relationship between entrepreneurship, innovation and economic development

Topics: Economic growth, Economic development, Innovation Pages: 7 (1943 words) Published: November 27, 2013
“Discuss the relationship between entrepreneurship, innovation and economic development. What role does sustainability play in this relationship? Refer to both theory and examples from the business world to support your discussion.”

Introduction
In today’s business world, the increasing focus on entrepreneurship education, innovation, economic development and sustainability are issues interrelated to business success. Although an optimal balance between these relationships is hard to attain, the cooperation among nations is undeniably crucial to preach the importance of a balance between economic development and the environment, and raise people’s awareness of our future world. The following analysis will first start with clear definitions on entrepreneurship and innovation, and the Apple Company, which is well known as the most innovative company, will be used to demonstrate the relationships between them. Then move on to define economic development and analyze its relationship with innovation by citing interpretation on developing and developed countries, and then followed by the importance of sustainability, and finally ended with a conclusion.

Definition of Entrepreneurship
Okpara, F. (2007) explained that “Entrepreneurship denotes the whole process where the entrepreneur becomes aware of the opportunities that exist to empower themselves, take the risk, develop ideas, and take personal responsibility and initiative.” Therefore, in short, entrepreneurship is the process concerning being innovative and detecting opportunities, which an agile entrepreneur is focusing on in managing the business.

Definition of Innovation
While creativity is the core of the entrepreneurship, innovation refers to the ability to carry out and realize those creative ideas. It can basically be divided into incremental innovation and radical innovation, where the former one is an improvement based on existing knowledge, whilst the latter one refers to creative destruction, creating a dramatic change in transforming the existing market into a new industry. A leader in the development of management education believed that “In business, innovation rarely springs from a flash of inspiration. It arises from a cold-eyed analysis of seven kinds of opportunities”. (Peter, D.2002, p.95) , and his support in incremental innovation is opposite to Schumpeter’s contention in radical innovation, believing that new combinations generally do not evolve from the old ones but in a sudden sense, with a complete change (Schumpeter, J., 1983). The choice of innovation, however, varies under different situation, and no definite answer has concluded.

Relationship between entrepreneurship and innovation
Apple could be said to be the most innovative company in these years, and its achievement is greatly credited to success in its entrepreneurship. So in the following, Apple Company will be used to help illustrate the relationship between entrepreneurship, innovation more concretely. Steve Jobs is the entrepreneur of the Apple Company, and he had always been the core of the whole business. Because of Steve Jobs, Apple changed the way where computers were only for professionals, and through various evolutions, computers have now become portable, concise but powerful for everyone. Despite the initial curiosity in inventing Apple I, Apple II, and Ipad, Macbook recently, Steve Jobs had always been an entrepreneur who is an agent of change, as he focused much on creativity and innovation, and it can be seen by the advertising slogan of Apple,” think different”. Thinking too differently may sounds like a fantasy, such as when Steve Jobs was introducing his idea about MacWorld. His competitors in cellphone industry laughed at him, teasing him that without a keyboard, the cellphone would not be a good email machine and no business customer will appeal to it. However, smartphone then turned out to be a great breakthrough and success in not only the cell phone...
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