How business affects the economy

How business affects the economy: Our economy is built up by many factors, which they help in contributing to the growth of the economy. The mor

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How business affects the economy: Our economy is built up by many factors, which they help in contributing to the growth of the economy. The more organization are found in a community, the higher the rate of employment. 

 With this, the economy will be affected positively.  Most business that is of high value  take a big part in the status of the economy. 

Whereas, business is also affected by some factors that will determine the current state of the wealth of a specific region. An economy can be referred to as the wealth status of a community or particular region, different region have a different state of the economy.

 Let take Nigeria and America for example, the current state of Nigeria is poor and still under development. While for America, its economy is in a good state and can still experience further development. 

Also, this also reflects in their both currency, the US currency has more value than the one for Nigeria. All these are caused by the amount of business, organization and occupation the country or region possesses. 

    In America, we could find different infrastructure, companies, business organization and other productive association. Looking at what Nigeria has, it still under development and fewer companies, infrastructures and business are found there. 

The way business affects the economy are of different ways, it could be through employment, production, provision of goods and services and market exchanges. 

The main reason why business show some impact on the economy

     The actual business reason has been a factor that affects the economy is objected to being that, business is part of the core characteristics of an economy. 

This could be enlightened that it is business ( organization ) that make up an economy which means no business, no economy. They interact with each other and consist of each other, business is the sole feature of the economy. 

     Also for an economy to be recognized, there must be differentiation of region and places. Economy measures the wealth of a particular region. In a place with less business organization, the status of the economy tends to be poor. 

  Things that make business affect the economy 

    Some certain things make the business to affect the economy in different ways, the majority of them are highlighted below 


  • Employment 
  • Productivity 
  • Market share 
  • Importing and exporting 


1. Employment

     The rate of individuals working with does who are not will determine the current state of an economy, employment can only occur if there is the establishment of companies, infrastructure, organisation e.t.c. 

They serve as a home for others to occupy, if the rate of unemployment is higher than employment. Then, the present state of the economy is poor.  

Other individuals can be self-employed or work on the internet, they are the type of employers that do not need physical organisations before they work. 

    The increase of business organisation will directly lead to increased employment, they work jointly together. 

The economy tends to be good if the factor ( employment ) is of high rate. Employment is very important to the economy and helps it to be in its right state.

2. Productivity

     The rate of production of goods and services of an organisation takes part in determining the status of an economy. If a society has abundant productions of goods and services, this increases the value of the society and its economy.

 If the number of infrastructure in a region is high but if the productivity is low then, they are rendered to be useless in the development of the economy. 

High productivity is required for the fast growth and development of the worth of a particular region.

3. Market share

      Some business experience a low share in the market, and have poor recognition in the market. Market share may include the forex market or commodity market, they involve in the part that they particularly fall in to. 

Demand and consumption of a product improve its market share, and make it till stay active and availability in the market.  The economy will have more value if the number or firm located in a particular experiences a high share in the market. 

This only depends on the number of demand and supply of the business output, with the rate of valid consumption by the consumers. 

4. Importing and exporting

      This also includes the demand rate but of a different region, this is done with the aid of transportation. Importing and exporting makes exchange of values and goods to take place, also it is placed inform of trading.

  Goods and services are moved from one region in order to make them fully distributed, and enabling business output readily for consumption.

 Imagine an organization satisfying people from a different region with their service and product, an example of organisations like that is;


  • Google
  • Microsoft 
  • Amazon 
  • Samsung 
  • Facebook e.t.c

     The region where all this organisation listed above are founded, will experience a high rate of development in the economic status. 

This is so because, a large number of consumers from different region consumes their product and services with an exchange of value. 



What determines the status of an economy are of different factors, business contribute both positively and negatively to the growth of the economy.