Why Is Entrepreneurship Important? Impact of Entrepreneurs

Entrepreneurship is a critical feature of the US economy, and the data says it’s becoming increasingly popular. 

Between November 2025 and January 2026, more people filed new business applications than any three-month in the last 22 years (when the US Census Bureau began tracking this data point). 

It’s easy to understand why. Entrepreneurship offers a compelling alternative to a traditional 9-to-5 job, with higher perceived financial security and a flexible schedule.

Ahead, learn about why exactly entrepreneurship is important for the economy and why individuals continue to choose this path. 

What is entrepreneurship?

An entrepreneur is a person who starts and runs their own business. The term is sometimes used as a catch-all to encompass all people who work for themselves, including solopreneurs, freelancers, and small business owners. 

But entrepreneurship is most often associated with launching ventures with higher risk and potential reward, like companies that sell innovative new products.

In the United States, the vast majority of entrepreneurial ventures are small businesses: 99.9% of the US’s 36.2 million businesses have 500 or less employees, according to the US Small Business Administration (SBA). 

Most of these businesses have no employees at all. As of the most recent US Census Bureau data (2023), 78.4% of all US businesses had no paid workers. 

Reasons why entrepreneurship is important

• Economic growth and community impact
• Self-determination
• Job creation
• Innovation
• Competition
• Sense of accomplishment

On both a macro and micro scale, entrepreneurs can have a huge impact on their local communities and the wider society. They are of great importance for:

Economic and community impact

Small businesses have a significant impact on the nation’s economy. Economic research by the SBA shows that small businesses account for 43.5% of total US gross domestic product (GDP) and pay 38.7% of all private-sector wages.

The macro impact of small businesses, then, is clear. But in some ways, the real story is even more apparent when you look on a micro, individual scale. Within their communities, entrepreneurs can create a positive ripple effect on neighbors, clients, suppliers, and even the environment.

For example, when Brian Linton founded Philadelphia-based apparel company United By Blue, he was passionate about finding a way to use his new business venture to help clean up the world’s water. For every product purchased, United By Blue removes one pound of trash from oceans and waterways. 

The initiative began with local rivers and now has organized cleanups across the United States and in other countries including Bali and the Philippines. United by Blue has removed more than 5.6 million pounds of trash and brought local communities together.

United By Blue also reduces waste through its proprietary material BisonShield, an insulating yarn made from bison wool. Bison wool was previously treated as a waste material, but United By Blue created a supply chain to save it from landfills.

Self-determination

Entrepreneurship puts the individual in control of their professional fate—and their financial future.

A recent Shopify survey of entrepreneurs in the US, Canada, the UK, Australia, and Spain found that business owners were more likely to say that entrepreneurship feels more financially secure than a traditional job—by a margin of two to one. Fewer than 30% of respondents said that traditional paychecks felt more secure. Working for yourself is one way to create a future-proof job.

On one hand, these statistics point to an unstable job market, in which hiring in advanced economies is down 20% to 30% from prepandemic levels. 

On the other hand—as entrepreneurs will tell you—entrepreneurship is often more of a pull toward something, rather than a push away. The Shopify data found that across all five markets, a clear majority of founders—between 61% and 69%—said starting a business felt like moving toward something they wanted, not away from something unstable.

Job creation

Entrepreneurship creates jobs for others, too. The SBA reports that small businesses comprise 99.7% of US companies with paid employees, and many workers depend on these new job opportunities: Small businesses employ 62.3 million people, or 45.9% of the workforce.

In fact, small businesses accounted for more than 61% of net-new jobs between January 1995 and December 2024, according to recent SBA data. 

For many entrepreneurs, job creation is one of the goals and a source of deep pride. Cofounder and CEO of tinned seafood company Fishwife, Becca Millstein, says this positive impact is one of her favorite aspects of entrepreneurship.

“I’m so grateful to be responsible for employing people and hopefully providing an impactful, wonderful work experience for them,” Becca says. “It’s a true privilege.”

Fishwife has also played a direct role in job creation at other companies. Several fisheries and canneries in the Pacific Northwest thrived thanks to their contracts with Fishwife. 

“For some of them, Fishwife is a huge percentage of their business,” Becca adds. “They can hire more people and grow their own companies, which feels awesome.”

Innovation

Some people become entrepreneurs and start businesses because they have ideas for improving an existing product. Others launch companies because they invent a product that doesn’t yet exist. Both are examples of innovation.

Selling innovative, niche products can be a winning strategy. As of 2026, product categories outside the top 100 account for nearly 55% of all sales on Shopify, and they’re growing faster than mainstream product sales.

Take Nerdwax, a company that’s passionate about eyewear, even though it doesn’t actually sell glasses. Instead, its product line focuses on specialized accessories to make wearing glasses more enjoyable: the signature Nerdwax beeswax stick that stops glasses from sliding down one’s nose, drops that keep lenses from fogging up, and a highly effective lens-cleaning solution.

Founder and CEO Don Hejny said on Shopify Masters that he developed the idea for Nerdwax’s flagship anti-slip stick while on the road as an audio engineer for musicians. A woman onstage kept trying to push her aviator sunglasses up while simultaneously playing acoustic guitar.

“I thought, ‘There needs to be a solution for this that somebody who’s on stage could wear—and they wouldn’t be ashamed to wear,’” Don says. “I grew up around board sports. Surfers use wax in the water to keep friction on their surfboards. I thought, ‘Man, if I could make something like a surf wax for your glasses, that would be really cool.’”

Competition 

Entrepreneurs have the power to disrupt industries and shock existing businesses out of complacency. That market competition results in more choice for consumers and can lower prices.

Successful entrepreneurs can upend a market with a better version of an existing product. They might also provide a more efficient new business model or a lower price point.

One entrepreneur example of improvement: Enrico Casati and Jacopo Sebastio founded Velasca in 2013 to bring handcrafted Italian leather shoes to direct-to-consumers (DTC) ecommerce. 

“We wanted to connect these craftsmen in Italy that are really good at making products with people who love Italian design and quality around the world,” Enrico says on Shopify Masters.

The traditional business model for Italian leather shoes worked because customers were willing to pay premium prices for these artisanal goods. Those high prices were largely because of the industry’s reliance on intermediaries such as distributors, agents, resellers, and retailers. Velasca’s cofounders’ competitive analysis recognized an opportunity. 

“We bet our company on being direct-to-consumer, which brings about a competitive advantage in terms of pricing,” Enrico says. “You make the same products from the same factories using the same materials as the famous brands. But you’re able to sell them at half the price of comparable products.” 

Sense of accomplishment

Entrepreneurs feel good about the work they’ve done.

Up to 95% of founders say building their own business is one of their proudest accomplishments, according to Shopify data. The vast majority (between 78% and 90% depending on the country) say they’d do it again.

Rosie Johnston, founder of perfume brand By Rosie Jane, says setting your own schedule is just one perk. “I really love what I do. I love building my brand. I love interacting with our community,” Rosie says on Shopify Masters. 

Starting and running your own successful business requires hard work, but Shopify data shows that most entrepreneurs feel like running their own business requires less effort than a traditional job. For aspiring entrepreneurs, the trick is sticking with it. 

“I always think that entrepreneurs are born not made, because it’s just got to be in you that—a pit bull mentality. You just have innate tenacity,” says Rosie. “Don’t let go.”