“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, that is development of new products and processes which when innovated replace the traditional and previous versions. Creativity leads to a greater fulfillment on an individual basis as we use our imagination to create our new horizons for what we do in our lives. By imagining what we could be and achieve, we move beyond the boundaries we have previously set for ourselves. Innovation can be seen as practical application of creativity in an organization.” (Lumsdaine and Binks, 2007) So Innovation is actually the product of Creativity and Problem Solving with the help of Entrepreneurship. “Entrepreneurs are the catalysts that spur the economy with their innovations and technological change” – Joseph Schumpeter (Lumsdaine and Binks, 2007). Entrepreneurship leads to Economic Change and economic development through creative destruction. When the Entrepreneurs sell their Idea, the Idea is a solution to a problem and is a need that has not been met before which means there was a gap in the market for that product or service which he innovated, consumers buy it because there is a demand for it which the entrepreneur realized and innovated it and as more and more consumers buy it, more will be the improvement in Living Standards of the inhabitants of the Economy; in conclusion, entrepreneurs showing their creativity solve a problem and innovate a product or service which benefits the economic development of an economy directly and indirectly. Wal-Mart Stores is a relevant example for understanding the relationship between Entrepreneurship, Innovation and Economic Development, the company which is ranked no. 18 in the Forbes List of “Global 2000 Leading Companies 2011”. Samuel Moore Walton is one of the most successful entrepreneurs who made it possible in less than half a century. He founded the Company in 1962 when he opened the company’s first discount store in Rogers, Arkansas, USA after watching a market gap of Discount stores in his State of Arkansas. He just figured...
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