The difference between economics and business

/in /by

So, you’re interested in money, the making of money and how it works. Economics and business are two fields that will likely appeal to you, but perhaps you aren’t sure about the difference between an economics degree and a business degree.

In weighing up an economics degree versus a business administration degree, it is best to think of what appeals to you the most. While they are certainly related, they are not quite the same. In this article, we will go into more detail on the difference between economics and business. We’ll also break down both the pros and cons of economics as well as the pros and cons of business administration to help you make a better-informed choice.

People often ask if an economics degree is a business degree. Economics and business are related in that they both fall under the greater field of commerce, but they are still separate fields. Within common usage and language, the words commerce and business are often interchanged quite freely. Going by that logic, many people may assume that this means an economics degree is therefore a business degree, especially if it was done as part of a Bachelor of Commerce degree. This is not, however, strictly correct. They are each a distinct field.

At an undergraduate level, both are options when studying for a Bachelor of Commerce degree and it is sometimes even possible to major in both at the same time. Unlike business administration though, economics can also be studied as part of a Bachelor of Arts degree and combined with other social sciences such as communications and psychology. Some South African universities also offer specialised Bachelor of Business Science degrees for business while others offer Bachelor of Economics or Bachelor of Economic Sciences degrees.

Is a business degree better than an economics degree?

In deciding what to study further, you may ask yourself, is a business degree better than an economics degree? Well, it depends on what you want to do with your degree. This article can’t tell you whether an economics degree is better than a business degree. Instead, we will look at the differences between business and economics so that you can decide which is the better degree for you.

What it mostly comes down to is which career path appeals the most to you. Are you are looking to one day run a business or if you are more interested in studying how businesses interact with each other as part of the greater economy?

You may also have asked yourself, “is economics harder than business?”. This is also a tricky question to answer and again it largely depends on the student. Some do struggle with the high level of maths required when studying economics. As a highly analytical subject, there is, unfortunately, no way of getting around this. If you are not confident in your mathematical skills, and would rather not spend your days doing algebra, calculus and differential equations, then business will probably be an easier degree for you to complete.

Conversely, if you are very comfortable with numbers, research and statistical modelling but find yourself less interested in things like dealing with people, managing teams and marketing to clients, then economics may be better suited to you than a business degree.

Either way, both degrees offer you a potential route to the very top of global business and economics. Graduates of either might one day find themselves attending the World Economic Forum’s annual event in Davos, where state leaders, top businesses and academics gather to discuss issues of global economic concern. Of those attending, the vast majority of attendants are from business (though this will also include economists in their number), with a small contingent of academics.

Economics vs business administration

Both economics and business administration share a lot of common ground, but they are quite different in their ultimate aims, applications and the career choices available.

A business degree will equip you with the skills to run a business optimally or to start up your own business with the best possible chance of success. A business degree will teach you things such as management, accounting, finance, business ethics, organisational behaviour and leadership skills. It will likely also include economics in some form or another. For example, if you were to study the University of the Witwatersrand (Wits) online Postgraduate Diploma in Business Administration, there is a module on international business and economics.

An economics degree is both broader and far more analytical. As a true social science, it combines societal elements such as psychology with hard science and statistical mathematics to analyse and interpret data, drawing conclusions to forecast likely outcomes.

Economics vs business economics

Although not a commonly known or recognised subject in South Africa, it is worth making mention of the specialised field of business economics. This is an area of applied economics that combines economic theory and analysis with business management. The term itself is still quite ambiguous and there’s little formal recognition of it as it’s own standalone field here in South Africa or in the UK. However, there are associations dedicated to the business economics field in the US, Canada and Australia.

If this particular combination appeals to you, you are still able to achieve the same result locally by studying a Bachelor of Commerce degree with economics and business management as your two chosen majors.

Business administration pros and cons

Here are some of the pros and cons of a career in business administration. It can be very rewarding both financially and in terms of work satisfaction, but it also requires more dedication and time commitment than some people may be comfortable with.

Pros of business administration

Cons of business administration

  • Higher-level positions can require a master’s degree
  • Higher positions can require many years of work experience
  • Long hours and ongoing responsibility
  • Tough competition for leadership positions

 

Economics pros and cons

Here are some of the pros and cons of a career in economics. As you can see, while there are some similarities with business administration, an economics degree will likely set you on a different career path to a business degree.

Pros of economics:

  • Above-average wages
  • Opportunities in many fields
  • Advancement opportunities available through work experience
  • Multiple potential employers
  • Potential for great impact on society

Cons of economics:

  • Lack of certainty and reliance on educated guesswork
  • The frustration of ignored warnings
  • Risk to reputation and career if forecasts are wrong

In weighing up the pros and cons of economics, there are also some fairly neutral elements to consider. Depending on your personality, these could either be a pro or a con. If you feel that using mathematics and statistics daily is a con rather than a pro, then you may be looking at the wrong field with economics. So too, if you feel that analysis and modelling are too theoretical and you prefer a more practical hands-on approach, then business administration may be a better fit.

Summing up the comparison of economics and business administration

Now that you have a better idea of the differences between economics and business and have compared an economics degree with a business degree, you should have a better feel for what is best suited to you.

If you feel you lean more towards business, then please have a look at the University of the Witwatersrand’s online Postgraduate Diploma in Business Administration. After checking the course fees and ensuring you meet the admission requirements, you can apply now and start your studies within the next two months.