In early times, the goods were produced for one’s own self or for the use of family members at the most. As time passed on, the business was conducted by means of barter system in which goods of one kind were exchanged for other goods of equal value. When coins came into use, business expanded both in rural and urban areas. With the increase of transport facilities, the import and export of goods developed between the nations. The industrial Revolution of the 18″ century increased the scale of production division of labor, specialization and standardization of goods. Over the years, the size of business has expanded. The use of machines has increased. The working business is being computerized at a very fast speed now. The importance of business can be judged from the various activities connected with it.
Importance of Business
- Mass production of goods
The business of today is making the best possible use of the scarce resources for producing goods on a larger scale. The use of automatic machines, new materials, new processing methods etc. have not only lowered the cost of production of goods but has helped the producers in producing goods in desired quality and quantity.
- Expansion of market
In the modern world, goods are produced by business according to the needs and expectations of the customers. The customers want goods and services of requisite quality, at reasonable price and at right time. The business of today tries to satisfy the customers both within and outside the country by developing and designing the products according to the tastes and purchasing power of the customers Markets, therefore, have expanded consumption of goods due to increase in number of customers all over the world.
- Innovations
The business of today is all the time busy in making improvements by introducing new products, for example, credit cards, digital diary, mobile phones etc. It is also introducing new methods of distribution, for example, e-commerce, tele- shopping It is also using new materials for production of goods such as transistors instead of vacuum tubes, CNG instead of petrol. All these innovations in production bring improvements in the quality of products and reduce costs.
- Fast means of communication and transport
The fast developed means of communication and transport these days are helping the traders in providing goods to the customers at the right time, right place and right price. These aids to trade have helped in the expansion of business.
- Provision of credit by banks
In the modern world, the commercial banks and other specialized credit institutions are providing credit to the agriculturists, traders and manufacturers for producing goods and doing business on large scale.
- Insurance
The various types of business risks which may happen due to fire, theft, flood, earthquake, strikes etc. can be insured and the loss if any arising out of the naks can be recovered. Insurance has given stability to the business now which in the earlier days was not available.
- Employment
Business of today has generated employment both in the rural and urban areas on a bigger scale.
- Business supplies services
Services occupy an important place in modern business life. Though the service organizations do not contribute directly in the production of goods but they facilitate in the production and distribution of goods to the customers. The major services which are growing in importance with each passing year are banking and finance, insurance, medical and health, legal, engineering and other professionals, hotels, domestic servants, education, automobile repairs, etc. All the services which perform simple or difficult tasks for earning money are regarded an important part of business.
- Business has helped in raising standard of living
Business has helped people to earn a living either as owners of business or as employees. The mass production of standardized goods, specialization, automation have increased the incomes of those who are directly or indirectly engaged in business Higher incomes have led to the increase in the standard of living of the people Business also pays a large share of taxes to government.
- Source of revenue
Business of today is providing revenue to the state with which the government maintains law and order undertakes defense and carries on welfare and development activities
- Urbanization
As business is expanding, it is helping in urbanization. The growth of cities has changed the social life of man His vision has been broadened. Education facilities have increased.
Conclusion
There is no doubt that the present day business has increased the comforts of life of people by mass production and distribution of goods. The banking sector, the insurance companies, the fast means of communication and transport are playing a vital role in running and promotion of business. They are contributing a lot to the economic development of nations.
