The relationship between entrepreneurship, innovation and economic Essay

The relationship between entrepreneurship, innovation and economic development - Essay Example Introduction The 21st century corporate world is characterized by numerous business entities that are based on the suitability in their respective markets. Jones (2006) defines entrepreneurship as a way in which an organization or a person realizes a business opportunity, gathers resources and puts in place effective strategies and plans to launch their idea into making profit. Additionally, the author points out that entrepreneurship also involves detecting gaps in the market and using appropriate strategies to take advantage of the opportunity. Innovation refers to the ability of an organization to develop strategies and practices that would appreciate factors on globalization and technology. Innovation is a practice that recognizes technological advances and the benefits that comes with it to generate business opportunities and develop existing business ideas. In an argument by Jones innovation is an important factor in the corporate world as it is used to effectively put organiza tions is position in line with the current emerging trends in the corporate world. For instance, Cullen & Gordon (2007) cite that the use of social media marketing is an innovation example which most organizations in the modern century have implemented into their systems. With social media marketing a company greatly cuts its marketing costs and reaches out to a greater consumer population. Economic development on the other hand refers to the steps which the financial and economic status has improved in a particular period of time. Economic development is enhanced by the indulgence of more organizations and entrepreneurs in the corporate world. This increases the work input hence enhancing the level at which finances in a particular location is generated. Economic development is also defined by Nanda &Sorenson (2007) as the rate of equity turnover increase in a country. Apart from the factors influenced on the financial status, economic development can also be defined by the rate at which entrepreneurs venture into the corporate world. Entrepreneurial activity and its influence on innovation In an argument by Salgado-Banda (2005) entrepreneurial culture aids in the development of innovation and also promotes the culture. Innovation depends on people or organizations to develop new strategies and plans to venture into the market. On the other hand, entrepreneurship depends on innovation for originality and new market entrance. Jones (2005) argues that innovation significantly shapes the direction of both economic development and entrepreneurship. The greater the population of entrepreneurs the greater the level of innovation would rise in the corporate world. While defining entrepreneurship, Salgado-Banda (2005) points out that the vice is a development of ideas and creation of new market strategies. These are the main components of innovation. Additionally, entrepreneurship promotes competition and the emergence of new business entities in the market. An incre ase on the number of suppliers creates a need for every entity to gain a great competitive advantage. For this to be achieved, new entrances need to develop new and unique ideas to satisfy the demanding consumer market. This strive to gain superiority enhances the level of innovation (Salgado-Banda, 2005).The author further argues that innov