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The Relationship Between Entrepreneurship Innovation and Economic Development

In: Business and Management

Submitted By meiguihong
Words 1589
Pages 7
Technological innovation has made a great contribution on economic development. However, entrepreneurship, another concept, also has essential consequences in terms of economic performance. The concept of the “entrepreneur as innovator” which was established by Schumpeter (1911) drives economic development. Therefore, it can be inferred that entrepreneur is a key source which leads to the increasing of economic growth. This essay will discuss the relationship between entrepreneurship, innovation and economic development in four sections. The first section will focus on the relationship between innovation and entrepreneurship. Section two will show the advantages of innovation in economic development. Section three will describe the impact of entrepreneurship on economic growth which divided into three parts: the regional, industry and global levels. The final section will concentrate on the role creativity and problem solving play in this relationship.

The relationship between innovation and entrepreneurship is mutual. On the one hand, innovation is a precondition of entrepreneurship to drive entrepreneurial establishments to succeed. In order to prove this, Hitt, Ireland, Sexon and Camp (2002) point out that a successful entrepreneurial establishment cannot leave the help of essential innovation. Many innovations are produced by individual entrepreneurs; it usually takes place in large companies in developed countries. Therefore, a large amount of entrepreneurial opportunities are not able to be used by these entrepreneurs due to the entrepreneurial large companies (ibid). All in all, as entrepreneurship plays a substantial role in both performance and growth of established companies, innovation has a major impact on most companies in regional or national markets. On the other hand, entrepreneurship is an inspiration and a key process of innovation. The...

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