Entrepreneurship, Innovation and Economic Development

Entrepreneurship, Innovation and Economic Development Discuss the relationship between entrepreneurship, psychiatric hospital and sparing phylogenesis. What role do creativeness and problem solving play in this relationship? In todays world, entrepreneurship and cornerst wizard ar becoming increasingly crucial as drivers of the economy, especially so in the moderniseing economies where trade plays a major part in generating revenue. In China, small-and medium-sized enterprises (SMEs) account for almost 70 percent of all Chinese exports, a shargon that reflects the above statement about the grandness of entrepreneurship to economic robustness.Some questions may be raised on whether entrepreneurship lead to economic victimization or is the latter a prerequisite to facilitate the entrepreneurship and variation processes instead. This shew , while recognizing the need of certain institutions and frame engage to be in bit and functioning soundly in order to ease the function ing of billet performanceivities, takes the stand that entrepreneurship and innovation leads to economic development more oft than of the former(a) way around.Realising its potence, judicatures initiatives own largely been centred on encouraging more entrepreneurs to give-up the ghost up a venture or to expand their alive transactiones. In the 2013 National Budget, the Malaysian Goernment has allocated a fund of RM 1 zillion under the SME Development Scheme (News Straits Times 2012). This very government has in addition recently launched SME Masterplan (2012 2020). These initiatives are aimed at supporting and accelerating the exploitation and development of SME-s across all sectors of the economy.In valuation though, more lean 1-ups and tonic traffic ventures in an economy does not necessarily translate into economic growth and improvement. In order for the desired economic aims to be achieved, we need to ensure that the start-ups and existing businesses thrive and not fail, for doomed enterprises more often than not engross resources out of the economy. This essay go out identify how businesses, using innovative practices and creative thinking in both business operations as well as in problem solving, asshole achieve greater performance and sustainability in order to positively contribute to economic development.Jospeh Schumpeter defines entrepreneurs as innovators who implement entrepreneurial change within markets (Ahamad, 2008). This after part be in the sense of grounding of a new or improved dandy, introduction of a new method of crossingion or business management process, and the exploitation of a new source of supply. In short, entrepreneurship is the act of identifying market opportunities and using innovative approaches to exploit them (Ahamad, 2008). Business opportunities are like b drops, theres constantly another one coming (McAshan, 2011).Such are the words Richard Branson has used to call the ample opportunities ava ilable for entrepreneurs to capitalize on. An entrepreneur can either start a venture by either involving themselves in a establish market with certainty of demand for the levelheadeds offered, or they can exploit a new market altogether, by identifying a market niche and work on fulfilling the needs of that certain segment. By undertaking the former, entrepreneurs face a large and possibly increasing pool of competitors. This market, as described in the book Blue Ocean Strategy, is the Red Ocean.In contrast, entrepreneurs who venture into an untapped market space, focusing on demand creation, have unlimited potential to grow profitably (Chan & Mauborgne, 2005). The only way to beat the competition is to preventive trying to beat the competition. Entrepreneurs should focus on undertaking the value innovation strategy proposed in the Blue Ocean Strategy. By creating a leap in value for buyers, a venture can open up new and uncontested market space, this makes competition irrelev ant (Chan & Mauborgne, 2005).To be successful, entrepreneurs pull up stakes need to undertake innovative processes in creating the product or aid as so to distinguish themselves from the rest of the existing options in the market. In other words, the product or operates offered essential stand out, have relevance and good purpose, and stomachs a high value add to consumers. It must provide the wow effect to the masses, which go out in turn mesmerize attention and befriend rake in revenues. Besides product and service innovation, innovation also can be implemented in recrudesce the business management process.For example, all this while, organizations are shaped in the top-down organizational structure. Innovative entrepreneurs might have a different resource on live onning the firm, and choose to have a flatter 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 b y the executives, leading to a more open and vibrant organization. This will provide amazing esults in terms of business performance especially in todays fast paced business world, which requires enterprises to be nimble and busy to adapt to changes (Griffin, 1999). Besides innovating and introducing a good and impressive product, an enterprise should also aim to develop strengths in multiple areas to gain an advantage over the rest of the field. Edges such as fantastic supply chain system which is due to good contacts and strong relationships with suppliers is a crucial factor in determining how well a business does.Toyota for instance, are famed for their inclination of an orbit Production System, which is a key factor contributing to their status as market leader in the automobile industry. Besides that, the ability to develop strong brand loyalty with customers by establishing a culture 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, twist strong networks, utilize technology available to enhance performance, devise rough-and-ready strategies to be incorporated in the business process, aim to build good reputation among consumers by providing consistent and reliable service and also, be ever-ready to act quickly, on both opportunities as well as issues that will rise every directly and thus (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 esprit de corps booster if dealt well, and have adverse effects if not. Spardlin (2012) suggests that a large make sense of enterprises are simply not rigorous in defining the problems they are attempting to solve. The Creative Problem Solving Process Model suggest the use of a n explorers mindset, as well as a detective mindset when it comes to defining problems. This is so as to pinpoint the problem, also identifying the opportunities and future-oriented aspects gnarled (Lumsdaine, 2009). When you ask the safe questions, chances are youll be able to tackle the right problems well.InnoCentive, an innovation-focused problem solving consulting agency, has devised a four-step process for firms, to be used in defining problems and later solving them (Spardlin, 2012). This process has four main focuses. First, it aims to wait on users pinpoint the need for the solution, and state what the desired outcome is. Next, it articulates the strategic importance of the solution to the firm. Then, it looks into the methods that may have already been used, recognize the constraints involved and in conclusion a clear and complete problem statement is produced (Spardlin, 2012).This multi-steps process is all-important(prenominal) to rally the organisation around a sh ared understanding of the situation, its magnitude and amount of resources needed to be devoted to the rectification of the issue. More often than not, firms allocate inappropriate 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, engineer and judge mindsets, organisations are encouraged to generate solutions through a creative, innovative and evaluative 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, and the best solution(s) will then be picked. The Pugh Method can be used in in tandem with the idea evaluation process Concepts are compared in an advantage-disadvantage matrix.It can be used to compare the few av ailable ideas in hand, choosing the best one ultimately, and it can also be used to benchmark against an existing opinion 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 effectuation of ideas, or the execution is a pivotal area of focus for entrepreneurs. performance is as equally important as the idea itself. Entrepreneurship is not hardly all about being creative and inventing or innovating good products and services.A good idea without sleepless and precise implementation will not help a business reach its potential. Furthermore, an innovative new product or service may do very well when introduced, but its popularity will also attract new companies who will imitate and try to pose a share of the market. Thus the importance of laying strong foundations and rudiments in terms of implementation must be stressed on by entrepreneurs. Aspiring entrepre neurs should realise the importance of working on establishing the business brand name as well as using creativity in erecting barriers that will deter imitators.This is especially crucial if their innovation of products are easily copied. This can be done by careful 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 spur 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 quality goods produced locally, the dependency on imported goods can be reduced, and internal growth is spurred with increased c onsumption in the economy. Lastly, as firms embark on the innovation drive, more technology usage will mean investment activities are bound to increase, contributing to the long run health of the economy. In short, innovation in entrepreneurship is important for economic development.Efforts to sanction these practices should be undertaken by all parties, including the government. References Ahmad, N. and R. G. Seymour (2008), Defining Entrepreneurial Activity Definitions support Frameworks for Data Collection, OECD Statistics Working Papers, 2008/01, OECD Publishing. Bhide, A. (1994). 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