The obvious answer is businesses create products and services that people purchase, which creates jobs. Jobs are the source of income for workers who, in turn, spend their wages on products and services, creating more jobs and income for others. But, that is not the entire story of why business is vital to the national economy!
Businesses generate billions of dollars in taxes, corporate and individual, paid to support the government's services. In 2019, according to the Internal Revenue Service, individuals paid $1.718 trillion in personal income taxes. The IRS collected $1.243 trillion from payroll taxes, which includes Social Security and Medicare taxes. Corporations paid another $230 billion in corporate taxes. These taxes are paid to the federal government. They don't include additional revenues state and local governments collect from employees and business. Without business, federal, state, and local governments would be severely limited in their revenue.
Businesses also contribute to their local community's charity and not-for-profit organizations to continue to serve the needs of people. In 2019, individuals donated $292 billion, and estimates are that corporations gave $428 billion to charities in 2019. A visit to any college campus demonstrates business giving's economic power, from scholarships to research and building of modern facilities. Charitable giving helps the economy by serving people in need without relying on the government to collect more taxes from individuals.
Businesses operate globally. This means they contribute to the nation's economy by connecting with other companies in the global economy. Global economies lead to establishing relationships with foreign countries. The relationships companies establish internationally foster cooperation and understanding, which helps to underwrite world peace. A stable world economy depends on cooperation and global trade relations.
Finally, a less tangible but equally important aspect of the contribution of business is to people's psychological welfare. Companies provide jobs, taxes, and contributing to the economy by generating income and wealth. Businesses are often community hubs where people socialize and meet. Think of your local coffee shop or favorite restaurant. These are places you go to commune with friends and to socialize. Every economist recognizes the value of positive social interaction in the economy.