[Market Economy Guide] Businesses Are the Flower of the Market Economy

Companies create jobs and make major contributions to technological innovation and cultural development

Coolidge, former U.S. president: “Civilization and the profits of business go hand in hand”

Businesses are often called the flower of the economy. And for good reason: businesses are the entities that produce and supply the goods and services essential to our lives. They are also the foundation for creating jobs, the source of household income, and as the main drivers of imports and exports, they increase a nation’s wealth. In addition, businesses have a profound impact on technological innovation, regional development, and cultural progress. That is why former U.S. President Calvin Coolidge said, “Civilization and the profits of business go hand in hand.”

What if there were no businesses? I can say with certainty that the benefits and conveniences of civilization we enjoy today would never have been possible. That is because businesses commercialized innovative core technologies, leading both economic growth and the advancement of civilization at the same time.

Scientists and Entrepreneurs

Although the United States was several decades behind Europe, it produced countless entrepreneurs and fully reaped the fruits of the Industrial Revolution. Thomas Edison, for example, was not only a genius inventor but also a shrewd businessman. He did not leave his many inventions as mere “successful experiments,” but transformed them into profitable products. He founded Edison General Electric, an electric lighting company, and demonstrated his business acumen as not just an inventor but an entrepreneur, earning a great deal of money. Edison General Electric is the predecessor of today’s global giant, General Electric.

If core technology is the domain of scientists, then it is businesses that use that technology to industrialize it. In this sense, without businesses, core technology would remain only in the realm of science. As history has proven, it was only because businesses existed that core technology could expand from the realm of science into the realm of the economy. And the result was not only an increase in national wealth through economic growth, but also a qualitative improvement in our standard of living.

The French company Evian is a world-famous bottled water brand. Evian was the first company in the world to successfully commercialize water, having recognized that the glacial water of the Evian region of France contains abundant minerals beneficial to health. Buying bottled water may seem natural today, but when Evian first began selling it, it was the late 19th century. At the time, the idea of drawing naturally flowing glacial water, bottling it, and selling it was more than innovative—it was shocking. For all I know, many people at the time probably predicted Evian would not survive. And understandably so: it was an era when no one imagined paying money to drink bottled water.

But in the end, Evian survived. More than that, it has firmly established itself as the world’s No. 1 bottled water brand and boasts enormous annual sales. Not only its drinking water, but also its facial mist made from glacial water from the Evian region has become a hit product.

Evian, the Company That Sold Water

How was Evian able to achieve global success with a single item that exists naturally—water? The reason is that Evian was a company that combined the creative idea of “selling bottled water” with the logic of commerce. Evian is well known for keeping the production process—drawing glacial water from melting Alpine snow and bottling it—clean and safe. This was possible because Evian is a large company equipped with a rigorous hygiene management system and advanced manufacturing technology. In addition, Evian succeeded in establishing the brand value of “water you can trust and buy to drink” by instilling in consumers the perception that its glacial water is not just water, but mineral-rich “medicinal water.” It was the result of a corporate-level marketing strategy that worked perfectly.

Evian’s success goes beyond simply increasing one company’s profits; it also leads to an increase in France’s national wealth. Consider this: thanks to Evian’s rise as a global bottled water company, France has been able to earn substantial foreign currency as a major exporter of water. In this way, the foreign currency earned by a global corporation is ultimately converted into national wealth, contributing to a more prosperous life for the people of that country.

◆ Please remember

Buying bottled water may seem natural today, but when Evian first began selling it, it was the late 19th century. The idea of drawing naturally flowing glacial water, bottling it, and selling it was shocking.

Sung-no Choi, President of the Center for Free Enterprise (CFE)

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Original title: [시장경제 길라잡이] 기업은 시장경제의 꽃

Author: Sung-no Choi

Date: 2019-08-05

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=13&idx=20413