Google ranks websites based on a highly complicated algorithm. One crucial component of this algorithm is trust signals — that is, links. For some businesses, gaining these links automatically is very difficult. Sometimes, it takes a manual request for a link, or a piece of content with a link in it, to get those trust signals. The process of creating those links is what we call link building.
To put it simply, the more links you earn from relevant, high authority websites, the better it will rank. Links are just a piece of the puzzle, but they are undoubtedly an important one.