Entrepreneurship, Innovation and Economic Development - Term Paper Example

Entrepreneurship, Innovation and Economic Development There is pressure for every individual and business in the world to be more innovative and creative. All nations are calling upon the youth to develop entrepreneurship skills. All job adverts require innovative and creative individuals. Institutions offer entrepreneurship lessons as part of their curriculum. These terms have transformed the business world. No single business wants to remain at the same place as the there is stiff competition. Therefore, organizations require innovative and creative individuals; who are ready to explore new opportunities. Entrepreneurship, innovation, creativity, and problem solving are the key aspects that result to economic development in any society. The term entrepreneurship in business to describes the process of taking the risk to explore markets and invest capital with the hope of making profits. An entrepreneur is a confident person, who is willing to venture into the market sometimes with a new product or idea (Wennekers, Stel, and Carree, 2010:370). However, he or she is ready to face the challenges involved and keep focused on the results. Such individuals are dedicated to achieving their goals of making profit no matter the market trends. Entrepreneurs do not limit their ability to the resources they control but seek opportunities of mobilizing more resources. Entrepreneurship requires prior planning. One must analyze the market critically. Despite the risk, one must have faith of creating a difference in the global market. An entrepreneur must think positively and be able to make decisions. Due to changes in the market trends, the entrepreneur should learn how to adapt to new situations. Therefore, flexibility is a necessity but the goal of making profits remains unchanged. Successful entrepreneurs should study the market and recognize a need that other businesses are not addressing fully. They then set out to transform the unrefined, raw idea into a business venture. The viability of the idea should be critically. This requires a lot of patience and hard work. Persistence is evident from Ted Turner’s example on his road to becoming a successful entrepreneur. Ted came up with the idea of giving people more news than they were receiving and started CNN. He carefully studied the market to recognize the opportunity and it took him faith and persistence to pull it through effectively. People who lack endurance are not successful entrepreneurs. For an entrepreneurial venture to be a success, planning and management should be effective. Self-discipline is also compulsory. One should ensure that there is sufficient financing before they choose to start up any venture. Management is very critical in entrepreneurship because many ventures fail due to lack of proper management. Some are ideas are very viable but the individuals lack critical managerial skills and therefore personal failure contributes to failure of the idea (Terrence and Ulijn, 2004:105). The market should be read logically and analytically to avoid disappointment. There are individuals who prefer to start on small scale and advance with time as they learn to adjust to market trends. Others start large-scale businesses. Capital entrepreneurs invest a lot of capital and therefore take a greater risk. Capital entrepreneurs are daring enough to invest a large sum, expecting better profits. Usually, they have control on more resources and have the right connections in the market. However, even small-scale entrepreneurs can succeed if they plan strategically. Entrepreneurs must apply innovation to compete effectively in the market. Innovation is the exploitation of any new opportunity in the business world to comer up with a new product or service in the market. Innovation seeks to improve the products, goods, or services existing in the market. Innovation takes advantage of new technologies to improve the existing products. Innovators are critical thinkers and can recognize the sectors of business that can benefit from restructuring and transformation. Innovation brings out a new value of things economically. Innovation can take five different forms. The first one is bringing into existence a new good or a new quality in the existing goods. A second form of innovation is coming up with a new procedure in production that does not rely on scientific discovery. A third form involves recognizing a market for existing goods. The fourth form is discovering a new source of raw materials. The new source might need creation first. The fifth form of innovation is bringing into existence a new form of organization (Szirmai, Wim, and Goedhuys 2011:135). Innovation is a critical term that involves two distinct processes. One of the processes is invention. Invention is the coming up with a new idea. The second process involves implementation of the new idea through different transformation to produce tangible economic outcomes. Different ideas need different transformations to be of economic value (Hindle, 2009:76). Existing entrepreneurs need to adopt innovation so that they can compete more efficiently in the developing markets. Therefore, the level of innovation depends on the markets. Market sizes and functioning affects innovation greatly. This is because innovations will not be of economical value if there is a small market. Innovation requires intensive skills and adequate knowledge and therefore an innovative entrepreneur requires budgeting for capacity building. This budgeting requires provision for training laborers, as they need skills on the innovation for them to be efficient. Lack of skilled labor and highly trained professionals affects success of the innovation negatively. For example, some developing countries are trying to adopt trade liberalization without provisions for an absorptive capacity. In such cases, assumptions are that information will flow freely to the people. A realistic approach should involve training some individuals on trade liberalization and then these can ensure that information flows to all the people in the market (Audretsch, 2006:54). Entrepreneurship and innovation are necessary for dynamism in the economy of any society. All entrepreneurs must remain pragmatic and proactive and apply strategic planning in all their endeavors make profits. Any organization coming up with innovations must be prepared to commercialize its new product. It is worth noting that any successful innovation must integrate detailed research, design, and information from the market trends. Entrepreneurship and innovation are the leading contributions to economic development. Competition among businesses depends on innovation. All industries in the world have moved from traditional operations and adopted new technologies and innovations. Service oriented businesses such as banking; supplies, telecommunication, and information have embraced innovation. Innovation is responsible for the current economic status of most regions, changes in production, and all activities adding economic value in the world today (Kuratko and Hodgetts, 2008:130). All new machinery and equipment are a result of innovation and entrepreneurship. There is intensive capacity building in society and therefore processes and procedures are transforming day by day. Innovation increases quantity of economic output and the goods and services produced are of better quality. Developing countries adopting innovation are sure to bring about changes in the structure of their economy. Such countries can make efforts in improving the already existing products before they venture into creation of entirely new products. The entrepreneurs in these countries should strive to be more innovative so that the economy develops at a faster pace. In addition, these countries should ensure that their innovations conform to demand in the region, as these are more profitable. They should establish policies that govern all types of innovation. Policies should also provide for protection of copyrights to minimize duplication (Morris, Kuratko, and Covin, 2010:155). For economic development to occur, entrepreneurs must adopt a culture of creativity and the art of problem solving. Creativity is the potential to bring into existence a new idea. Entrepreneurs should therefore be creative enough to create innovations. Organizations should encourage all employees to adopt creativity. Entrepreneurs should learn the art of problem solving. There are many challenges in business and learning how to handle critical issues is essential. Analysis of a problem is the first step in problem solving, to establish the cause. One should then identify the possible options that can be potential solutions to the problem at hand. The analysis should consider both positive and negative implications of the possible options. An entrepreneur should implement the option that has implications that are more positive. Entrepreneurship and innovation are necessary for the economic development of any society. All developing nations should adopt these two, so that they can compete effectively in the emerging markets. Individuals venturing into entrepreneurship should plan strategically. Creativity should be encouraged in all organizations. Entrepreneurs should be dedicated to achieve their goals and should remain pragmatic in their ventures. Innovations are driving all sectors in the world today, and developing countries should work hard to catch up with the rest of the world. The market trends are very competitive and all entrepreneurs should adopt innovation. Innovation will help them produce new, unique products and services. The developed world achieved its success through innovation and the third world countries should emulate their example. All entrepreneurs should also learn the art of problem solving to enable them overcome the challenges they encounter. Bibliography Audretsch, D. 2006, Entrepreneurship, innovation and economic growth. Kansas: Cengage Learning. Kuratko, D. and Hodgetts, R. 2008, Entrepreneurship: Theory, Process, and Practice. Kansas: Cengage Learning. Morris, M., Kuratko, D. and Covin, J. 2010, Corporate Entrepreneurship & Innovation. Kansas: Cengage Learning. Szirmai, A., Wim, N., and Goedhuys, M. 2011, Entrepreneurship, Innovation, and Economic Development. Oxford: Oxford University Press. Terrence, E. and Ulijn, J., 2004, Innovation, entrepreneurship and culture: the interaction between technology, progress and economic growth. New York: Edward Elgar Publishing. Wennekers, S., Stel, A., and Carree, M., 2010, The Relationship Between Entrepreneurship and Economic Development: Is it U-shaped? Hanover: Now Publishers Inc. Read More