Entrepreneurship and innovation - Essay Example

Initially, innovation was a preserve of large organisations, which invested in improving their R&D capabilities. However, in the modern business environment, individuals are leaving the corporate world to start their own businesses. As a result, venturing into business as an individual requires an emphasis on innovation to gain advantage in a competitive business environment. On the same note, innovation for an entrepreneur requires the ability to generate new ideas that are unique in the marketplace (Crumpton, 2012).

In addition, innovation requires entrepreneurs to prepare adequately for the unexpected changes in the business environment. Conversely, entrepreneurship has challenges and requires a well-thought plan by prospective entrepreneurs prior to venturing into a particular business (Crumpton, 2012). This paper examines the key elements of contemporary entrepreneurship and innovation as they apply to the development of individual characteristics associated with effective entrepreneurs. In the modern business environment, entrepreneurship is a challenging venture for individuals who want to start a business with the aim of making profits.

The business environment is competitive and entrepreneurs compete for the same market with large organisations that capitalise on economies of scales. In this regard, the individual characteristics of an entrepreneur are critical for survival in a competitive business environment. The modern business environment is dynamic because of technological advancement. In this sense, the development of effective entrepreneurs requires adaptation to such changes in order to remain competitive in the marketplace.

Entrepreneurs often start small and as such, venturing into business has many risks compared to large organisations with sufficient start up capital (Johnson, 2001). Further, entrepreneur’s main challenge in setting up a business is the start-up capital and most entrepreneurs experience failures with their