The paper "The Role of Entrepreneurship and Innovation in the Growth of an Economy " is a good example of business coursework. The role of entrepreneurship and innovation in the growth of an economy is extremely evident such that entrepreneurship and innovation are now being recognised as the major economic drivers. The history of entrepreneurship and innovation dates back to the Industrial Revolution era. Indeed, entrepreneurship and innovation are profoundly considered as the primary driver behind the Industrial Revolution (Aundretsch, Keilbach & Lehmann 2006). People wanted to speed up the production process by changing the way things were done.
There were major changes in practically every field including Agriculture (for example the emergence of Agricultural Machinery), manufacturing (a prominent ancient entrepreneur/innovator was Henry Ford) and clothing among others. Since then, people have ever been in search of enhanced speed, efficiency and effectiveness; consequently, there ever new ways of doing things. While entrepreneurship and innovation are clearly unending processes, scholars have continuously in search for more understanding of the concepts of entrepreneurship and innovation. In the effort to contribute to the search for answers in these two concepts, this paper applies alternate theories, concepts and tools to outline the key elements of contemporary entrepreneurship and innovation as they apply to the development of the individual characteristics associated with effective entrepreneurs. Entrepreneurship and Innovation Explained This section defines and explains the two key terms to be used in the rest of the paper.
Entrepreneurs are defined as people who have a desire to change the way things are done. They are quick to note unmet needs, identify opportunities and then take the necessary actions to exploit the opportunity.
Bessant and Tidd define entrepreneurs as people who have the motive power that enables them to come up with ideas and then turn ideas into realities (2015). Innovation, on the other hand, is identified as a tool for entrepreneurship. While innovation is driven by entrepreneurship, it is a crucial part of innovation. Bessant and Tidd define innovation as “ a process that can be organised and managed” (2015: 12). Examples of innovation is a new way of growing crops which reduces production costs, a new service which satisfies some unmet needs and a new way of marketing and selling products and services, which increases sales at reduced expenses.
In short, innovation is change, which is a core part of entrepreneurship because entrepreneurship is about changing the way things are done, of course for the better. Innovation and entrepreneurship are processes with clearly identifiable steps. The four key steps include opportunity recognition; getting the required resources; idea development; and capturing the value (Bessant & Tidd 2015). This is clearly shown in the process model shown in figure 1. Figure 1: Entrepreneurship process model showing the various steps through the entrepreneurship process (Bessant & Tidd 2015) The recognition of the opportunity is the first and fundamental aspect of entrepreneurship.
Successful entrepreneurs are people who are able to recognise opportunities fast before others do. There are numerous sources of opportunities, some of which might be so invisible such that only entrepreneurs are able to recognise them. Some of the sources of opportunities include unmet market needs, dissatisfaction with current conditions, changes in regulations and laws, and action by a competitor or a desire to make things better.
As Niammuad, Napompech and Suwanmaneepong (2014) note, effective entrepreneurs know very well that the market is ever dynamic; as such, they keep on looking for new opportunities to exploit despite how small some of them maybe and then take necessary steps to exploits identified opportunities before competitors do so (Niammuad, Napompech & Suwanmaneepong 2014). Chukwujioke, Benapugha and Oriarewo (2013) also note that effective entrepreneurs are constant learners. Learning and consequent constant identification of opportunities makes the entrepreneurship process a continuous process as shown in the improved process model in figure 2
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