Discuss the relationship between entrepreneurship, innovation and economic development. What role do creativity and problem solving play in this relationship?
Entrepreneurship, innovation and economic development are three hot topics in current society. Governments all over the world pay a close attention to entrepreneurship and innovation and formulate policies to increase the quantity of entrepreneurs and innovators (OECD, 1998). Because the governments hypothesize the entrepreneurship is related to economic development (OECD, 1998). Moreover, when people mention entrepreneurship, innovation is probably on the range of talking. So, what is the relationship between entrepreneurship and innovation? Do these really have positive effect on economic development? Besides, according to the Cypher and Dietz (2004), economic development not only limited in economic growth but also can be represented in many aspects such as the increase in national and personal income, the decrease in inequality figures, changes which enable population's quality of life improved, structure of demand for goods, and the changes in consumption habits and so on. This essay will try to explain the positive effect entrepreneurship and innovation bring to economic development especially for the three former aspects and mention the reason why creative and solving problem are essential in this relationship.
This paragraph will focus on the definition of entrepreneurship and innovation and relationship between entrepreneurship, innovation, creative and solving problem. Generally, entrepreneurship is a difficult word to define and different researchers have different opinion. Based on Shane and Ventakaraman (2000) entrepreneurship is the characteristic of people who can discover and exploit opportunities. In addition, the definition of innovation on Oxford Handbook of Innovation (Fagerberg, Mowery, Nelson 2005) is a process of converting practice into inventions. More specifically, it...