Relationship between Entrepreneurship, Innovation, and Economic Development
Discuss the relationship between entrepreneurship, innovation and economic development. What role if any do creativity and problem solving play in this relationship? Refer to both theory and examples from the business world to support your discussion.
Thomas Edison once said, “I never perfected an invention that I did not think about in terms of the service it might give others...I found out what the world needs, then I proceed to invent.” This highly recognised inventor and innovator, the creator of the light bulb, is a perfect example of how sheer entrepreneurship and innovation has helped solve problems and develop our world to where it is today. In this essay, I will discuss how entrepreneurship, innovation and economic development interlink in a ‘‘triangular relationship’’ and how creativity and problem solving influence this connection, as discussed by theorists such as Joseph Schumpeter. I will also examine three current global businesses, Apple, Ryanair and Groupon, who I consider pivotal to our changing world.
Entrepreneurship is a very subjective topic amongst theorists such as Richard Cantillon and Jean Baptiste Say. However, the most widely accepted theory is that of Joseph Schumpeter who states “everyone is an entrepreneur only when he actually carries out new combinations and loses that character as soon as he has built up his business” (Lumsdaine & Binks 2007 p.13). This was deduced from his view that as soon as the combined factors of production (land, labour, capital and enterprise) have become established, the uniqueness is gone and the term entrepreneur no longer applies. (Lumsdaine & Binks 2007 p.13) “Entrepreneurship is the result of what entrepreneurs do and refers to events and their economic impact” (Lumsdaine & Binks 2007 p.11). Many factors help to create a successful entrepreneur who increases economic development by applying innovation and creativity to solve problems. “Economic development is the process by which a community
Thomas Edison once said, “I never perfected an invention that I did not think about in terms of the service it might give others...I found out what the world needs, then I proceed to invent.” This highly recognised inventor and innovator, the creator of the light bulb, is a perfect example of how sheer entrepreneurship and innovation has helped solve problems and develop our world to where it is today. In this essay, I will discuss how entrepreneurship, innovation and economic development interlink in a ‘‘triangular relationship’’ and how creativity and problem solving influence this connection, as discussed by theorists such as Joseph Schumpeter. I will also examine three current global businesses, Apple, Ryanair and Groupon, who I consider pivotal to our changing world.
Entrepreneurship is a very subjective topic amongst theorists such as Richard Cantillon and Jean Baptiste Say. However, the most widely accepted theory is that of Joseph Schumpeter who states “everyone is an entrepreneur only when he actually carries out new combinations and loses that character as soon as he has built up his business” (Lumsdaine & Binks 2007 p.13). This was deduced from his view that as soon as the combined factors of production (land, labour, capital and enterprise) have become established, the uniqueness is gone and the term entrepreneur no longer applies. (Lumsdaine & Binks 2007 p.13) “Entrepreneurship is the result of what entrepreneurs do and refers to events and their economic impact” (Lumsdaine & Binks 2007 p.11). Many factors help to create a successful entrepreneur who increases economic development by applying innovation and creativity to solve problems. “Economic development is the process by which a community
References: Hindle, K. (2009) “The Relationship Between Innovation and Entrepreneurship: Easy Definition, Hard Policy” Downloaded from http://www.swinburne.edu.au/lib/ir/onlineconferences/agse2009/000173.pdf 16th November 2011 Howard-Jones, P Karlsson, C., Friis, C. & Paulsson,T. (2004) “Relating Entrepreneurship to Economic Growth” Downloaded from http://www.infra.kth.se/cesis/documents/WP13.pdf 16th November 2011 Lumsdaine, E Sanderson, R. (2008) “Apple has biggest impact on world consumers: survey” Downloaded from http://www.reuters.com/article/2008/03/31/us-brand-poll-idUSL2850164020080331 16th November 2011 Sloane, P Wikipedia2 (2011) “Groupon” Downloaded from http://en.wikipedia.org/wiki/Groupon 16th November 2011 Wong, P., Ho, Y Zimmer, L. (2011) “Entrepreneur, Innovator and Apple Co-Founder Steve Jobs Dies at 56” Downloaded from http://inhabitat.com/entrepreneur-and-innovator-steve-jobs-dies-at-56/ 16th November 2011