The Role of Entrepreneurship and Innovation in Economic Development

The provided assignment delves into the significance of entrepreneurship and innovation in driving economic growth and development. It cites numerous research papers and studies that emphasize the role of entrepreneurial competencies, venture capital, small businesses, and social entrepreneurship in fostering innovation and economic progress. The assignment also touches upon the digital sectors' contribution to the UK economy, highlighting Britain's status as a hub for start-ups generating substantial revenue.

ENTREPRENEURSH
IP AND SMALL
BUSINESS
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
P1 Types of entrepreneur ventures and its relations with typology.......................................3
P2 Similarities and differences between various entrepreneur ventures................................4
P3 Impact of small and micro on economy ...........................................................................7
PART 2............................................................................................................................................8
P4 Importance of small business and start-ups in economy growth......................................8
P5 Factors make a successful entrepreneur by determining traits or characteristics...........11
Risk and reward of starting a business ................................................................................12
P6 Important aspect of entrepreneurial personality which motivate them and technique of
shaping..................................................................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Entrepreneurship is a process of planning, designing, learning and starting new business.
Basically, number of entrepreneurs are coming with unique ideas for establishing a business in
order to generate maximum return on their investment. However, in current trends various of
entrepreneurial are identified in service sectors, especially in Fashion industry. In fact, UK
people are investing high range of their income in clothing and maintaining wardrobes for coping
up with modern world (Izquierdo, and Deschoolmeester, 2010). Therefore, assignment is going
to highlight various types of entrepreneurs and ventures which are emerging at marketplace with
distinct motives. Along with this, entire assessment has covered innovative ideas, growth,
creativity, opportunity etc. of enterprise in market. Furthermore, impact of starts-ups and small
business on social economy is also discussing in the project for understanding its significant also.
Thus, number of successful entrepreneurs are identified from which major characteristics and
traits of two famous entrepreneurs are going to outlined in this project. Lastly, major role of
background and experiences of a person in their life will frame in an assignment.
PART 1
P1 Types of entrepreneur ventures and its relations with typology
To become an entrepreneur is not an easy task because handling a large or any small
business is full of risk and complexity. Thus, person whomsoever wanted to become a successful
owner needs to consider various facts or figures for running their enterprise in a smooth manner.
It is important to understand what are scope of entrepreneurship, in what way they can maintain
social culture and why it is different from other business operations (Szirmai, Naudé, and
Goedhuys, 2011). With the coming of Brexit, government tend to support small scale business
and start-ups in all over UK so there is an opportunity to prosper and increment in various
ventures across geographical boundaries
Scope and definition of entrepreneurship
Entrepreneurship – It is a way of implementing creative ideas into a business activity
for running a business for long duration by developing it in suitable way. Along with this, owner
is liable for managing an association by organising all the business activities in proper manner.
For instance- make plans or strategies for various risk and uncertainties which are not controlled
3

instantly. This activity involves land, capital, resources, products and labours who contribute in
generating profit for company.
Entrepreneurial Activities – An entrepreneur, it is essential to accomplish varieties of
activities in an organisation including analysing market, demand forecasting, expansion and
setting of new venture, planning and implementing business strategies in business, innovations
etc. An entrepreneur has to perform all these activities effectively so that they can grow and
increase their productivity in business market.
Enterprise- An enterprise can be defined as undertaking a project that is difficult,
complicated and in structured form (Kaplan, and Lerner, 2010). It can also be said an economic
organisation or activity which is used to generate profit and be stable in their business.
Types of entrepreneurship
Lifestyle and growth of entrepreneur – An entrepreneur wishes to grow their business
in different venture, so they must have enjoy an adequate lifestyle and succeeding in attaining
growth by completing all the task in a defined time frame. For growing their business in certain
market, they must understand and analyse customer of that market (Sahut, and Peris-Ortiz,
2014). In order to establish positive image and harmony at marketplace, an entrepreneur needs
to offer valuable products to their desired consumers for gaining their trust or loyalty as well as
aiming to make long term relations with them. As the company is new in market their handwork
must be reflected in their product which will help them to increase their productivity in new
geographical location.
Survival venture:- In this entrepreneur new market added for launching product in new
marketplace for gaining maximum benefits by satisfying needs or demands of clients. In fact, in
a new market entrepreneur is having maximum opportunity to promote product without facing
high level of competition.
Typology of entrepreneurship is a term which means classification on the basis of social
science, types and psychology. Following are described below:-
 Private venture entrepreneurship:- Number of companies are operated under this
category.
 Male:- These organization are run by male businessmen and having control one entire
business.
4

 Female:- Controlled or run by female organization in order to establish their image at
marketplace by gaining maximum benefits.
P2 Similarities and differences between various entrepreneur ventures
Different start- ups and business use different type of management style to manage their
business. Basically, every entrepreneur is having their own motive and reason behind
establishing a specific business. Thus, all the ventures are having major differences and
similarities between them which are described as follows:-
Types of
entrepren
eur
Private Public Social enterprise
Similariti
es
 Profit oriented
 Focussed in
gaining
maximum
attention of
consumers by
satisfying their
needs or
demands.
 Requisite
maximum
amount of money
for initial
investment.
 Profit based.
 They are also
believe in
attracting
consumers.
 Acquire Funds
from governing
bodies for running
their business.
 More profit.
 As per both the types
these venture is also
focussing on end users
because products are
finally consumed by
users.
 Required sufficient
capital.
Differenc
es
 Private
organizations are
totally based on
profit oriented by
grabbing market
opportunities.
 These companies
are focussing on
developing the
society.
 Controlled by
governing bodies.
 These enterprise are
totally based on
serving society with
various necessary
services.
 Believes in uplifting
5

 Regulated by sole
trader,
partnership,
limited and
multinational
organization.
them by providing free
services.
 Fully controlled or
managed by social
entity or some
voluntary groups.
 Funded by trust or any
one.
The founder and owners are responsible for developing their business. Thus, it is
essential to consider suitable measure through which they can run their business e.g. Boohoo is a
start-up company in UK in women clothing with better planning and growth they have able to
setup and increase their business in all over UK.
Entrepreneurship in corporate and public sectors -Entrepreneurial activities are
different in both the sectors
Corporate sector – In corporate sectors an entrepreneur has an approach to increase their
profit and take competitive advantage of corporate world by introducing new and innovative
products. They generally involves in large scale investment and profit-making plans.
Public sector – The business activity majorly involves in a service sectors. It contains
both public and private sector through which local public can take advantages. For example,
Anite deals in Information and technology, it provides many IT solution customers.
Role and characteristics and micro, small scale industries
Roles – Small scale industries is a part of economy which are related to manufacturing of
goods. It is an important part of economy as it contributes largely on economic growth of
country. They are important for country because it provides many items and services at a cheaper
rate.
Characteristics of small scale business -
 Labour intensive
 Less requirement of capital
 Fast manufacturing of products
 Less import of raw material
6

 Proper structure
 More productive
 Equal distribution of wealth
 Better organisational culture
Social enterprise
A social entrepreneurship implements their commercial strategies in their business to
increase their finance, environmental and social beings. The company dealing in social business
want to increase their business and productivity by increasing goodwill, maintaining ethical
values, moral values etc. Adopting social form in business activities helps a company to have
better organisational culture and maintain and expand their business in an effectual way. For
example, they can use group discussion activities in business activity which will increase
coordination between employees and generate some innovative ideas for their business.
P3 Impact of small and micro on economy
It is important to classify market before understanding their impact
Difference between, micro, small medium and large-scale organisation
Micro – It is about creating business in a smaller region. The overall cost of business is
very less, and profit is dynamic. It is maintained by an individual or a small group of people.
Micro industry is basically focus on creating services and products for a smaller region e.g. Ice
cream parlour, cheese shops etc.
Small business – It is a business activity which includes small number of workers
working for them. These business activities do not have high manufacturing units and high
volume of sales. In technical terms they can be defined as small independently owned company
where growth and profit are solely dependent on their gains and profits. It can be classified into
various parts such as; sole proprietorship, partnerships and corporations. In recent times small
scale businesses have evolved in restaurant, law. Engineering, food items and architectural
works. Small industry may vary in terms of revenue collection, regulation authority and sizes.
Medium size industry – A medium size industry may contain people ranging from 200-
300. These enterprises have emerged in market in very steadily and slowly. The have as different
strategy of growth. As they earn revenue form market keep some of it amount for development
of their tangible and intangible resources like building, inventory, workforce management and
services.
7

Large scale organisation – They are very big firms who have business strategy to
expand their business, increase manufacturing of their products and earn large revenue. For an
entrepreneur it is not possible to setup a large business as it need huge number of financial bases,
which include high risk and uncertainty.
PART 2
P4 Importance of small business and start-ups in economy growth
There are different types of small firms which contribute in national economy (Tapsell,
2012 ). Some firms work in only one area and some have international presences
Differences between domestic and internationalist entrepreneurship
Domestic International
 They do business in local market
 Requisite minimum funding in business
activity.
 Less workforces are required
 There innovative ideas are limited to a
 The business activities are performed in
international market
 They need more funds.
 They have expanded to different
8
Illustration 1: The wider economy

small geographical boundary
 They have low level of risk and
uncertainty in their business activities.
countries
 Risk and uncertainty are very large
Types of small firms
Firms are categories based on their leadership
Diverse types of forms
 Sole Proprietorship – In these one people is responsible for business. All the factors like
profit, loss, risk and uncertainty only affect the owner.
 Partnership – This type of venture is having 2 or more than two partners who
contributes and share every prospect of their business (Chatterji, 2012).
These type of small business activities are mostly followed by entrepreneur in starting new
ventures (Finkle, 2012).
(Source:- Britain home to 1.2m start-ups generating £196bn for UK economy, 2014)
Factors considered in entrepreneurial business activities
9
Illustration 2: Britain home to 1.2m start-ups generating £196bn for UK economy

Small businesses weather operating in domestic or international market must have to
observe certain elements which must be considered in business before making planning about
their growth in international market. Some of the elements are being mentioned below-
 Size – Different small-scale organisation has varied sizes so before planning further size
of an organisation matters. For example, an Ice cream parlour and a software start-up
have deterrent approach in prosper in business market (Galindo, 2012).
 Turnover – Turnover matters as it helps in increasing financial base of company. More
financially strong organisation will have strong business policies, planning and
approaches.
(Source:- The digital sectors - making the UK the best place to start and grow a digital
business, 2014)
10
Illustration 3: The digital sectors - making the UK the best place to start and grow a
digital business

 Profit – Small firms makes profit with their innovative ideas in their business. A firm
will make more profit is their idea is recognisable and accepted in business marker
(Śledzik, 2013).
 Rate of growth – The rate of growth determines the value and potential of that company
in business market. It about how much they have extended in business market
 Innovation – No company can grow successfully without an innovative idea in their
business policy. Without innovation they cannot compete in their business activities
 Sustainability – Every organisation wants to sustain in market with their innovative
product. For sustaining for long time is a challenge.
 Adaptability – For an entrepreneur it is important to adapt the market as soon as possible
otherwise they will falter in business activity.
International aspect of business -
Globalisation is all about expanding business across the international marketplace for
gaining competitive advantage by fulfilling the consumer needs or demands. Basically, most of
the companies or new start-ups are involving in expansion process for generating maximum
revenue. By this process, national income of a nation is also maximizing because new strat-ups
are maximizing the job opportunities, economy development, offer creative items and so on. As
a result, international aspects is highly indispensable for growth of social economy as it helps in
enhancing the current status of a country.
P5 Factors make a successful entrepreneur by determining traits or characteristics
There are many elements that can make impact on the starting of business as well as
growth. Therefore, some factors are identified which are playing crucial role while establishing a
new venture at marketplace. They are detailed such as:
Creativity- A venture is generally started with innovative thought and idea. Hence it is
important to present creative concept for building any business.
Finance- A business is completely based on the power of funds that how much an owner
have for investing in certain occupation.
Employment- For starting any business they needs to have a team which helps in leading
the business towards success (Audretsch, 2012). Having employees form local area helps in
reducing the cost as well as generate employment in domestic level.
11

Convenience- At the time of starting any venture, an owner needs to taking about their
customers therefore they should choose that location of business which is convenience to their
buyers that consumers are not needs to travel more. Basically, setting up business on a place
where gathering of buyers are higher.
Competition- It is prominently depending on the sort of business which is going to
setting up. Hence local competition is always there that needs to overlook. New business is
majorly get affected by the competition.
Risk and reward of starting a business
Risk in starting a business
 Start-up may not exist for longer time – Some start-ups are under- capitalised they may
not exist for linger time interval
 Not to successful – If more modified and innovative is launched in market than older one
may parish
 Hand holding – The single person is responsible for all activities so they have to handle
every prospect.
 Not so experienced vendor – The vendors may find it difficult to understand and to sell.
Potential reward of business
Mark Zuckerberg and Henry Ford are one of the most successful businessmen at
international marketplace due to their talent and effective characteristic. Thus, some of the major
or useful traits and characteristic of both the successful entrepreneur are described as follows:-
 Convince consumers:- First or foremost potentiality is that both the players are know
how to convince others with their outstanding power or communicating skills. Along
with this, express things in more detail format in order to highlight various benefits of
their products.
 Personality:- They are having marvellous personality by having different light or spark
on entrepreneurs.
 Ability to take risk :- According to this element it has been analysed that it is not easy to
manage a large company by having its branches across the market. In fact number of
risky situation might occurred such as; changes in consumer taste, trends, fluctuation
currency rate and so on. Therefore all these factors are consider as most serious risk
12

which is not easy to handle by any individual. But these successful entrepreneur are
having ability to take risk.
 Increase in brand value:- They have the capability of enhancing their brand value by
taking corrective measures and steps.
P6 Important aspect of entrepreneurial personality which motivate them and technique of
shaping
To study the environment of entrepreneurship it is important to understand different
assert and mindset of entrepreneur
Characteristics and mindset of entrepreneurs
There are different characteristics of entrepreneurs which helps them to generate
maximum revenue by satisfying consumer needs or demands.
Innovative ideas for their business activities
 Curiosity – Entrepreneurs must have curious approach to think about innovative ideas
 Commitment – They are committed towards works in order to tackle different
challenges in their innovative ideas (Sahut, 2012).
 Optimism – After having so many failures entrepreneur have buoyant attitude.
 Flexibility- Entrepreneurship is a challenging area so an entrepreneur must be able to
sustain again unexpected problem and demand
 Ownership – The entrepreneur must have a strong control of their business and must
address their business activity in business arena.
Skills of entrepreneur -
An entrepreneur must possess certain skills to increase their entrepreneurial skills.
 Resiliency – It is the ability of entrepreneur to recover quickly form a situation.
 Focus- They must not lose focus from the target in any condition.
 Plan and invest for long term – Entrepreneur must exact their innovative ideas flourish
in market for a longer period.
 Managing people – It is a skill about managing people inside and outside the
organisation. The manage net will increase bonding between them in their business
activity.
 Selling- Entrepreneur must know to sell their innovative product at market place.
13

 Learning – Business market is always an innovative curve a manager must know and
understand the dynamic of market as quickly as possible
 Self-reflecting- The hard work must be reflecting in their work which must inspire others
Personal entrepreneurial tendency
Different entrepreneur has different personality trait which they implement in their
business activity. To be a successful businessman a person must have important traits which are
as follows
 Innovative – entrepreneur must develop new ways and creative approach in developing
innovative ideas for their business activity
 Engaged – For success of any innovative idea it must be relevant and new and must fulfil
customers’ expectations, for doing so entrepreneur engage in their business activity
compendiously
 Responsible – The entrepreneur must be responsible in their approach the innovative
ideas should be customer oriented (Kaplan, 2012).
 Consistent – They must be consistent in their approach and never give up in their process
 Replicable – The innovative idea should be reflective. It must not be scalable and limited
growth strategy.
P7 Analysing person Background and past experience hinder or foster
Entrepreneurial ideas come from creativity and innovation ideas in business activity.
Creativity – It is defined as using innovative ideas and imagination for creating
something new. Any entrepreneurial idea is successful if it is having a creative framework and
better implementation of that creation.
Innovation – An innovation can be termed as generation of new ideas for existing market
scenario. An entrepreneur can prosper by understanding innovative ideas. The key point of
innovation to use it to beneficial effects.
Main source which motivate an individual to become an entrepreneur.
There are different sources through which supports in encouraging a person towards
entrepreneurship:-
 Family members – Ideas can be generated with discussion with family members.
 Friend circle – Some friend wishes to have some innovative ideas
14

 Things that prompt – By viewing some business activities in market.
 Interest – People have different areas of interest like technology, food etc.. So they tend
to think innovative ideas for their business activities.
 Travelling – While travelling some new element, ways , need lead to innovative idea in
business.
 Treading – There are many ideas in market which is trending in business. One must
think different ideas of improvement in business structure.
CONCLUSION
This assessment outlines that entrepreneur plays a key role in enhancing national income.
With coming of Brexit in UK small scale business and start-ups have gained support from the
government. An entrepreneur must pose certain qualities and abilities to be success in business
market. To be success in competitive market an entrepreneur must possess some distinct abilities
and features so that they be successful in global market. Throughout the study, it has been
assessed that number of individual are emerging with creative ideas and thoughts for gaining
more or more revenue. Along with this, it is understood that new start-ups are playing crucial
role in developing the social economy by maximizing the employment opportunities at
marketplace. As a result, it aids in developing the living standards of various sections of society
by offering best enhancement opportunities. This assessment has shown some glimpse of
entrepreneur and there is more to explore in future run.
15

REFERENCES
Books and Journals
Audretsch, D .B. and Link, A. N., 2012. Entrepreneurship and innovation: public policy
frameworks. The Journal of Technology Transfer. 37(1). pp.1-17.
Brem, A., 2011. Linking innovation and entrepreneurship–literature overview and introduction
of a process-oriented framework. International Journal of Entrepreneurship and
Innovation Management. 14(1). pp.6-35.
Chatterji, A., Glaeser, E. and Kerr, W., 2014. Clusters of entrepreneurship and innovation.
Innovation Policy and the Economy. 14(1). pp.129-166.
Finkle, T. A., 2012. Corporate entrepreneurship and innovation in Silicon Valley: The case of
Google, Inc. Entrepreneurship Theory and Practice. 36(4). pp.863-884.
Galindo, M .Á. and Méndez, M. T., 2014. Entrepreneurship, economic growth, and innovation:
Are feedback effects at work?. Journal of Business Research. 67(5). pp.825-829.
Hall and et. al. , 2012. Entrepreneurship and innovation at the base of the pyramid: a recipe for
inclusive growth or social exclusion?. Journal of Management Studies. 49(4). pp.785-
812.
Izquierdo, E. and Deschoolmeester, D., 2010. What entrepreneurial competencies should be
emphasized in entrepreneurship and innovation education at the undergraduate level.
Handbook of research in entrepreneurship education. 3. pp.194-206.
Kaplan, S .N. and Lerner, J., 2010. It ain't broke: The past, present, and future of venture capital.
Journal of Applied Corporate Finance. 22(2). pp.36-47.
Sahut, J. M. and Peris-Ortiz, M., 2014. Small business, innovation, and entrepreneurship. Small
Business Economics. 42(4). pp.663-668.
Śledzik, K., 2013. Schumpeter’s view on innovation and entrepreneurship.
Szirmai, A., Naudé, W. and Goedhuys, M. eds., 2011. Entrepreneurship, innovation, and
economic development. Oxford University Press.
Tapsell, P. and Woods, C., 2010. Social entrepreneurship and innovation: Self-organization in an
indigenous context. Entrepreneurship and Regional Development. 22(6). pp.535-556.
Online
What is innovation?. 2017. [Online]. Available through:
<https://www.merriam-webster.com/dictionary/innovation >. [Accessed on 1st
November 2017].
The wider economy, 2017. [Online]. Available
through<https://www.gov.uk/government/publications/uk-digital-strategy/4-the-wider-
economy-helping-every-british-business-become-a-digital-business>.
Britain home to 1.2m start-ups generating £196bn for UK economy, 2014. [Online]. Available
through<https://www.enterprisenation.com/blog/new-report-britain-home-to-1-2m-
start-ups-generating-196bn-for-uk-economy/>. \
The digital sectors - making the UK the best place to start and grow a digital business, 2014.
[Online]. Available through<https://www.gov.uk/government/publications/uk-digital-
strategy/3-the-digital-sectors-making-the-uk-the-best-place-to-start-and-grow-a-digital-
business>.
16

17