The Nexus between Entrepreneurship and Innovation - Essay Example

Name: Date: Institution: ТHЕ NЕХUS BЕTWЕЕN ЕNTRЕРRЕNЕURSHIР АND INNОVАTIОN Entrepreneurship and innovation are related. This paper, will explain how the two are interrelated and how they go hand in hand. It will also explain how innovation is related to other fields that are crucial to entrepreneurs. This paper will also indicate the connection between sustainable entrepreneurship and sustainable development. In the current society, sustainable development and entrepreneurship are of great significance. Investors should be creative enough to ensure that there is sustainable entrepreneurship. With the sustainable entrepreneurship, sustainable development will be a guarantee in the economy (Acs, & Audretsch, 2005). Competition is a healthy factor in the growth of any business or enterprise. If the investors and other entrepreneurs become innovative, then competition in the market emerges and it is a key pillar in the achievement of sustainable development. By definition, innovation can be described as the process of commercializing the forward-looking ideas into the achievement of better or improved services, products, or a process of enhanced values. It can as be described as the application of one’s creativity to come up with a unique solution to an existing problem. In other words, it is an invention in the technological field that allows parts to do what they would not have done in previously (Morris, Kuratko, & Covin, 2010). The term innovation is interchangeably used with the term creativity, which can be defined as the ability to imagine new ideas and which are unique from the existing ideas and the ability to interconnect the new ideas to the unrelated things. Entrepreneurs should be in a position to apply these two ideas in the businesses for them to be in a position to; nurture, liberate, and also to inspire all available creative capital within their organization. This will make the entrepreneurs achieve one of their key objectives; profit maximization. According to Windrum, & Koch, (2008) there is a direct relationship between entrepreneurship and innovation. This can be explained by considering the following dimensions of an entrepreneur; risk-taking, autonomy, and pro-activeness. All of these dimensions are related innovations and quality performance. Innovation has a positive contribution to both small and large enterprises. The level of innovation in any business plays a major role in the determination of the price level, and also serves as a key feature of strategy implication for quality performance and entrepreneurship sustainability. Entrepreneurs aim to maximize the market shares. They target highest profit level and therefore their products should be better and different from those of their competitors. They should, therefore, offer better services to their consumers which are preferable in relation to those of their competitors (Sharma, & Chrisman, 2007). For this reason, entrepreneurs should be creative for the success of their businesses. Since entrepreneurs are risk takers, some problems may arise within the enterprise. In case the problem is not well solved the business is likely to incur a heavy loss. To solve the problem in order to find a lasting solution, creativity is required and thus the entrepreneurs should we innovative on how to overcome the challenge. Since entrepreneurship is the application of the innovative ideas into action, entrepreneurs will always be in a position to grasp profitable opportunities in the market and build enterprises which will propel the innovative ideas thus making a lot of money in return (Ireland, Kuratko, & Morris, 2006). The other relationship between innovation and entrepreneur is that; entrepreneurship will come as a result of innovation. This can be explained by the fact that innovation occurs due to changes in; economic changes, new market, a change in technology, new knowledge in the market among other factors. Innovators will be enticed by new changes to think of new products, new market processes, and new services. The organizations will also be influenced to apply the new skills, market processes, and services for them to be competitive and strong in relation to their competitors (Goodale, et al. 2011). Innovation in entrepreneurship has a number of advantages; to start with, through innovation one is able to identify his products from those of the rival entrepreneurs. In order for the consumers to consider your business, it is required that the services you offer be more valuable and competitive in relation to that of the competitors. Secondly, as an entrepreneur, when you come up with a brand that meets the desires of your customers, you will have won their loyalty (Hayton, 2005). The rivals will be playing a catch up in order to meet the set standards you have set in order to compete with your commodities. As other companies work hard to catch up with you will be planning your next move. Your business will be in a position to maintain the best reputation. The other significance of innovation is that the entrepreneurs are in a position to identify opportunities for evolutionary innovation. This can be achieved if the entrepreneurs are in a position to engage with their customers and find out their view on the quality of your products and where they wish an improvement can be done. In the process of setting up a business, entrepreneurs and innovators must have realized a challenge within the society and they decide to come up with a solution to the challenge (Stevenson, & Jarillo, 2007). Entrepreneurs, therefore, grab the opportunity and through innovation they try to make the lives of the people better off. Innovation by manufacturers is also important in that they should have more products produced at a lower cost as they maintain their quality. The enterprises will hold innovation as a part of its organization. This is because it will contribute to the achievement of the enterprise. Entrepreneurs always have multiple solutions to any challenge that will rise in the economy. They will never settle when they only have a single solution until they come up with a number of the solutions. Companies will have their workers trained to gain more skills. Training the employees will contribute to the generation of new ideas which will, in turn, lead to high financial gains to the business (Dess, & Lumpkin, 2005). Clients will always have their demands changing. In order to meet their needs service industries have to expand with a new service that will meet the demand of their customers. Producers, on the other hand, will be required to develop a new product making that their customers achieve the desired utility. Innovation requires some cost. In order to commercialize the new ideas to start generating income or the companies to enjoy a profit some cost have to be incurred. The entrepreneur will for that reason create financial gains giving sense to innovation (Yiu, Lau,& Bruton, 2007). Successful entrepreneurs embrace innovation. This is because, as technology changes, there is an invention. The inventions of new technology will lead to a revolution in the economic sectors. The business will have to respond to the changes for them to suit the competitive market. The response of the entrepreneurs to the new changes explains an entrepreneur as an individual who is characterized by innovative behavior (Kelley, Peters, & O'Connor, 2009). They will put in place strategic managerial skills and practices so that the businesses grow and earn more income. Widening of market shares by the businesses is achievable when the entrepreneurs are able to recognize gaps in the market, identify business opportunities and through risk taking the entrepreneurs tries to venture new businesses in the market with the aim of getting more returns. Since entrepreneurs are both creative and innovative, they are able to assess the market condition and decide on whether to introduce new products, ideas, in the market or to adapt the existing products to secure market opportunities. A number of entrepreneurs are said to possess the following qualities; first, they have tolerance for stress. Since they engage in heavy risks as they make their investments decisions, entrepreneurs are likely to face a lot of stressful challenges. The tolerance to these huge uncertainties could be as a result of their innovative characteristics. Secondly, they are open-minded, being open minded implies that they can respond quickly to any change in the economy (Yiu, & Lau, 2008). The entrepreneurs have no powers to prevent fellow entrepreneurs from undertaking any economic action which is beneficial to his enterprise, for this reason, entrepreneurs should be creative on how to respond quickly to the changes in the market in order to remain competitive and strong. Thirdly, they have the desire to grow. An entrepreneurial activity has its starting point in the innovation. After the entrepreneurs commercialize the innovated ideas they now want their businesses to grow to secure higher market shares (Lassen, Gertsen, & Riis, 2006). For this reason, therefore, innovation is required throughout the business life. Creativity just as innovation in any company it is very important. Through creativity, companies re able produce high-quality products which are of high demand to the consumers. They are also able to manage their tasks and improve staff performance. It is through creativity that the company will foster an aspirational and likable company image. As a result of the company being in a position to foster a likable image, most of the consumers a will be attracted into consuming their products. Therefore, it is very important that each company portray its inner culture to the consumers in an attractive way. Companies need to be flexible and be in a position to update itself with the changing technology. It is through creativity that the companies will be in a position to identify ways in which the new technology will be applied in order to boost the performance of the company (Kellermanns, & Eddleston, 2006). Entrepreneurs are job creators; due to their creativity and innovative nature, they encourage their employee to be creative too. If the company support the creative ideas of their employees then, they are likely to enjoy a high level of output as a result of the interesting ideas by their workers. In entrepreneurship, creativity and innovation are important aspects in the workplace. First, developing the two aspects will improve the performance in the business, and it is a wise decision to allow the two happen within the business set up. Secondly, the employees are given a favorable working environment; where they are allowed to work even outside the office. A creativity-friendly office should be encouraged in a business setup where every individual is highly appreciated. Employees should be given the freedom of discovering new and constructive ideas which will enable an enterprise to meet its strategic plans. In addition, it is easy to embrace teamwork, since every team member has constructive ideas coming up together and implementation of these ideas would have a positive impact on the entrepreneurial activity. As a team, you can share accountability, be in a position to respond to market responses and to reward good work as a motivation to the workers. Lastly, with innovation and creativity, the business is able to use its culture to capture every idea from all the stakeholders (Chen, Zhu, & Anquan, 2005). The ideas can be collected from the staff’s suggestion box, and the office allocates creative time where the ideas are shared. The entrepreneurial boss should, therefore, create a close rapport with the workers and should be ready to listen and welcome ideas that are resourceful for the growth of the business. In summary, there is a positive relationship between entrepreneurship and innovation as well as creativity. An entrepreneurial activity starts from innovation (Turró, Urbano, & Peris-Ortiz, 2014). For a business to be successful and to be competitive enough in the market it requires that the investors be creative enough and identify any profitable opportunity that may arise in the market. Through creativity and innovation, enterprises will come up with solutions to the problems that occur in the society. These solutions are dynamic; they will keep adjusting as the demands of the client's change. Teamwork in any business will yield positive impact to the company in terms of market share and financial gains. This is as a result of appreciating the ideological contribution of all the stakeholders including the boss and his/her employees. Creativity and innovation go hand in hand and these two terms are used interchangeably. Creativity in business ensures production of high-quality products which are competitive enough in the market. If the products are competitive enough then the forces of demand and supply will set the price level of the commodity (Hull, & Rothenberg, 2008). In conclusion, innovation is different from invention. Invention implies coming up with a new idea that has never been in existence. This is what contributes to technological change. On the other hand, innovation implies turning ideas into practical, or commercialization of the ideas. Most of the successful entrepreneurs are innovative and creative. Through their creativity, they are able to come up with a number of solutions to the problems that arise in the society. Entrepreneurs are risk takers, for them to overcome the stress associated with uncertainties will depend on their creativity and innovation. To ensure that there is the sustainability of entrepreneurship; innovation should be adopted as part of any organization. This is to ensure that the company keeps updated to the latest level of technology, and the company should always be flexible to change according to the demands of the consumers. Employees also have a major role to play in the growth of any enterprise. They should, therefore, be given freedom to explore new ideas which would help the company to acquire a large market share. The secret to the maximization of a firm’s product is by ensuring that there is differentiability of the products (Hull & Rothenberg, 2008). If your products are valuable and unique in relation to those of the competitors then the consumers will be attracted to your products and services. The business performance will greatly depend on, creativity and innovation. If the entrepreneurs are creative enough, then they will always be in a position to discover new business opportunities, identify the problems in the economy and try to find a number of solutions to the problem. In any office set-up, the creativity-friendly environment should be created. This will ensure that there is an open chance for ideological contribution among all stakeholders with an aim of maximizing profit and enlarging the market shares. Sustainable development is also a key target of entrepreneurship. For entrepreneurs to ensure that there is a sustainable development, they should be creative to ensure that they meet the needs of the consumers in the present generation without compromising the ability of the future generation to meet their needs (Kearney, Hisrich, & Roche, 2008). The paper has clearly outlined how innovation and entrepreneurship are interrelated. The paper has also outlined the various qualities of an entrepreneur, which include; tolerance to stress, open-minded, flexible and creative. Every entrepreneur is entitled to, nurture, liberate, and to inspire the available creative capital within their organization. References Acs, Z.J. and Audretsch, D.B., 2005. 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