Question:
Critically evaluate the various dimensions of innovation and the drivers that contribute to the growth of small start up enterpreneurs.
It’s a well establish fact that the Small Startup companies are significant in bringing economic renewal and growth. The carrying out the new combination has quite less to do with the firm’s size, instead of the newness in context of the entrepreneurship and innovation that has caught the attention of both the policymakers as well as academics. There are various examples of successful innovation from the Start ups that have tried to revolutionize the whole industry.
It is noted that young entrepreneurs, startup companies, spin offs in universities, along with small innovative companies try to produce the key technological breakthrough as well as innovation by leaving the efforts of research and development and huge international companies innovative strategies. The paper will discuss about the innovation and entrepreneurs small start-ups and the Schumpeter’s different contribution in the economics. The paper will also discuss about the Schumpeter’s thoughts on role of innovation and economic growth of entrepreneurship.
The main objective of this research paper is to analyze the link among the innovation and economic growth by the small start-ups, by following the approach of Schumpeter by considering the activity of entrepreneurship.
Small companies are the backbone of any economy (Carayannis, Barth and Campbell 2012). The Startups are recognized all over the work, as it holds high significance and contribute in the development of economy and society (Lee, Park, Yoon and Park 2010). Startups also contribute in the high employment growth, exports promotion, outputs, and even try to foster the entrepreneurship (Lee, Park, Yoon and Park 2010). There are many countries that have given high stress over the small companies and have even explored the building blocks in the development of economy. Chaston (2010) mentions that presently, the market conditions are also changing for the small startups after the changes in economic reforms, which has made the organizations to come in the constant pressure for performing well, delivering the quality products and services, and keep the cost of operation lower (Chaston 2010).
In the present time, sustaining in the present market and meeting the customers, it has become significant for the companies to create differences according to the competencies and capabilities (Lee, Park, Yoon and Park 2010). They require competing over various dimensions like development and product design, cost, manufacturing, communication, distribution, along with innovative marketing ways. All these challenges inspire for the small startups reorientation, in order to have demand for the high flexibility, dynamism, and the innovation to get met (Bridge and O’Neill 2012). In order to have the economic development, it is quite critical for the small startups to simultaneously create, apply as well as introduce the innovation.
It is explored that in the last century 60% of the total innovation was done in small startups, but it is also true that many innovations were not successful, as it lack the inability and professionalism for contributing with other companies (Bridge and O’Neill 2012). In different pieces of work, the innovation and the entrepreneurship interdependencies are connected (Bridge and O’Neill 2012). It is noted that in the 2001 OECD study of growth it is explored that innovation and the entrepreneurship has four microeconomic drivers in the growth of the economy in the economy based on knowledge.
Gupta, Guha and Krishnaswami (2013) explores that the entrepreneurship as one of the 4 key drivers of the innovation includes, ICT, human resources, sharing, and building of knowledge. Gupta, Guha and Krishnaswami (2013) has also proposed the five drivers related to the entrepreneurship that includes culture, opportunity, abilities, incentives as well as capital, and every driver create influence over the policy instrument comprehensive policy. From this, Startups can try to develop the policy framework related to the growth drivers in entrepreneurship, which could be explained more in context of the innovation, instead of small businesses (Gupta, Guha and Krishnaswami 2013). In context of Ã…Å¡ledzik (2013), entrepreneurship is the significant innovation driver, but it is challenging to measure it as it includes risk attitude, opportunities for minimizing the risk, capital access, and new ideas receptiveness (Ã…Å¡ledzik 2013).
The concept related to the entrepreneurship and innovation is the Schumpeter’s most different contribution in the economics and the common theme in the writings of Schumpeter’s was the innovation role and the economic growth through entrepreneurs (Carayannis, Barth and Campbell 2012). Despite of this fact, Schumpeter’s is considered among the first one who has tried to lay out the clear concept of the innovation and it is noted that his views has changed over the period of time (Crossan and Apaydin 2010). In the previous views that were stressed in the Theory of Economic Development in 1912, Schumpeter’s has tried to highlight the entrepreneur’s functions, whose role is to carry out the new combinations. Schumpeter’s has viewed occurrence of the revolutionary changes as the base.
It is noted that Schumpeter’s has argued that any person who try to seek the profits should try to bring innovation. This will create different employment in the system of economy within the lying productive supplies. Schumpeter’s has believed that is innovation is also considered as the important driver in bringing competitiveness and dynamics of economy (Colomo-Palacios and García-Crespo 2013). He also believed that innovation is considered as center of changes in economy that causes creative destruction in context of democracy, capitalism, and socialism (Carayannis, Barth and Campbell 2012). As per Schumpeter innovation is referred as the process of the industrial mutation, which revolutionizes the economic structure by destroying the old one and creating the new one.
Schumpeter also describes the development as the historical process in bringing structural changes that is driven through the innovation. He has divided the process of innovation in the four dimensions such as imitation, invention, diffusion, and innovation (Carayannis, Barth and Campbell 2012). Then he has put the entrepreneur dynamics in the between of the whole analysis. In the theory of Schumpeter, the activity and possibility of the entrepreneurs, draws the scientist and investors discoveries in creating the new opportunities in the area of employment, investment, and growth.
As per the analysis of Schumpeter the phase of invention or the basic innovation has lesser impact, where else the imitation and diffusion process has high influence over the economic state. The effects of macroeconomic in the basic innovation are actually noticeable in the starting years (Carayannis, Barth and Campbell 2012). What actually matters in context of economic growth, investment, as well as employment doesn’t come under the basic innovation, instead it is referred as the diffusion of the basic innovation and its referred as the period when the imitators start realizing the potential of profits in the new products and invest in that technology (Colomo-Palacios and García-Crespo 2013).
In other context, innovation is referred as the creative destruction, which develops the economy, where else the entrepreneur tries to perform the functions related to change creator (Crossan and Apaydin 2010). Entrepreneur implies in the words of Schumpeter’s is carrying out the innovation is the function that is basically important in the history. Typical entrepreneurs characteristic are: determination, intelligence, alertness, and energy. It is also noted that entrepreneurship is referred as innovation along with innovation actualization (Carayannis, Barth and Campbell 2012). In this context, it is marked clearly that entrepreneurship is not easy to be confused with the four invention complementary functions such as risk taking, administration, error correction, non-entrepreneurial, as well as distinctive in nature. In the work of Schumpeter’s over the entrepreneurship includes two phases such as first theory of entrepreneurship and second is entrepreneurship theory.
Summary/Conclusions
It is explored from the research paper that the entrepreneurship is refereed as the activity which could easily connect the individuals in that they try to provide the characterized through the different reflection, along with innovative approaches as well as risk taking approaches for the purpose of creating the new business and expanding the previous business. The paper also includes that it is also considered as managerial performance as it tries to create opportunities from time to time in order to bring the results that are beyond the own capabilities of an individual that also includes the innovation and creativity. It is noted that entrepreneurship is considered as vast topic that includes key aspects of growth and economy. It is also evident from the paper that entrepreneurship is only possible through the new innovative ideas that bring startups in the market. In order to have startups, innovation is important to have the investment, and all drivers’ leads towards the economic growth. In my opinion innovation is the key towards growth of any company, and for the companies to grow and expand their business, it’s important that they should try to innovate new products in market and even try to include new features in the products that could catch the eye of the customers. For the startups to grow and capture the good market share, it’s important for them to explore the market and understand the needs of the customers and afterwards try to bring new and unique items in the market.
References
Crossan, M. M. and Apaydin, M. 2010. A Multi-Dimensional Framework of Organizational Innovation: A Systematic Review of the Literature. Journal of Management Studies, 47(6), pp. 1154-1191.
Lee, S., Park, G., Yoon, B. and Park, J. 2010. “Open innovation in SEMs — An intermediated network model”. Research Policy, 39(2), pp. 290–300
Bridge, S. and O’Neill, K. 2012. Understanding Enterprise, Entrepreneurship and Small Business. Edition 4th edition. Palgrave Macmillan.
Carayannis, E.G., Barth, T.D., and Campbell, F.J. 2012. The quintuple helix innovation model: global warming as a challenge and driver for innovation. Journal of Innovation and Entrepreneurship, 1, pp. 1-2.
Gupta, P. D., Guha, S. and Krishnaswami, S. S. 2013. Firm growth and its determinants. Journal of Innovation and Entrepreneurship, 2, pp. 1-15
Colomo-Palacios, R. and García-Crespo, A. 2013. “A case analysis of semantic technologies for R&D intermediation information management”. International Journal of Management, 35(5), pp. 465–469.
Ã…Å¡ledzik K. (2013). Schumpeter’s view on innovation and entrepreneurship. University of Zilina & Institute of Management.
Chaston, I. 2010. Entrepreneurial management in small firms. London: Sage Publications.
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