Nick Zhao of Berkeley Discusses Why Startups Help Fuel the Economy
October 14, 2021
Why Nick Zhao of Berkeley Believes in Startups
Every year, many thousands of new startups develop across the nation. And while many of these will be gone within 1-5 years, Nick Zhao of Berkeley believes that startups help push the economy to higher levels. Without them, the economy would inevitably stagnate, the stock market would crash, investments would fail, and the overall outlook would be pretty grim indeed.
Why is that the case? First, without startups, there would be no net economic growth in the market. How can that be true? Just think of it in this way. Startups bring a burst of new financial interest and many workers who can provide higher interest and production. Second, no matter their growth, current companies already exist and don't produce the kind of rapid increases you get with a startup.
Just as importantly, startups bring new ideas and concepts that help transform the economy. For example, look at two companies that were once considered quirky and unimportant startups: Apple and Microsoft. Both had the idea that personal computers could not only be affordable for the public but transformative for the world in general. And their vision has changed the world in ways Nick Zhao of Berkeley believes are apparent.
Startups also help fuel the stock market in many surprising ways. For example, new and promising startups always get the market buzzing, and investment may become hot and heavy, depending on the situation. Just take a look at the recent boom in the biomedical field. Once a somewhat neglected market share, the COVID-19 pandemic caused heavy investment in many startups, turning many into millionaires overnight.
This type of heavy investing is one reason why the stock market has risen to such record levels at points throughout the last few years. However, without this kind of fresh blood in the field, the stock market often stagnates and becomes less impressive. Thankfully, Nick Zhao of Berkeley believes that startups help minimize this risk and helps keep crashes from becoming less of a severe issue.
Lastly, startups also help entrepreneurs push for new market trends that keep the economy growing and ever-changing. Entrepreneurs almost always look for the latest and hot business model and find investors who can help these areas expand. Unfortunately, new and established businesses rarely get that kind of interest. However, startups help fuel these changes and make the economy stronger and more efficient.