. The research shows that clinical trials have a disproportionate focus on male research subjects despite clear evidence that many diseases impact more women than men."

There's also no denying that gap in women's healthcare in clinical research involving female subjects - which is exactly what inspired Villarreal to launch her company, LifeStory Health. She says that, “with my personal experience everything was brought full circle."

“There is a challenge and a need in the medical community for more sex-specific research. I believe the omission of females as research subjects is putting women's health at risk and we need to fuel a conversation that will improve women's healthcare.,"

-Anna Villarreal

Her brand new biotech company is committed to changing the women's healthcare market through technology, innovation and vocalization and through extensive research and testing. She is working to develop the first ever, non-invasive, menstrual blood diagnostic and has partnered with a top Boston-area University on research and has won awards from The International Society for Pharmaceutical Engineering and Northeastern University's RISE.

How does it work exactly? Proteins are discovered in menstrual blood that can quickly and easily detect, manage and track diseases in women, resulting in diseases that can be earlier detected, treated and even prevented in the first place. The menstrual blood is easy to collect and since it's a relatively unexplored diagnostic it's honestly a really revolutionary concept, too.

So far, the reactions of this innovative research has been nothing but excitement. “The reactions have been incredibly positive." she shares with SWAAY. “Currently, menstrual blood is discarded as bio waste, but it could carry the potential for new breakthroughs in diagnosis. When I educate women on the lack of female subjects used in research and clinical trials, they are surprised and very excited at the prospect that LifeStory Health may provide a solution and the key to early detection."

To give a doctor's input, and a little bit more of an explanation as to why this really works, Dr. Pat Salber, MD, and Founder of The Doctor Weighs In comments: “researchers have been studying stem cells derived from menstrual blood for more than a decade. Stem cells are cells that have the capability of differentiating into different types of tissues. There are two major types of stem cells, embryonic and adult. Adult stem cells have a more limited differentiation potential, but avoid the ethical issues that have surrounded research with embryonic stem cells. Stem cells from menstrual blood are adult stem cells."

These stem cells are so important when it comes to new findings. “Stem cells serve as the backbone of research in the field of regenerative medicine – the focus which is to grow tissues, such as skin, to repair burn and other types of serious skin wounds.

A certain type of stem cell, known as mesenchymal stem cells (MenSCs) derived from menstrual blood has been found to both grow well in the lab and have the capability to differentiate in various cell types, including skin. In addition to being used to grow tissues, their properties can be studied that will elucidate many different aspects of cell function," Dr. Salber explains.

To show the outpour of support for her efforts and this major girl power research, Villarreal remarks, “women are volunteering their samples happily report the arrival of their periods by giving samples to our lab announcing “de-identified sample number XXX arrived today!" It's a far cry from the stereotype of when “it's that time of the month."

How are these collections being done? “Although it might sound odd to collect menstrual blood, plastic cups have been developed to use in the collection process. This is similar to menstrual products, called menstrual cups, that have been on the market for many years," Dr. Salber says.

Equally shocking and innovative, this might be something that becomes more common practice in the future. And according to Dr. Salber, women may be able to not only use the menstrual blood for early detection, but be able to store the stem cells from it to help treat future diseases. “Companies are working to commercialize the use of menstrual blood stem cells. One company, for example, is offering a patented service to store menstrual blood stem cells for use in tissue generation if the need arises."