The Relationship Between Entrepreneurship, Innovation, Economic Development and Sustainability
The Relationship between Entrepreneurship, Innovation, Economic Development and Sustainability
Global economies of today are complex systems. These systems consist of multiple factors that, like gears in a clock, interact with each other in order to perform effectively. Through the course of this essay, I will be examining the ways in which entrepreneurship, innovation and economic development are related. The role of sustainability in this relationship will also be discussed. I believe that entrepreneurship and innovation fuel economic development and promote sustainability. In order to completely understand the relation, it is important to define what is meant by each of the terms before identifying any links between them.
Joseph Schumpeter defined entrepreneurship as “whatever the type, everyone is entrepreneur only when he actually carries out a new combination and loses that character as soon as he has built up his business, when he settles to running it as other people run their business.”(Schumpeter, 1934, p. 78) I agree with most of this definition as this basically means that a person is only an entrepreneur when something new is created. After this point, they are not considered entrepreneurs as whatever they have created is no longer new. Schumpeter also said that innovation is the creation of a new product, new method of production, new markets or new ways of directing resources. It is also important to distinguish between incremental and radical innovation. Incremental innovation refers to a small change whereas radical change means a revolutionary change, For example, the invention of the first mobile phone was a radical innovation. The release of Apple’s latest iPhone is an incremental innovation. Firstly, I will examine the correlation between just entrepreneurship and innovation.
In my opinion, it is impossible to be an entrepreneur without being innovative. Schumpeter’s definition supports this belief. The person needs to create
Global economies of today are complex systems. These systems consist of multiple factors that, like gears in a clock, interact with each other in order to perform effectively. Through the course of this essay, I will be examining the ways in which entrepreneurship, innovation and economic development are related. The role of sustainability in this relationship will also be discussed. I believe that entrepreneurship and innovation fuel economic development and promote sustainability. In order to completely understand the relation, it is important to define what is meant by each of the terms before identifying any links between them.
Joseph Schumpeter defined entrepreneurship as “whatever the type, everyone is entrepreneur only when he actually carries out a new combination and loses that character as soon as he has built up his business, when he settles to running it as other people run their business.”(Schumpeter, 1934, p. 78) I agree with most of this definition as this basically means that a person is only an entrepreneur when something new is created. After this point, they are not considered entrepreneurs as whatever they have created is no longer new. Schumpeter also said that innovation is the creation of a new product, new method of production, new markets or new ways of directing resources. It is also important to distinguish between incremental and radical innovation. Incremental innovation refers to a small change whereas radical change means a revolutionary change, For example, the invention of the first mobile phone was a radical innovation. The release of Apple’s latest iPhone is an incremental innovation. Firstly, I will examine the correlation between just entrepreneurship and innovation.
In my opinion, it is impossible to be an entrepreneur without being innovative. Schumpeter’s definition supports this belief. The person needs to create
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