With the rapid development of dynamic global economy, increasingly countries are seeking breakthroughs of their economy development. Stimulated by these ever-increasing competition pressures, exploitation of new ideas and businesses which are of great potential to thrive economies, accordingly, is gainning widespread attention (Mansfield, 1972; Wong et al., 2005). In consequence, on a global scale, not only some developed countries with strong capability to absorb and implement new ideas, but also some emerging developing countries, are taking measures to inspire entrepreneurship and innovation with purposes of benefiting economic development from these competitive advantages (Stoneman, 1995; Zhao, 2001). It is universally held that entrepreneurship and innovation are complementary and their combination can efficiently contribute to economy performance (Grupp, 2001; Stoneman, 1995). During the transfer from idea creation to eventually economy development, innovation is supposed to be a necessary condition, but it also demonstrates great insufficiency which can be completed by entrepreneurship’s mediating effects (Audretsch, 1995; Camp, 2005). This essay will primarily conduct a brief definition of entrepreneurship and innovation while introduce the role of problem solving and creativity, and thereby observe the synergy between entrepreneurship and innovation. Then theoretical and practical analysis will be made in their repective relationship with economy development. Ultimately, the holistic realtionship between entrepreneurship, in conjunction with innovation, and economy development will be discussed.
Entrepreneurship and innovation are inclined to be misinterpreted identical since they both indicate creation and new development, but meanings they rootly represent are distinctive. Innovation is an instrument that intergrates, disperses and upgrades extant techniques and knowledge, then acts as a “conduit” for achieveing knowledge spillovers and technique invention, and consequently endows existing materials with a new capacity (Drucker, 1985; Drucker, 1994). Creativity, which represents generating new ideas, is the foundation of innovation, since innovation originates from creaticity (Amabile, 1996; Lumsdaine and Binks, 2007). In the initial stage of development, creativity is implemented to generate a wide range of ideas, and in a later period, innovation will rest on these creative ideas and further develop their potential. Entrepreneurship, however, is a type of organizational behavior focusing on opportunities rather than materials (Miller, 1983; Stevenson and Gumpert, 1991). It primarily consists of exploiting opportunities from various innovations, converting them into service or products, thereby commercializing it into market (Johnson, 2001). Problem solving spreads through their relationship and is connected with entrepreneurship in even every situation. It is the basis of generating ideas and then choosing the best for initiating and operating a prosperous business (Lumsdaine and Binks, 2007). In its definition stage, time is spent on searching for root causes and how the problem is inside correlated. Then in the discovery stage, energy will be concentrated on seeking plenty of ideas. In the following determination phrase, possible consequences will be considered by using criteria for success, and convert possibilities into practical application (Kirkham, Mosey and Binks, 2009).
Arising from studies dealing with relationship between entrepreneurship and innovation, the synerty between them is generally accepted (Zhao, 2005). Firstly, entrepreneurship and innovation complement with each other (Zhao, 2001; Michael, 2005). On one hand, as Legge and Hindle (1997) have observed, innovation is the special-purpose tool of entrepreneurship. Entrepreneurs exploit opportunities and seek commercial success resting on creative ideas selected and provided by innovation (Zhao, 2001). Herbig and his colleagues (1994)...
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