The Relationship between Entrepreneuship, Innocation and Economic Essay

The Relationship between Entrepreneuship, Innocation and Economic Development - Essay ExampleA variety of theories and form _or_ system of government approaches have been advanced with Keynesian influenced stimulus packages being infused into Western economies with varying degrees of success. Still, a growing consistence of support has turned to the potentials of sparing development occurring through entrepreneurship and innovation. Theorists such(prenominal) as Joseph Schumpeter argue that entrepreneurship and innovation are core elements for sparing development, and subsequent city and state governments have oftentimes-established incubators and given increased funding to tally that innovation is supported. This essay examines the kind between entrepreneurship, innovation and economic development. The essay also considers the role creativity and problem solving play in this relationship, with reference to both theory and examples from the profession world. Analysis When ex amining the relationship between entrepreneurship, innovation, and economic development perhaps the most groundbreaking theorist has been Joseph Schumpeter. While Schumpeters insights into economic development span a wide array of understandings, there are a number of specific considerations that are relevant for this specific mode of investigation. One of Schumpeters most important notions is that of creative death. ... Individuals such as Alan Greenspan have noted that this process underlines economic development. He notes, Capitalism expands wealth in the beginning through creative destructionthe process by which the cash flow from obsolescent, low-return capital is invested in high-return, fashionable technologies (Greenspan 2002). There are a number of specific means by which entrepreneurship and innovation carries out such creative destruction. In his text Theory of Economic Development Schumpeter argued that entrepreneurship didnt simply create impertinently industries, but also resulted in the combination of past industries (Schumpeter 1982). One example of this is that the development of the steam locomotive engine combined with carriage development techniques to form the automobile. The development of the automobile then drastically shifts previously held economic and social structural elements, reenergizing the economy and contributing to economic development. While Schumpeters theories have received a degree of criticism that remain prominent and highly relevant in the contemporary world environment. In large part, Schumpeters understanding of entrepreneurship and innovation as contributing to economic development has been echoed through endogenetic growth theory. This perspective contends that a nations economic growth occurs through internal sooner than external factors. In this context of understanding its clear how Schumpeters theory on entrepreneurship is foursquare rooted within the endogenous means of growth. While entrepreneurship i s popularly viewed in terms of inventions and small business owners, in further examining its impact on economic development one must consider the to a greater extent abstract notion of innovation