Discuss the Relationship Between Entrepreneurship, Innovation and Economic Development. What Role Do Creativity and Problem Solving Play in This Relationship? Refer to Both Theory and Examples from the Business World to Support Your Discussion.’

2396 Words Nov 21st, 2012 10 Pages
Discuss the relationship between entrepreneurship, innovation and economic development. What role do creativity and problem solving play in this relationship? Refer to both theory and examples from the business world to support your discussion.’

There are many links that bring together a relationship between entrepreneurship, innovation and economic development, and both creativity and problem solving play a large role within this relationship. Entrepreneurial activity can lead to innovation within a market for a product or service, which can therefore lead to increased economic development. Within this report I will attempt to analyse this relationship and create further links.

The definition of an entrepreneur and entrepreneurship
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Creativity is necessary for this gradual change, for example, within the MP3 player market (MPEG, 2008) since introduced in 1998, there have been small modifications to the product, leading to large profits for many firms, therefore generating economic development. The world's first MP3 player was released by SaeHan Information Systems in 1998 and was called the MPMan F10 (Hardware, 2008). Since then developments to the MP3 player have taken place, such as: improved aesthetics, larger memory, different sizes and more features, i.e. the Creative Zen X-Fi MP3 Player (Creative, 2010). These gradual changes may reflect market research and customer demand, as they seek the features most important to the consumer and it is also an easier form of change for firms as they are altering an existing product rather than another form of innovation,’ discrete change’. These gradual changes can be seen as creativity and a form of innovation, and as they are able to generate more revenue and produce new goods, economic development.

Schumpeter’s other form of change is ‘discrete change’. Here, rather than gradual alterations to a product, an entirely new product, which “cannot be traced back to the previous gradual version” (Entrepreneurship from Creativity to Innovation, 2007, p.14), is created. In this situation there are links to what Harvey

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