Entrepreneurship, Innovation and Economic Development

Entrepreneurship, Innovation and Economic k directlyledge Discuss the relationship between entrepreneurship, knowledgeableness and frugal phylogenesis. What role do creativeness and conundrum settlement play in this relationship? In todays world, entrepreneurship and conception argon becoming increasingly signifi beart as drivers of the economy, especi each(prenominal)y so in the developing economies where trade plays a major part in generating revenue. In China, sm e truly-and medium-sized enterprises (SMEs) account for almost 70 part of all Chinese exports, a parting that reflects the above statement ab bring out the magnificence of entrepreneurship to stinting robustness.Some questions whitethorn be brocaded on whether entrepreneurship lead to frugal development or is the latter a necessary to facilitate the entrepreneurship and innovation carry throughes instead. This essay , plot of land recognizing the need of certain(a) institutions and framework to be in pl ace and military operation healthful in order to ease the functioning of business identification numberivities, takes the concentrate that entrepreneurship and innovation leads to economic development more than often than of the some other way around.Realising its potential, authoritiess initiatives construct largely been centred on encouraging more entrepreneurs to leave up a venture or to hit the roof their bringive businesses. In the 2013 National Budget, the Malayan Government has allocated a fund of RM 1 billion under the SME Development organisation (News Straits Times 2012). This very government has to a fault recently launched SME Masterplan (2012 2020). These initiatives ar aimed at supporting and accelerating the ontogeny and development of SME-s crosswise all sectors of the economy.In paygrade though, more start-ups and modernisticfound business ventures in an economy does non necessarily translate into economic produce and improvement. In order for the desired economic aims to be achieved, we need to ensure that the start-ups and brisk businesses thrive and non fail, for doomed enterprises more often than not suck resources out of the economy. This essay ordain identify how businesses, wasting disease groundbreaking practices and creativity in both(prenominal) business operations as come up as in business solving, so-and-so achieve greater cognitive process and sustainability in order to positively contribute to economic development.Jospeh Schumpeter defines entrepreneurs as innovators who implement entrepreneurial remove within grocery stores (Ahamad, 2008). This substructure be in the sense of introduction of a new or improved nearly, introduction of a new method of produceion or business management process, and the exerciseation of a new source of summate. In short, entrepreneurship is the act of identifying commercialize opportunities and using innovative approaches to exploit them (Ahamad, 2008). bus iness concern opportunities are like buses, in that respects always another unity coming (McAshan, 2011).Such are the words Richard Branson has practice to describe the ample opportunities available for entrepreneurs to gain on. An entrepreneur tail assembly any start a venture by either involving themselves in a established grocery with certainty of demand for the goods asideered, or they foot exploit a new mart altogether, by identifying a market respite and work on fulfilling the needs of that certain segment. By undertaking the former, entrepreneurs face a large and possibly increasing pot of competitors. This market, as described in the disk mettlesome marine Strategy, is the Red Ocean.In contrast, entrepreneurs who venture into an untapped market space, center onsing on demand creation, pack illimitable potential to grow profitably (Chan & Mauborgne, 2005). The moreover way to beat the competition is to taking into custody trying to beat the competition. Entrepreneurs should focus on undertaking the pry innovation dodge proposed in the Blue Ocean Strategy. By creating a leap in value for buyers, a venture can exculpated up new and uncontested market space, this makes competition irrelevant (Chan & Mauborgne, 2005).To be successful, entrepreneurs give need to undertake innovative processes in creating the crossway or service as so to distinguish themselves from the tolerate of the existing options in the market. In other words, the product or services offered must stand out, have relevance and good purpose, and provides a high value add to consumers. It must provide the wow effect to the masses, which impart in turn capture assistance and help rake in revenues. withal product and service innovation, innovation withal can be implemented in improving the business management process.For pattern, all this while, organizations are shaped in the top-down organizational structure. Innovative entrepreneurs might have a different p reference on running the firm, and choose to have a flatcarter structure, defying the norm. This can rake in benefits as in a flat structure, creativity and feedback are encouraged, there is more empowerment of young people by the executives, leading to a more wanton and vibrant organization. This go out provide horrendous esults in terms of business performance especially in todays solid paced business world, which requires enterprises to be energetic and quick to adapt to changes (Griffin, 1999). alike innovating and introducing a good and impressive product, an enterprise should overly aim to develop strengths in ternary areas to gain an advantage over the rest of the field. Edges such as fantastic supply chain organisation which is due to good contacts and fast(a) relationships with suppliers is a crucial compute in determining how easily a business does.Toyota for instance, are famed for their fish Production System, which is a key federal agent contributing to t heir status as market leader in the automobile industry. Besides that, the ability to develop strong stain loyalty with customers by establishing a last of responsiveness to them is also another example of what an enterprise can focus on doing. It is easy to knock off an innovative product, but an innovative business system is hard to replicate (Bhide, 1996).Businesses should thus focus on enhancing creativity, building strong networks, utilize engine room available to enhance performance, drum effective strategies to be incorporated in the business process, aim to build good reputation among consumers by providing consistent and h whizzst service and also, be ever-ready to act quickly, on both opportunities as puff up as issues that will arise every now and then (Bhide, 1994). When faced with a problem, how fast and how well an entrepreneur responds to it will have a telling effect on the business performance.It can potentially act as a morale booster dose if dealt well, and have adverse effects if not. Spardlin (2012) suggests that a large number of enterprises are scarce not rigorous in shaping the problems they are attempting to solve. The Creative Problem resoluteness Process Model suggest the use of an explorers lookout, as well as a detective mindset when it comes to defining problems. This is so as to touch the problem, also identifying the opportunities and future-oriented aspects twisty (Lumsdaine, 2009). When you ask the expert questions, chances are youll be able to fishing gear the right problems well.InnoCentive, an innovation-foc utilize problem solving consulting agency, has devised a four-step process for firms, to be employ in defining problems and later solving them (Spardlin, 2012). This process has four main focuses. First, it aims to help users turn up the need for the solution, and state what the desired burden is. Next, it articulates the strategic enormousness of the solution to the firm. Then, it looks into the metho ds that may have already been used, recognize the constraints involved and lastly a clear and contend problem statement is produced (Spardlin, 2012).This multi-steps process is big to rally the organisation around a pctd understanding of the situation, its magnitude and sum of resources needed to be devoted to the fudge factor of the issue. More often than not, firms allocate opposed level of resources to solving problems faced too fewer resources are allocated to high-stakes ones and excess resources are devoted to tackling wrongly defined problems or low priority ones (Spardlin, 2012). After problem definition, idea generation and evaluation follows.Using the artist, technologist and judge mindsets, organisations are encouraged to cause solutions through a creative, innovative and critical process (Lumsdaine, 2009). This process works well in brainstorming groups. As ideas are being suggested, chances are a shaping build-on will occur. Ideas will then be synthesized, a nd the best solution(s) will then be picked. The Pugh Method can be used in tandem with the idea evaluation process Concepts are compared in an advantage-disadvantage matrix.It can be used to compare the few available ideas in hand, choosing the best one ultimately, and it can also be used to benchmark against an existing concept in the market (Lumsdaine, 2009). With this, entrepreneurs can now be assured of a well-thought idea for their products or services or even when it comes to solving issues. The capital punishment of ideas, or the execution is a pivotal area of focus for entrepreneurs. achievement is as equally important as the idea itself. Entrepreneurship is not just all about being creative and inventing or innovating good products and services.A good idea without elaborated and precise implementation will not help a business spend a penny its potential. Furthermore, an innovative new product or service may do very well when introduced, but its popularity will also att ract new companies who will re-create and try to capture a share of the market. Thus the importance of laying strong foundations and fundamentals in terms of implementation must be stressed on by entrepreneurs. Aspiring entrepreneurs should realise the importance of working on establishing the business tarnish name as well as using creativity in make barriers that will deter imitators.This is especially crucial if their innovation of products are easily copied. This can be done by thrifty planning, acquisition and management of the necessary resources. Clearly, innovation, problem solving and creativity are all connected and play important roles in driving entrepreneurship. A society will be much better off with better products and services, as well as having the luxury of a wider range of product choices to choose from. Entrepreneurship will indefinitely sticker economic development in a country.As mentioned above, enterprises contribute to the exports of a country, so in this aspect a country will record better balance of payments performances. Also, as consumers now have better spirit goods produced locally, the dependency on imported goods can be reduced, and internal growth is spurred with increase consumption in the economy. exitly, as firms board on the innovation drive, more technology usage will mean enthronization activities are bound to increase, contributing to the dour run health of the economy. In short, innovation in entrepreneurship is important for economic development.Efforts to uphold these practices should be undertaken by all parties, including the government. References Ahmad, N. and R. G. Seymour (2008), formation Entrepreneurial Activity Definitions Supporting Frameworks for information Collection, OECD Statistics Working Papers, 2008/01, OECD Publishing. Bhide, A. (1994). How Entrepreneurs Craft Strategies That Work. Harvard Business Review. Bhide, A. (1996). The Questions Every Entrepreneurs Must Answer. Harvard Business Review. Chan K. W. & Mauborgne R. (2005), Blue Ocean Strategy How to Create contest Market Space and Make controversy Irrelevant Harvard Business Press. Finfacts. (2007).Chinese SMEs boost exports and growth More created in past 20 years than total number of SMEs in Europe and US combined. Available http//www. finfacts. com/irelandbusinessnews/ divulge/article_1010697. shtml. Last accessed 20th November 2012. Griffin, D. (1999). Benefits in a Flat Organizational Structure. Available http//smallbusiness. chron. com/benefits-flat-organizational-structure-281. html. Last accessed 30th of November. Lumsdaine, E . , Binks, M . (2009). Entrepreneurship from creativeness to Innovation. Nottingham, University of Nottingham Institute for Enterprise and Innovation McAshan, T. (2011). 50 Great Entrepreneurial