Final answer:
Small businesses are essential because they contribute to economic diversity, innovation, and provide personalized services. Their existence can be attributed to personal fulfillment, community identity, autonomy, flexibility, and the desire to meet specialized local needs. They make up a significant portion of employment and support economic resilience.
Step-by-step explanation:
Small businesses are a vital part of society because they provide personalized services and contribute significantly to economic diversity and innovation. These businesses sometimes exist without earning economic profits due to various reasons, such as the value of self-employment, the role in community identity, and their ability to offer specialized services that larger firms may not. Mom and Pop stores, despite not earning substantial economic profits, add value to local economies and meet specific community needs.
In Canada and elsewhere, a trend of individuals choosing to start or work for small businesses rather than for larger employers can be partly explained by the desire for autonomy, flexibility, and the personal satisfaction that comes from running one's own business. Furthermore, the economic structure is such that close to half of workers in private firms work at large companies, while another 35% work in firms with fewer than 100 employees, indicating a significant presence of small-scale businesses in the overall market.
Areas like agriculture and services encourage small business development and entrepreneurship through mechanisms like microcredit, which unlocks potential for individuals to create income using their skills. This alternative to traditional employment allows for a more diverse and resilient economy, benefiting society as a whole.