A brief discussion of the relationship between entrepreneurship, innovation and economic development as well as the role of sustainability in the relationship
Introduction: The origin and development on theory
As early as the 17th century, the French term "entreprendre "appeared in economics, which evolved into "entrepreneur" as commonly used (Dees,1998). The concept of entrepreneur keeps on developing and varies with the development of socio-economics. Richard Cantillon published his in 1775 “Essay on the Nature of Trade in General" (Murphy,1986). Since then, entrepreneurship was given a definition in the perspective of behavior, including decision-making, sound judgment, supervision of ...view middle of the document...
According to Solow's study, the inputs of capital and labor enhance the economic growth in aspects of quality, quantity and productivity. It is widely accepted that innovation as the core of entrepreneurship propels the economic development.
A controversial topic remained is the intrinsic incentives of innovation. The scarcity of resource necessitates the entrepreneurs to invest into D&R for innovation so as to improve the efficiency of productivity. Barbie et al (2004) believe the optimum choice for economy is reducing the utility of resource with independent innovation. The increased unceasingly rate of resource suggests entrepreneurs consider the sustainability as the incentive to innovation. By virtue of the idea of sustainability entrepreneurial innovation decreases input, thus costs reduce and the margin profit expands. This approach indicates sustainability is the incentive to entrepreneurial innovation which eventually contributes to economic development. This essay will discuss the interlaced relationship between entrepreneurship, innovation and economic development and then explain the significant role of sustainability in promoting the three economic factors by referring theory and business evidence.
Dynamic reflection linking innovation and entrepreneurship
Dynamic reflection, the inherent essence of entrepreneurs, has determined as dependent on each other as lips and teeth, close relationship in intricately woven together between entrepreneurship and innovation. Peter Drucker, the founder of modern business corporation, was deeply influenced by Schumpeterian theory. Drucker (1998) defines the entrepreneurship as the practice of innovation. This definition suggests an entrepreneur necessarily is an innovator. The core implication of innovation is the purposeful change by systematic analysis in economic and social opportunity (Drucker, 1998). This innovative change herein is regarded as an enrichment of current understanding based on analytical thinking. Different descriptions of entrepreneurship and innovation, however, were given by economists when diverse studies were carrying on. Entrepreneurship is the regarded as an innovative pursuit of opportunity by utilizing limited resource (Jarillo, 1989). Knudson and William (2004), in addition, emphasize the importance of application of superior information for innovation in entrepreneurship when they concerning the market opportunity before innovation. The three statements of entrepreneurship all implicate that the entrepreneurial innovation is made through the process of information analysis. This process requires a comprehensive understanding of current resources and subjective evaluation from self-reflection. Boyd and Fales (1983) conclude that reflective learning resolves the contradictory information to remove inner discomfort and be open to new information. It is the reflection on conflict-resolving, resource-synthesizing and dynamic-analysing, that founds the basement of...