Entrepreneurship and Economic Development.
Discuss the relationship between entrepreneurship, innovation and economic development. What roles do creativity and problem solving play in this relationship? Refer to both theory and examples from the business world to support your case.
It seems inevitable that there will be a strong link between entrepreneurship, innovation and economic development and that creativity and problem solving play a key part in this. It is important, however, to first have a better understanding of the definition of these terms. This in itself will give us a better understanding of the relationship between them.
Entrepreneurship is particularly difficult to define. Entrepreneurship is the result of what entrepreneurs do and their impact on society. Defining the characteristics of an entrepreneur is where is gets difficult. Jean Baptiste Say remarked in the 19th century that an entrepreneur is an economic agent who “unites all means of production” and the possesses the judgement to “estimate the importance of the product, the probable amount of demand and the means of its production”. This is a good start but it is Joseph Schumpeter who really focuses on defining the missing characteristics of JB Say’s work. Schumpeter’s work focuses on the need for entrepreneurs to be innovative, different and unique. “Whatever the type, everyone is an entrepreneur only when he actually carries out a new combinations and loses that character as soon as he has built up his business”. This famous quote from Schumpeter shows us his belief in the need for innovation and change for it to be considered entrepreneurship. Harvey Leibenstein added to this definition in the 20th century by stating the need for an entrepreneur to be an opportunity spotter or a “gap-filler”. Pulling together the various ideas from these prominent thinkers we can define an entrepreneur as someone who unites means of production in a profitable, innovative way that fills a gap in the market. This seems like a good general
It seems inevitable that there will be a strong link between entrepreneurship, innovation and economic development and that creativity and problem solving play a key part in this. It is important, however, to first have a better understanding of the definition of these terms. This in itself will give us a better understanding of the relationship between them.
Entrepreneurship is particularly difficult to define. Entrepreneurship is the result of what entrepreneurs do and their impact on society. Defining the characteristics of an entrepreneur is where is gets difficult. Jean Baptiste Say remarked in the 19th century that an entrepreneur is an economic agent who “unites all means of production” and the possesses the judgement to “estimate the importance of the product, the probable amount of demand and the means of its production”. This is a good start but it is Joseph Schumpeter who really focuses on defining the missing characteristics of JB Say’s work. Schumpeter’s work focuses on the need for entrepreneurs to be innovative, different and unique. “Whatever the type, everyone is an entrepreneur only when he actually carries out a new combinations and loses that character as soon as he has built up his business”. This famous quote from Schumpeter shows us his belief in the need for innovation and change for it to be considered entrepreneurship. Harvey Leibenstein added to this definition in the 20th century by stating the need for an entrepreneur to be an opportunity spotter or a “gap-filler”. Pulling together the various ideas from these prominent thinkers we can define an entrepreneur as someone who unites means of production in a profitable, innovative way that fills a gap in the market. This seems like a good general
References: Oxford Dictionary definition of Innovating http://oxforddictionaries.com/view/entry/m_en_gb0412650#m_en_gb0412650 World Bank Definition of Economic Development http://www.worldbank.org/depweb/english/beyond/global/glossary.html OSU Definition http://oregonstate.edu/instruct/anth370/gloss.html Entrepreneurial Economics Wiki http://en.wikipedia.org/wiki/Entrepreneurial_economics