Role of Entrepreneurship and Innovation Essay Example for Free

Role of Entrepreneurship and Innovation EssayThey have apply existing means of proceeds differently, more appropriately, more adventurously. They have carried out new combinations. They are entrepreneurs Joseph Schumpeter (Lumsdaine and Binks, 2007). Entrepreneurship is a procedure through which individuals advert opportunities ( lines that need to be solved or unmet needs) in the merchandise place, onlyocate resources, initiate change by being innovative and creative and create value through solutions.One of the Factors of Production to produce goods or services is Enterprise with Land, Labour and Capital an entrepreneur combines all other factors of returnion by enterprise, which is in truth caper solving, risk taking and creativity, to come up with innovative products or services. Innovation is the ability to get hold change as an opportunity not a threat. (Steve Jobs,2010). It is not necessary that Innovation is something solely new which is stated as Discrete ch annelise by Joseph Schumpeter, it tidy sum likewise be a Gradual Change, that is a product or service which is bettor than what was there before (Lumsdaine and Binks, 2007).It potful be called a process by which an Idea or invention is translated into a product or service for which sight will pay and perceive it as being new. Entrepreneurship is incomplete without Innovation as Steve Jobs said, Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth. . (Steve Jobs,2010). Economic education discharge be defined as the suppuration of stinting wealth for the well being of a countrys inhabitants.It implies progressive changes in the socio- sparing structure of an economy, change in the distribution pattern of income, credence of new technologies, creation of jobs, transition from agro-based to industry-based economy and general improvements in subsisting standards. According to Lumsdaine and Binks,In the ba ckground of entrepreneurship, it is creativity that leads to Innovation, that is instruction of new products and processes which when innovated replace the traditional and previous versions. creativeness leads to a greater fulfilment on an individual basis as we use our imagination to create our new horizons for what we do in our bangs.By imagining what we could be and achieve, we move beyond the boundaries we have previously set for ourselves. Innovation can be seen as practical application of creativity in an organization. (Lumsdaine and Binks, 2007) So Innovation is actually the product of Creativity and Problem Solving with the help of Entrepreneurship. Entrepreneurs are the catalysts that spur the economy with their innovations and technological change Joseph Schumpeter (Lumsdaine and Binks, 2007). Entrepreneurship leads to Economic Change and economical development through creative destruction.When the Entrepreneurs sell their Idea, the Idea is a solution to a puzzle an d is a need that has not been met before which means there was a gap in the mart for that product or service which he innovated, consumers buy it because there is a demand for it which the entrepreneur recognize and innovated it and as more and more consumers buy it, more will be the improvement in animateness Standards of the inhabitants of the Economy in conclusion, entrepreneurs showing their creativity solve a problem and innovate a product or service which benefits the economic development of an economy directly and indirectly.Wal-Mart Stores is a relevant example for apprehension the relationship betwixt Entrepreneurship, Innovation and Economic Development, the company which is ranked no. 18 in the Forbes advert of Global 2000 Leading Companies 2011. Samuel Moore Walton is one of the most successful entrepreneurs who made it mathematical in less than fractional a century. He founded the Company in 1962 when he opened the companys basic deduction interject in Rogers, Arkansas, USA after watching a market gap of Discount stores in his State of Arkansas.He just figured out a problem that people in the urban areas have to pay higher prices at stores in the city center since the country office is remote away for the consumers to go there and the stores used to take an advantage of that and charge higher prices. Sam Walton imagined exploitation his creativity, what if there is a discount store in the city which buys everything in bulk from the country side and uses its own transport for delivery of good to the store, would the consumers buy from there at lower prices rather than expiry to other stores in the city with higher prices.He just used his creativity to solve the problem and Innovated worlds first and most successful Discount Store, Wal-Mart. Sam Walton, in his autobiography, said, If you think somewhat it from the point of view of the customer, you want everything a wide assortment of quality merchandise the lowest possible prices gua ranteed satisfaction friendly, knowledgeable service convenient hours and a pleasant shopping experience. You love it when a store exceeds your expectations, and you hate it when a store inconveniences you, gives you a hard time, or pretends youre invisible. (2011).When he opened his first Wal-Mart store, no one imagined he was introducing a retailing formula that inside a generation would collision the lives of cardinals of people. Wal-Mart Stores grew gradually but at a good pace and then reached to the position it has achieved today. In 1975, it employed only 7500 employees, 125 stores with gross revenue of $340 billion. In 1983, The Forbes Magazine ranked it no. 1 General retailer for the eighth year straight. In 1991, Wal-mart became an external supermarket chain with more than 1200 stores and more than 200,000 employees.Wal-Mart launched Sams clubs which was alike a success and reached 1995 stores, 239 supercentres, 433 Sams Clubs and 276 international stores with 675,000 e mployees by the end of 1995. By 1997, Wal-Mart Stores had entered into another man of the world, which is China and was taking Environmental friendly measures and also became the largest close employer in the US with 680,000 employees and additional 115,000 international employees serving 90 million customers per week worldwide.By the end of the 1990s, Wal-Mart had opened stores in Korea and Germany and had become the largest private employer of the World with total of 1,140,000 employees. By 2004, Wal-Mart had been declared as the third most admirable company in the US by Fortune Magazine, ranked among the companies with Top 25 Diversity Recruitment Programs and was awarded the Corporate patriotism Award.In 2005, The Wal-Mart Foundation started working much actively and donated $18 million for US hurricane simpleness efforts and the Company employed more than 1. million employees and owned 3800 Stores in the US and 3800 International Stores with Annual Sales of $312. 4 billion and existed in 16 countries. Today, Wal-Mart Stores owns 9826 stores in 28 countries with 2. 1 million employees and serves more than 176 million customers annually. Walmart Foundation now is too active and donates largely in relief efforts and for causes it has separate programs for different palm like Health, Disable people and Education (Wal-mart Stores, 2011).Sam Walton said it best, If we work together, well lower the cost of living for everyonewell give the world an opportunity to see what its like to save and have a better life. (2011). This was the innovation mainly in his Idea of Discount Stores to save peoples money, to help them live better was the goal that Sam Walton envisioned when he opened the doors to the first Walmart (2011). If his vision was to help people live better which means improving their living standards, then there is no doubt that how muchWal-Mart would have contributed towards positive economic development just because of Sam Waltons entrepreneurship and Innovation. A company that employs 2. 1 million people cannot be questioned for its section towards economic development. Since it generated a lot of employment opportunities the economy was benefited in the form of expenditure on goods and services by the employees moreover, all the employees working there earn a salary from Wal-Mart and then spend it on goods and services in their own economies.Expenditures like education and wellness increase the demand of goods and services in the economy leading to economic growth. This has lead to increase in the economys PPF outwards as A. D of the economy has increased. On the basis of the figures provided in the 2010s Annual Report of Wal-Mart Stores and the World Banks statistics of the USs GDP of the year 2010, Wal-Mart Stores had contributed near 2. 8 percent to the Annual GDP of the US in 2010. (Yahoo Finance and World Bank, 2011).This Calculation can be supported by the Statistics provided by the website of Wall-Mart Stores, tha t in 2010, Wal-Marts sales were $307. billion in U. S. retail sales as thenext five largest U. S. retailers combinedsales of $324. 5 billion Kroger ($78. 3 billion), stain ($65. 8 billion), Walgreen ($61. 2 billion), Home Depot ($60. 1 billion) and Costco ($58. 9 billion). In 2005, almost half (46%) of Americans lived within 5 miles of a Walmart or Sams Club, and 88% lived within 15 miles of a Walmart of Sams Club which also shows the contribution of Wal-Mart towards U. S. s economy and in 2011, every $45 dollars fatigued in the U. S. economy, almost $1 was spent on a purchase at a Walmart. (Wal-mart Stores, 2011).Therefore, the presence of Wal-mart in the US economy generated income not only for the employees but for the economy as a whole. Among all of the great scholars of entrepreneurship, Joseph Schumpeter is the only one who has explained justly the relationship between Entrepreneurship, Innovation and Economic Development. According to Lumsdaine and Binks (2007), The cruci al contribution made by Joseph Schumpeter in The theory of Economic Development (ref. 2. 1) was to highlight the entrepreneurs role as the catalyst for economic development. This contribution connects entrepreneurship, creativity and economic development.To down the stairsstand the actual and potential impact of entrepreneurship, it is important to consider his analysis. Schumpeter pictured any economy as a collection of enterprises and employment where each represented a bad-tempered combination of production factors in the form of machines, people, land, premises, finance, and so on, in some sense every business relied for its market upon the successful activities of all others.This interdependence through customer demand meant that changes in the nature or level of economic activity would be caused only when a new combination of factors of production was introduced. The divers(a) operations of Walmart did not only benefit the US but has also contributed to economic developmen t of infra- create and meaty countries of Africa. According to Brown and Sander (2007), large multinational supermarket chains are rapidly expanding in developed and developing economies. These supermarket chains tend to import agriculture products from developing and under-developed economies this is due to the advantage developing and under developed countries offer them in quality and prices. Which in a way is good for the development of the under developed and developing countries.According to Brown and Sander (2007), In the continent of Africa, where small farmers account for some(prenominal) 90 per cent of agricultural production and 73 per cent of Africas rural poor, access to semiprecious international markets could play a crucial role in wider poverty reduction, most multinational Supermarket chains buy Fruits and Vegetables from small holder farmers of Sub-Saharan Africa which also increases exports of these poor countries yielding in higher economic development of their country by improvement in their living standards.According to Stokk (2007), Supply chain development initiated by supermarkets can help farmers escape the low productiveness trap. Supermarkets face a short order cost, but gradually benefit from the agricultural skill upgrading in terms of increased market share. Our result suggests that when farmers do not meet the required standards, supermarkets have an incentive to invest in farm help programs that improve the productivity of local suppliers.Supermarket expansion not only affects farmers in the supply chain, but also has consequences for the rest of the food retail sector. Traditional retailers face increased competition and potential loss of market share, but may benefit from foreign supermarkets through spillover effects of the latest retail techniques. (2009).Higher productivity and latest retail techniques do affect the economic development to a great extent. In the said(prenominal) article Stokk said, The value of l ocal purchases made to operate the Wal-Mart stores and facilities such as tilities and business services. The value of goods exchange by local manufacturers to Wal-Mart, The types of Wal-Mart facilities present within the MSA (Metropolitan Statistical Area), while the price effects from retail stores can be significant, other facilities such as distribution centers can also have positive economic impacts. In conclusion, this essay has clearly analysed the relationship between entrepreneurship, innovation and economic development and has also before long explain the role Creativity and Problem Solving play in this relationship.In this relationship between entrepreneurship, innovation and economic development, Innovation is the base, since economic development is influenced by entrepreneurship through Innovation. However, it is not necessary that all entrepreneurs benefit the economic development it can only have a positive implication on economic development if there is innovation . And for innovation to effect the economic development positively with entrepreneurship, the entrepreneur should be creative in problem solving.Creativity is a foundation of this relationship and problem solving is an essential tool for this relationship to come over difficulties and carry on with the flow from entrepreneurship to positive economic development through innovation. However, long term economic development cannot lack of innovation and entrepreneurship, simultaneously, as tools of innovation, creativity and problem solving play a vital role in the whole process. Word Count 1651 quarrel without referencing.