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.
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.
Entrepreneurship, innovation and economic development are linked to one another through different factors and characteristics of each other. Entrepreneurship “is the result of what entrepreneurs do and refers to events and their economic impact” (Lumsdaine E, Binks M 2007 P11). This definition demonstrates that entrepreneurship is an outcome of an act of a person who has a particular quality. This act may be taking initiative and creating a business idea from an opportunity that has been seen. It is also created from changes of supply and demand of consumer needs and this is where entrepreneurs are different to other people, as they would see this change in demand and supply consumers with the service or product that is wanted.
Innovation “is more than an invention – it involves change and it ultimately results in a useful product or process that is commercialised and widely disseminated” (Lumsdaine E, Binks M 2007 P179). This means that a product is not only invented, it is distributed in to the economy and used by the majority of the target market. The difference between an invention and innovation is that an invention is a product that has been produced by some who has a creative trait but the product may not necessarily be used by the intended target market, while innovation is taking the invention through the process of being sold to the intended target market and being used on a timely basis. An example of an invention is an eight wheeler electric car. The creativity of the idea is there, but it was not commercialised and distributed, therefore it was not innovated. Whereas an item like the Apple iPhone was invented and was commercialised and distributed and is now one of the most popular smart phones.
Economic
Entrepreneurship, innovation and economic development are linked to one another through different factors and characteristics of each other. Entrepreneurship “is the result of what entrepreneurs do and refers to events and their economic impact” (Lumsdaine E, Binks M 2007 P11). This definition demonstrates that entrepreneurship is an outcome of an act of a person who has a particular quality. This act may be taking initiative and creating a business idea from an opportunity that has been seen. It is also created from changes of supply and demand of consumer needs and this is where entrepreneurs are different to other people, as they would see this change in demand and supply consumers with the service or product that is wanted.
Innovation “is more than an invention – it involves change and it ultimately results in a useful product or process that is commercialised and widely disseminated” (Lumsdaine E, Binks M 2007 P179). This means that a product is not only invented, it is distributed in to the economy and used by the majority of the target market. The difference between an invention and innovation is that an invention is a product that has been produced by some who has a creative trait but the product may not necessarily be used by the intended target market, while innovation is taking the invention through the process of being sold to the intended target market and being used on a timely basis. An example of an invention is an eight wheeler electric car. The creativity of the idea is there, but it was not commercialised and distributed, therefore it was not innovated. Whereas an item like the Apple iPhone was invented and was commercialised and distributed and is now one of the most popular smart phones.
Economic
References: Business Dictionary, (unknown)”Definition” Business Dictionary. Downloaded from http://www.businessdictionary.com/definition/economic-development.html as at 15th November 2010. Ebay (2010) “Company Overview” The Company. Downloaded from http://pages.ebay.co.uk/aboutebay/thecompany/companyoverview.html as at 16th November 2010. Great Achievements (2003) “Early Commercial” Great Achievements. Downloaded from http://www.greatachievements.org/?id=3945 as at 15th November 2010. Lumsdaine E, Binks M (2007) “Entrepreneurship from Creativity to Innovation” Effective Thinking Skills for a Changing World. Nayab N (2010) “Entrepreneurship Theories” Start Up Success, 17th September. Downloaded from http://www.brighthub.com/office/entrepreneurs/articles/78364.aspx?p=2 as at 15th November 2010.