One is watching the news or reading the latest article from Forbes, and you see the terms “business” and “economics” used interchangeably; one may wonder about the differences. Business and economics are similar in that they are supplements to each other, both dealing with the process of creating products and services and selling them to generate output. These are fields of study that are closely related and include a range of shared subtopics, such as enterprises, marketing, finance, manufacturing, and banking. Both are social sciences that focus on financial measurement and analysis, focusing on variables that impact the market and also focus on short- and long-term projections, as well as the inner workings of various industries. Finally, both business and economics tend to focus on various problems facing the nation, its citizens, government, and private enterprises (Vaidya). However, there are some differences between economics and business, which are based on their conceptual purpose.
Economics is a study focusing on understanding human behavior and, in turn, how that reflects on the broader economic elements of whole nations. Meanwhile, business is aimed at studying the process of the exchange of goods and money specifically, and all the related elements starting from production to the final sale, and how a specific enterprise fulfills this process. It can be argued that business is a subset of economics, as the human behavior in that exchange of goods is a point of focus (Casson). A major difference is in concepts, economics deals with theories and broad elements of the economy, such as supply and demand, interest rate, and international trade. While these undoubtedly impact business, both individual entities and as a field of study, business focuses on the process of wealth creation within the context of the economy and typically applies practical theories.
Economics focuses on and attempts to maximize the welfare of society, while business is centered on its shareholders. Both face different issues, with economics encompassing poverty, unemployment, taxation, and federal expenditure, while business focuses on product positioning and differentiation, marketing, growth or lack thereof of profitability, and individual or industry performance (Gitman et al.). While business and economics share many commonalities, their conceptual and practical differences make them distinct sciences.
Works Cited
Casson, Mark. The Theory of International Business. Palgrave Macmillan, 2016.
Gitman, Lawrence J., et al. Introduction to Business. OpenStax. 2018. Web.
Vaidya, Dheeraj. “Difference Between Economics and Business.” WallStreetMojo, Web.