Entrepreneurship, Innovation, Economic Development and Sustainability - Essay Example

Entrepreneurship, innovation, economic development, and sustainability Entrepreneurship, innovation, and economic development are all interrelated toeach other. Entrepreneurship spreads with innovation. When too many people enter the market to do the same kind of business, the market gets saturated and there remains little scope for the entrepreneurs to make profit. While this has always been the trend, people in the present age have become even more specific about the element of innovation in the new products and services. This is evident from the popularity of Apple Inc. in the masses all over the world since Apple Inc. is known for innovation. A vast majority of the entrepreneurs in the present age not only tend to develop innovative things, but also search for innovative ways of entering the business. The Internet has facilitated people in this surge, and the Internet is utilized as a tool to achieve innovation and explore the business world. A lot of brick and mortar businesses have also transformed into online businesses. Such companies include but are not limited to Amazon, and Barnes and Noble. The facility of 24/7 connectivity provided by the Internet has increased the innovative business opportunities for the people infinitely. Entrepreneurship and economic development are interrelated quite closely. Both of them have a cause and effect relationship with each other that runs both ways. This means that entrepreneurship causes economic development and also economic development causes entrepreneurship. There exist a lot of examples of countries that have developed economically with the spread of entrepreneurship in them. For example, the UAE has long been a financial and business hub. Before the growth of the UAE as a business hub, the UAE was very weak economically. Over the past four to five decades, entrepreneurship increased in the UAE and so did the economic development. “The solution [of a country’s economic challenges] lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges” (Porter and Kramer, 2011). Economic development of the UAE is quite evident from a lot of factors that include but are not limited to the development of artificial islands, construction of the world’s first seven star hotel i.e. Burj-Al-Arab, and Burj Khalifa that even supersedes the hotel. By the end of 2008, the world in general and the UAE in particular were hit by the global financial crisis. As a result of the economic downturn, entrepreneurs rapidly started drawing their money out of the UAE, particularly Dubai. This further aggravated the condition and increased the economic challenges for the UAE. The sale of innovative products in the present age amounts to 33 per cent of the total sales of a company (Cooper, 2001, p. 4). While so many people talk about innovation, there are not many who understand what it means truly. For many people, anything that is new in some way is innovative. “[C]reativity is commonly defined through the recognition of produced and valued novelty” (Martin, 2009). Innovation is in many cases, a reinvention of old things by combining their features in a unique way. Basically, innovation happens from ideas that are unique. The idea of one individual might never have been experienced by another and thus when it is incorporated into a new product, it becomes innovative (Boden, 2004, p. 13). Many studies aimed at identifying common personality traits in creative people have successfully identified some (Amabile, 1996, p. 5). Irrespective of what qualifies as innovation, a factor whose importance cannot be overemphasized for the economic development as well as sustainability is the usefulness of the product for the society at large. “Attempts must be made to address the potential unintended and unforeseen consequences of the technology, as well as its potential benefits, if it is to be successfully applied” (Hall and Martin, 2005). “…creation is a continuous process but certain regularities that are foundational to our continuing existence must be maintained and renewed” (Bohm, 2012, p. x). Nestle and Coca-Cola are two corporations that have found the CEO Water Mendate jointly although the two corporations hardly ever collaborate on any matter. The reason they did this was that the corporations realized the extreme acuteness of the issue of water in the contemporary age in many countries where they intend to establish their businesses in and grow. “They’ve had a wakeup that if there isn’t a more integrative management of watershed in the world, their license to operate and grow as a business is ultimately going to be at great risk” (Senge, 2009). Many business entrepreneurs think of sustainability and the need to adopt environment friendly business practices as a burden whereas in reality environmental-friendliness not only cuts down the costs of business but also increases its profitability, which is what makes sustainability integrally related to both entrepreneurship and innovation (Nidumolu, Prahalad, and Rangaswami, 2009, p. 1). There are many ways in which businesses can be made sustainable and yet more profitable along with cost reduction e.g. lean manufacturing. Lean manufacturing is a technique of manufacturing in which just the right amount of the product is manufactured as demanded by the consumers and the product is manufactured right when it is needed. This not only reduces the waste and all the costs associated with it, but also takes the workers’ efficiency to the optimal level. In the near future, the tendency of companies to achieve competitive advantage would largely depend upon their readiness for sustainability. Companies around the world have started to realize the positive effects of sustainability on entrepreneurship and innovation. That is why, “[i]n the industrialized nations, more and more companies are “going green” as they realize that they can reduce pollution and increase profits simultaneously” (Hart, 1997, p. 67). Sustainability is quite as strongly linked with economic development as it is linked to entrepreneurship and innovation, and the logic behind it is quite understandable and simple; the lesser the costs and the higher the profits in business, the greater the contribution of the entrepreneurs in the gross domestic product of the country, and the more the economic development consequentially. In addition to this, sustainability saves the country’s resources that can be utilized in better ways to yield more money for the people e.g. through trade and export. Reference List Amabile, T. M., 1996. Creativity in Context: Update to the Social Psychology of Creativity, Oxford: Westview Press. Boden, M.A., 2004. The Creative Mind: Myths and Mechanisms. 2nd ed. London: Routledge. Bohm, D., 2012. On Creativity. London: Routledge. Casson, M., 1982. The Entrepreneur: An Economic Theory. Oxford, UK: Edward Elgar Publishing Limited. Cooper, R.G., 2001. Winning at New Products: Accelerating the Process from Ideas to Launch. Basic Books. Hall, J.K. and Martin, M.J.C., 2005. Disruptive Technologies, Stakeholders and the Innovation Value-added Chain: a framework for evaluating radical technology development. Journal of R and D Management, 35 (3), pp.273–284. Hart, S., 1997. Beyond Greening: Strategies for a Sustainable World. Harvard Business Review. [online] Available at: http://www.stuartlhart.com/sites/stuartlhart.com/files/Beyond%20Greening%20PDF_0.pdf [Accessed 10 November 2012]. Martin, L., 2009. Critical Realism and Creativity: a challenge to the hegemony of psychological conceptions. Journal of Critical Realism, 8 (3). Nidumolu, R., Prahalad, C.K. and Rangaswami, M.R., 2009. Why sustainability is now the key driver of innovation. Harvard Business Review. [online] Available at: https://www.acteonline.org/uploadedFiles/Why%20Sustainability%20Is%20Now%20the%20Key%20Driver%20of%20Innovation%20Harvard%20Review.pdf [Accessed 10 November 2012]. Porter, M. and Kramer, M., 2011. Creating Shared Value. Harvard Business Review. [online] Available at: http://hbr.org/2011/01/the-big-idea-creating-shared-value [Accessed 10 November 2012]. Senge, P., 2009. Sustainability: Not What You Think It Is. MIT Sloan Management Review. [online] Available at: http://sloanreview.mit.edu/feature/sustainability-its-not-what-you-think-it-is/ [Accessed 10 November 2012]. Read More