Innovation And Entrepreneurship In Economic Growth For Small Entrepreneurs

The Relationship Between Innovation and Entrepreneurship

Question:

The concept of innovation and enterpreneurship are probably schumpeter’s most distinctive contributions to economics. One of the most common themes in schumpeter’s writing was the role of innovation and entrepreneurship in economic growth. Critically evaluate the various dimensions of innovation and the drivers that contribute to the growth of small start-up enterpreneurs.

In the economic globalization, the traditional policy towards the industrial growth is not guaranteed and it cannot always assure the employment. The policy makers now a day are interested on the innovation and the policy of the entrepreneurship in the local, regional, national and international level. The entrepreneurship policy and the innovation both are important for the economic renewal and growth. This research work will explain the different dimensions of innovation and the other drivers that contribute towards the economic growth of small entrepreneurs.

According to Kirkeby and Christensen (2010), the entrepreneurship leads the innovation and exploitation of opportunities, though all the opportunities cannot create benefits for the society. The entrepreneurs are the people those creative and innovative to find the strategic [path through which they can obtain their desired power, prestige and moreover success. On the other hand, Studdard and Darby (2011) stated that the innovation is the technical approach that is mainly focused in the innovation in the products or process. It includes the technological innovation that can generate knowledge towards the small start-up entrepreneurs.

It is important but not easy to make any interpersonal relationship between innovation and entrepreneurship. As per the view of Dahlstrand and Stevenson (2010), the entrepreneurship create innovative combination of new products, markets, materials and new form of organization. It is believed that the entrepreneurs are the innovators those create the developments towards the economy. The continuous innovation of the entrepreneurs can generate continuous opportunities for the economy. It helps the small entrepreneurs to achieve the equilibrium point.

Ratten (2012) stated that in the recent times, the researchers observe the growth of the entrepreneurship organization that helps to measure the change in the technologies. It helps the entrepreneurs to make the decisions on choosing the profit maximizing agents. According to Bygrave and Zacharakis (2009), the neo-classical model of the economic cannot provide the entrepreneurship related issues that are the probable cause behind the barriers towards the technological innovation. The growth of the small entrepreneur organization depends on the innovation growth rate that can be measured easily. 

As per the opinion of Burns (2012), the innovation may create the economic growth towards the small entrepreneur organizations. The organization spends money on the research and development program. This program helps the small entrepreneurs to achieve the technical progress through innovation. These innovations help to obtain the economic growth in the organizational level. Dhliwayo (2014) established the neo-classical tradition where it is said that the quality, quantity and productivity of the entrepreneur organization can be developed through the enhanced labour and capital inputs.

Meulenbroek (2009) observed that entrepreneurship welcomes the new organization in the current market place and also the innovation. Studdard and Darby (2011) added that the entrepreneurship helps towards enhancing the economic performance of the organization. It leads to the creation of change, creation of competition, creation of innovation and also increasing the rivalry within the competitive industry. The entrepreneurs are always interested in adopting new and innovative technologies to get the new opportunities within the competitive new market. It is believed by many researchers that the entrepreneurs work towards the change with the help of their new and innovative ideas towards the marketers. It helps to create growth to the towards the organization within the competitive market.

The Importance of Continuous Innovation for Economic Growth

According to Dhliwayo (2014), there is an economical link between the economic growth of the organization and the entrepreneurship at the time when an organization is build. The economic growth of a country can be measured with the increased productivity, output and wealth of the small entrepreneurship organization. The multi-dimensional concept can be drawn for the entrepreneurship from the micro level concept. Bygrave and Zacharakis (2009) stated that the economic growth can be measured with the increased creation of job within the newly created small entrepreneurship organizations.

Meulenbroek (2009) informed that it is seen from the previous study that most of the new jobs are created within the new and small entrepreneurship organizations. Sometimes, it is also shown that the creation of new firms causes the economic growth of the organization. On the contrary, Dahlstrand and Stevenson (2010) opined the jobs those are created within the new and small entrepreneurship firms are basically the jobs with low quality. The independent organizations are important for the welfare in the economies through the growth in the level of income and also creating the net migration surplus.

Burns (2012) stated that the increased rate of unemployment can create positive or negative effect on the start-up activity of a new small entrepreneurship organization. The new firms create the opportunities towards the new job creation within their organizations and also in the existing organizations. It is also stated that the growth of the new entrepreneurship organizations have limited power towards reducing the unemployment rate. The new organization can improve the levels of unemployment through creating new jobs. Ratten (2012) informed that the unemployment enhances the opportunity for self-employment through the entrepreneurial activities. On the other hand, the push effect with the low entry barriers may increase the opportunity for employment for the owners of the business, but, it may not create the growth. So, it can be said that the increased number in the entrepreneurs may reduce the unemployment rate within the society of a particular country.

Kirkeby and Christensen (2010) stated that the error correction model helps to measure the equilibrium rate towards the entrepreneurship that can create development in the economy. Equilibrium rate provides the idea to the people and based on the rate of equilibrium they can make the choice between wage employment and self employment within the labour market. The concept of equilibrium rate on the entrepreneurship shows the significance of this rate. The countries those are differing from the equilibrium rate of entrepreneurship helps to increase the growth penalty from the concept of economic growth. It helps to determine if the actual entrepreneurship rate is below or above the equilibrium rate. As per the view of Bygrave and Zacharakis (2009), there are both the positive and negative relationship between the rate of entrepreneurship and the economic growth.

According to Meulenbroek (2009), within the 23 OECD countries, the entrepreneurship is done based on the self-employment or the personal business ownership. The business ownership and the self employment are not same. The business ownership affects the development in the level of entrepreneurship. But, it is difficult to measure as the data from the outside countries are not easily available. Business ownership helps to calculate the entire self employed business stocks and not for the small new entrepreneurship businesses. There is no relation between these two within the developing country because in these countries, the entry level activities are more unpredictable in nature. The economic growth of a country is mainly measured by the short term rates of the average income of the people of the country.

The Role of Entrepreneurship Organizations in Measuring Change

However, Dhliwayo (2014) stated that the innovation is not the sole domain for the entrepreneurship. The role of entrepreneur is to be the innovator among the competitor organizations within the competitive market. It is measured by the level of risk taking nature and the managerial responsibilities to effectively handle those risks. The national economic growth can be created through the innovation and the creation as these are the factors towards the entrepreneurship. It includes both the entry of the new firms in the competitive market and the innovation and the creation within the existing small entrepreneurship organizations.

Technology can be created through entrepreneurship organization. Studdard and Darby (2011) stated that the innovative technology is the main driving forces behind the globalization. With the every innovation in the technology, the sophisticated changes happen in the existing knowledge of the entrepreneurship firms. The innovation policies are dependent on the linear model or the science push model. This model is based on the scientific research. After that, more of the demand-led view is adopted. It was based on the interaction between the users and the producers of innovation. It is known as the ‘National Innovation System’ (NIS). Innovation policy affects the innovation performance based on specific needs, institutional structure and abilities of the country.

Conclusion:

This research was aimed to understand the innovation and the other influential factors that can help in the growth of the small entrepreneurship organizations within the country. The learner stated that the innovation within the entrepreneurship organization can generate the improvements in the economic performance. The economic performance can be measured with the help of the average income of the entire population. The factors those affects the success of any new activities of the entrepreneurship organisation are the structure of the organisation, current business strategy of the organisation and their entrepreneurial characteristics. It is understood from the above research that innovation is a development process as it shows the translation of ideas. It helps the organisation in product designing, to enhancing marketing, planning the operations and managing the finances. It also helps the organisation in enhancing the technical manufacturing abilities, establishing the organisation and designing the staffing operations. The enhanced rate of entrepreneurship helps the organization to achieve the equilibrium point that helps to achieve the economic enhancement within the activities of the small entrepreneurship organizations.  

Reference List:

Books:

Burns, P. (2012). Corporate entrepreneurship. Basingstoke: Palgrave Macmillan.

Bygrave, W. and Zacharakis, A. (2009). Entrepreneurship. Hoboken, NJ: John Wiley & Sons.

Journals:

Dahlstrand, Ã¥. and Stevenson, L. (2010). “Innovative entrepreneurship policy: linking innovation and entrepreneurship in a European context”. Annals of Innovation & Entrepreneurship, 1(1), pp. 319-324.

Dhliwayo, S. (2014). “Entrepreneurship and Competitive Strategy: An Integrative Approach”. Journal of Entrepreneurship, 23(1), pp. 115-135.

Kirkeby, S. and Christensen, K. (2010). “Designing for innovative capability in the structure of organizations”. IJEIM, 11(2), pp. 194-215.

Meulenbroek, R. (2009). “A physical work environment for knowledge sharing in organizations”. IJEIM, 10(3/4), pp. 307-314.

Ratten, V. (2012). “A theoretical framework of entrepreneurship and innovation in healthcare organizations”. International Journal of Social Entrepreneurship and Innovation, 1(3), pp. 223-232.

Studdard, N. and Darby, R. (2011). “Social entrepreneurship: managing strategic decisions in Social Entrepreneurial organizations”. International Journal of Social Entrepreneurship and Innovation, 1(1), pp. 66-82.