Another aspect of the financial value of addressing innovative opportunities is that it can lead to the creation of jobs. How is this financial value? This not only provides someone with a sustainable personal income, but also has considerable flow on effects. The most significant effect is usually the increased wealth of the national economy. This can have a positive impact on social welfare, education, health and foreign trade. This is because the increase of employment rates means more people are earning money and supporting themselves. Their money is fed back into the economy and society through their spending.
Each of these transactions is subject to some form of taxation, thereby increasing the flow of money to the government in the form of taxes paid. Tax is the government’s primary form of income. They collect tax from individuals through receiving a percentage of the money people spend through the Goods and Services Tax (GST) and through receiving a percentage of people’s salary through income tax. Governments also get tax income from companies through Corporate Taxes which gives them a percentage of the profit from each business. All of these taxes enable governments to create value for their citizens, as they are able to invest this money in crucial areas of public benefit such as health care, infrastructure and education.
ExampleYour contribution to the economy
Let's say it’s five years from now and you have identified and developed an innovative opportunity in the form of new rock-climbing kits that change how people experience the sport. You are running a successful small business, and are seeing consistent sales of kits. By selling these kits, you, the business, and the business’s products are providing the government with money through taxation in three different ways:
- Income tax: a percentage of money from personal wages
- GST: a percentage of money from consumers’ transactions when they purchase kits
- Corporate tax: a percentage of money from the profits of your business
