‘Discuss the relationship between entrepreneurship, innovation and economic development. What role do creativity and problem solving play in this relationship? Refer to both theory and examples from the business world to support your discussion.’
In today's fast-paced competitive environment, one of the most impressing concerns is the condition of economy. Since economies have closely associated with human beings’ living condition, salary, welfares and the trust of government. Especially, recent years are the recovery period of economic crisis. Have no doubt that innovation and entrepreneurship have serious effect on the condition of economic. This paper will present an overview of the relationship between entrepreneurship, innovation and economic development. What’s more, creativity and problem solving also play an important role in the relationship. Firstly, the definition of entrepreneurship and innovation will be stated; then, the relationship between innovation and entrepreneurship will be present; thirdly, how innovation and economic development interrelated with each other will be mentioned; furthermore, the effect of entrepreneurship to economic development will be present; the lastly, the board overview of the triadic relationship. Additionally, how do creativity and problem solving impact the relationship will be mention. The general relationship between entrepreneurship, innovation and economic growth is seemed to have a strong connection and interplayed with each other. At the first step, there will be present the definition of entrepreneurship. According to a famous economist Schumpeter (1943), the entrepreneur is a sociologically distinctive individual who has a speciality to discover precious opportunity and creates a new product, change the course of manufacturing or totally create an innovative marketable to the economy. Moreover, as Hisrich (2011) indicated that, entrepreneurship is a process of creating incremental wealth. This process is risky, mainly because of lacking the methodology. Particularly, high-tech entrepreneurs and innovation are more difficult and riskier. However, Bell Lab and IBM proved high-tech entrepreneurship not high-risk. It needs to be managed. Above all, it needs to be based on purposeful innovation (Drucker, 1985). Then, there will be a brief introduction to innovation. Schumpeter (1950) stated that innovation can be defined as an action that causes to a new production function and the sole domain of the entrepreneur. There are five specific acts that innovation can bring to a new production function. They are introducing new products, introducing a new method of producing, expanding a new market, applying a new type method of organizing and digging a new source of a raw material. Innovation is most simply the application of an idea or concept to the production of goods and services (McDaniel, 2002). In the following context will present the relationship between innovation and entrepreneurship. On account of the definition of innovation and entrepreneurship were mentioned in the last paragraph. It seems innovation and entrepreneurship has a strong connection. Innovation is not only the foundation of the relationships but also the inspiration of entrepreneurship. It is essential that innovation can stimulate the output of an enterprise. Brazeal and Herbert (1999) estimated that the process of entrepreneurial is consisting of technology, psychology and business. In another word, innovation, change and creativity are the main force of the entrepreneurial process. Concern to entrepreneurship aspect, innovation is the specific tool of entrepreneurs, which means exploiting innovation as a chance for different business or service. Entrepreneurs can search purposely for innovation, the changes and apply the opportunity for successful innovation (Drucker, 1985). Innovation is the result of entrepreneurial behaviour, which is the key point (McDaniel, 2002). On the other hand,...
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