Discuss the Relationship Between Entrepreneurship Innovation and Economic Development

Topics: Innovation, Entrepreneurship, Economics Pages: 7 (2468 words) Published: December 4, 2012
University of Nottingham Ningbo China
Business School
Academic Year 2012/13 Autumn Semester

Entrepreneurship and Business


Discuss the relationship between entrepreneurship, innovation and economic development


Student ID: 6508658

Word Count:1949


According to the statistic presented by European commission (2011), in 2008 over 60% of enterprises were innovative in Germany, Luxembourg. The following EU-27 average innovative percentage was 51.6%. And the lowest propensities to innovative were also reach 24.3% by Latvia, 27.9% by Poland and 28.9% by Hungary. Huge proportion of entrepreneurship and large profit from it can be seen by the statistic (Eurostat, 2011), this consequence leads universities; take Oxford as an example, to start to encourage enterprise. What the entrepreneurship is and why they can occupy such a large quantity in the market. In this essay, the synergy between entrepreneurship and innovation and reflection of the result of this synergy on economic development will be discussed. 1. Definition: Entrepreneurship

In the last 250 years, economist defined entrepreneurs in different ways. Richard Cantillon (1755) defined entrepreneur as an adventure with uncertainty. In Cantillon’s view, entrepreneur refers to individuals who obtain profit from uncertain transaction with an expectation of buying in a lower price. Following definition on entrepreneurship carried out by Jean Baptiste Say (1963) puts emphasis on the diversity of roles that entrepreneurs must accept successfully if they are to make profit beyond simple transaction of merely processing and paying for all inputs and selling with a higher price of outputs. However, in 1934 the understanding of entrepreneurship delivered by Schumpeter is fully considering the previous missing elements of difference, uniqueness, innovation and change, (Lumsdaine, E. and Binks, M., 2007), which was proved with a practical evidence by the capitalist market development. Based on the theory of economic development delivered by Schumpeter (1934), Entrepreneur is only when he actually carries out new combinations and loses that character as soon as he has built up his business. In Schumpeter’s theory, the emphasis on innovation is placed obviously such as new combinations, new product, new production method, new market, and new forms of organization. Schumpeter’s statements on entrepreneurship complete the missing feature which is considered as disruptive and initiative. Apart from changes creativity is also recognized as the mean concept of entrepreneurship. In the context of entrepreneurship, the creativity concerned as the soul that leads to the development of new products and processes which when innovated replace the traditional and previous version. ( Lumsdaine, E. and Binks, M., 2007) Sunil Mittal (2002) also deliver a speech named I started with a dream, in which defines process with a dream, in other words the ability of creative. Since 2001, the Global Entrepreneurship Monitor (GEM) has discussed two kinds of entrepreneurship, the necessity and opportunity entrepreneurship. The necessity entrepreneurship is focus on requirement-based of people (Reynold et al., 2005); while the opportunity entrepreneurs depend on the motivation of pursue an opportunity to start her venture. In this essay, all the entrepreneurships are considered as opportunity entrepreneurship. In conclusion, entrepreneurship is a process that individuals pursue an opportunity by the spirit of adventure and destructive creation. 2. The synergy between entrepreneurship and innovation

In Entrepreneurship-From creativity to innovation, Lumsdaine, E. and Binks, M. (2007) consider innovation as a whole process with four period as invention, commercialization, dispersion and permanent change, which is long wave of business cycle demonstrate in Schumpeter’s theory(1934). The entrepreneurship can make business innovation happed. In term...

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