Role of Sate in Supporting Business


The government promotes businesses for many reasons that include the creation of employment and the mere fact that businesses pay taxes. The state, therefore, naturally wants to help them start and succeed. The government offers assistance to individual businesses and industries either directly or indirectly. This means by simply contacting your local or state economic development offices you can get the necessary help you require to start or grow a business (McKinney, 2011). This paper examines the ways in which the state has supported business in the country. They include:

  • Economic growth
  • Loans
  • Research and development
  • Improvement of infrastructure
  • Education and Training

Economic growth

The state promotes business in the country by enhancing economic growth. This is achieved by promoting entrepreneurship, creativity, and high competition. These particular strategies aim to reduce unemployment among the youth. Since the 1970s, the government has been looking for ways to increase job growth and the best possible way to do this is through innovation and entrepreneurship. This, in turn, stimulates economic development. The government has put in place programs to start, build, and relocate businesses to specific areas. It is noticeable that the state, county, and local governments are competitors in finding jobs. They compete by offering start-up capital and advice on how to create a “business-friendly” environment. They provide insight on tax credits, interest loans, licensing, permitting, and many other steps in starting and growing a successful business. Government policy has been focusing on small businesses as findings show that small independent firms create more jobs than large organizations (Reinert, 1999).


The government of the U.S. has put up agencies that are focused on helping startups get financing. The agencies like the U.S. small business administration give loan guarantees to small firms. The state also encourages banks to work with entrepreneurs and any other is business they wish to grow. These federal loan programs aim to provide low-interest loans to startups as well as to small businesses that are looking for funds to grow their business. Knowing that there is a way of getting funding, more people are going after their dreams of being self-employed (Garg, 2017). The government plays a big role as they also have agencies that encourage female entrepreneurs by providing start-up capital. Additionally, the government gives help in connecting the firm to suppliers, customers, and other participants in the business ecosystem. This kind of help provided by the state is a guarantee that businesses will thrive.

Research and development

The state of America plays a crucial role in the development of new technologies that benefit the industries. The federal government gives grants to academic institutions in order to fund research in several topics. The government also provides funds that go into making of new products and services by providing incubators (Fairbairn, 2006). This means that a crucial area in the economy will be improved such as transport, agriculture, or communication. Today, science and technology enable industries to find cheaper methods of making products hence increasing their profit margins. This would not have been possible if not because of the extensive research is done. Research also helps with the invention of gadgets that can perform a variety of functions. Therefore, research is an essential part of growth and development. It also helps in identifying the gaps in the economy that can be exploited such as in the area of cybersecurity. The government plays a role in identifying business opportunities.

Improvement of infrastructure

Businesses succeed when they can transport raw materials to the factories efficiently and get the finished product to the market as quickly as possible. The government strives to improve the infrastructure that would otherwise be too expensive for a business to fund. Good infrastructure is very important for a business to succeed.  The state helps by constructing and maintaining good roads, bridges, railways, water supply, and telecommunication systems (Edwinah, 2017). Good infrastructure is essential for productivity in the economy. Different businesses have different requirements in terms of infrastructure but the bottom line is that all businesses need their product to be readily available to clients. The government understands that its economy thrives because of the success of these businesses. They have done an excellent job of ensuring that the infrastructure is well maintained all over the country.

Education and training

The government has played a big role in supporting businesses as it provides free primary and secondary education to children. Other than providing free schooling the government gives grants and loans for higher education. The state is very proactive when it comes to education and training. There are so many institutions in the country that are dedicated to training to ensure that businesses have access to trained labor. Due to rising unemployment and deteriorating economic growth, the government has turned its attention to training the youth on entrepreneurship. This trend came about due to the success of technology entrepreneurs like Jeff Bezos. The government wishes to start technology entrepreneurial centers like Silicon Valley to train young entrepreneurs not only in technology but in all fields. This is a strategy whose goal is to create jobs by using the youths IT skills (Gregory, 2007)that will eventually stimulate economic growth.


It is important for the state to provide a support system for businesses so that their private sector can compete fairly. The government plays a crucial role as the provide incubators, youth entrepreneurship programs, bank programs. The state also facilitates market intelligence to startup companies. It also provides a good network which plays a crucial role in improving the effectiveness of those working in businesses that involve production. Networking contributes greatly to the success of a business in a niche market. It involves a lot of trust and hard work to identify the right networks and to interact with these networks. The government, therefore, tries to make the process easier for new business owners.


Edwinah, A., 2017. Entrepreneurial Attitudes and Survival of Small and Medium Scale Enterprises in Nigeria. Journal of Asia Entrepreneurship and Sustainability, 13(2), pp. 29-61.

Fairbairn, T., 2006. Journal of Small Business & Entrepreneirship. Journal of the Canadian Council for Small Business & Entrepreneirship, 19(4), pp. 349-350.

Garg, A., 2017. Funding to Growing Start-ups. Research Journal of Social Sciences, 10(2), pp. 22-31.

Gregory, S., 2007. Information Technology & People. Enterprise architechtures: enablers of business strategy and IS/IT alignment in government, 20(2), pp. 96-120.

What is the Role of Sate in Supporting Business

McKinney, P., 2011. What should the role of the government be in encouraging small business innovation. [Online] Available at:
[Accessed 9 March 2018].

Reinert, E., 1999. The role of the state in economic growth. Journal of Economic Studies , 26(4/5), pp. 268-326.

Role of Sate in Supporting Business

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