Role of Entrepreneurship and Innovation

“They have employed existing means of production differently, more appropriately, more adventurously. They have “carried out new combinations”. They are entrepreneurs” – Joseph Schumpeter (Lumsdaine and Binks, 2007). Entrepreneurship is a procedure through which individuals identify opportunities (problems that need to be solved or unmet needs) in the market place, allocate resources, initiate change by being innovative and creative and create value through solutions. One of the Factors of Production to produce goods or services is Enterprise with Land, Labour and Capital; an entrepreneur combines all other factors of production by enterprise, which is actually problem solving, risk taking and creativity, to come up with innovative products or services. “Innovation is the ability to see change as an opportunity - not a threat”. (Steve Jobs,2010). It is not necessary that Innovation is something completely new which is stated as ‘Discrete Change’ by Joseph Schumpeter, it can also be a ‘Gradual Change’, that is a product or service which is better than what was there before (Lumsdaine and Binks, 2007). It can be called a process by which an Idea or invention is translated into a product or service for which people will pay and perceive it as being new. Entrepreneurship is incomplete without Innovation as Steve Jobs said, “Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.”. (Steve Jobs,2010). Economic Development can be defined as the development of economic wealth for the well being of a country’s inhabitants. It implies progressive changes in the socio-economic structure of an economy, change in the distribution pattern of income, adoption of new technologies, creation of jobs, transition from agro-based to industry-based economy and general improvements in living standards.
According to Lumsdaine and Binks,“In the context of entrepreneurship, it is creativity that leads to Innovation,

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