The Role of Innovation and Entrepreneurship in Economic Growth

This report provides a comparative analysis of innovation and entrepreneurship, highlighting their similarities and differences while emphasizing their interconnectedness. It explores how both contribute to social and economic development through technological advancements, job creation, and the introduction of novel solutions to societal problems. The report uses examples to illustrate how innovation, particularly in artificial intelligence and social media, has addressed social needs and fostered economic growth. It also discusses how entrepreneurship leverages innovation to create new businesses, stimulate economies, and provide employment opportunities. Ultimately, the report concludes that both innovation and entrepreneurship are essential drivers of progress, with their success contingent on market demand and effective planning.

INTRODUCTION TO
ENTREPRENEURSHIP
AND INNOVATION

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Contents
INTRODUCTION.................................................................................................................................2
Compare and Contrast between innovation and entrepreneurship.....................................................2
Innovation and Entrepreneurship activity contribution towards social and economic development. .4
Conclusion.........................................................................................................................................5
REFERENCES......................................................................................................................................6

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INTRODUCTION
In all around the world there are several innovations that are going on in various
industries. This is a result of ideas of entrepreneurs (Drucker, 2014). There are many new
SME have come up due to the entrepreneurship qualities that is present in many individuals.
Due to various researches in all the fields there are many innovations that are getting
possible. The entrepreneurs take use of these to solve some of the social problems as well as
utilise them to gain economic benefits (Sahut & Peris-Ortiz, 2014). This report highlights the
similarities and differences between innovation and entrepreneurs. It also discusses about the
activities that contributed to social and economic development in past few years.
Compare and Contrast between innovation and entrepreneurship
Innovation and entrepreneurship are part and parcels of each other. There are many
examples all around the world where entrepreneurial innovation have changed the lives of the
people and made a revolution in the industry (Crumpton, 2012). Many a time’s innovation
has led to a start of new kind of industry. Even after being such a close connection, these two
are extremely different things.
Similarities
 Innovation and Entrepreneurship both leads to foundation of new items that can be
highly beneficial for the society. Some new kind of products gets developed which
helps in solving many of the day to day problems of the society.
 It is often designed as per the need of the market or the people that is present in it.
There are various needs of the society and the innovation and entrepreneurship aims
to remove that from their products.
 Both of these require an extensive amount of research so that their product idea does
not fail. These researches are done based on the need of the people which is
understood by doing market research (Brem, 2011). An Innovative approach is used
for doing research.
 They also require a considerable amount of investment to be done so as to carry out
various operations. Most of the money is required in doing the research like the
market research and availing all the equipment that will be required for doing research
and setting up the inventory for production. Many of the innovations get failed
because they have not done proper research before producing products about the
actual viability of it’s in the market.

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 Both entrepreneurship and Innovation always needs to be planned so as to safeguard it
from getting failed. In the last few decades most of the innovation or entrepreneurial
activities failed due to the reason that they do not have been planned. The idea
without a plan is unable to provide the required benefit (Mitra & Borza, 2011). The
planning must be done about everything from starting of research to the final sale of
the products in the market. It helps in availing maximum benefit from the idea as well
as it also assists in proper utilisation of resources which is always necessary in the
case of company that are making the start. This is due to the reason that they do not
have larger amount of resources in the starting.
 Entrepreneurship and Innovation has to be unique so as to provide maximum of
benefits. It is not always necessary in the case of Entrepreneurship but in the case of
Innovation it is highly essential. Uniqueness in product always provides a greater
possibility for success. This is also due to the reason that there is always a less chance
of facing a competition from other products. It also enhances the chances that some
new problems of daily lives get solved through it.
 Idea behind Innovation and Entrepreneurship has to be protected so as to have
maximum benefit from it. There is always a chance that it can be utilised by someone
else so as to achieve benefits from it (Galindo & Méndez, 2014). In order to reduce
this problem there are many intellectual property rights they can be taken. This
safeguards the rights of people to achieve maximum benefits from the innovation they
have made. There are many examples where people have taken the idea of others for
their entrepreneurship activities.
Dissimilarities
Innovation is implementing your creativity for coming up with the new idea or solution. It is
a something new that has the power to solve what was not possible in previous times.
Progress always depends on the innovation made in the field. More the innovation more is the
chances that company or organisation can get greater benefits and has a higher capability of
making inventor or researcher rich (Ortho Spine News, 2018). On the other hand
entrepreneurship is implementing the innovation so that idea can be given life. It is
sometimes also called as the social innovation. It is always driven by the capability of the
person to do it. It is more of a grasping of opportunity to attain benefits. Entrepreneurship
builds business based on the innovations that has been made. Entrepreneurship always
supports innovations and provides strength for doing more innovation. One of the major

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examples in this regard is Henry Ford who took use of the innovation of most probably Karl
Benz to convert the motor powered engines into car, for his own benefit. This helped Henry
Ford to develop cars that changed the world forever and made him the owner of $200 dollars
property.
Other difference between the two is that innovation is always new while Entrepreneurship
can be copy of some others ideas. There are many examples where the people who even do
not have the original idea got success. For example in the field of IT technology there are
many companies which have achieved success with it.
Basic difference between the two can be understood by the point that innovation means
something new while on the other hand converting that idea or innovation into a business
opportunity is known as entrepreneurship (Nathan & Lee, 2013).
Other big difference between the two is that innovation is never riskier while the
entrepreneurship is always riskier. This can also be understood in the terms that innovation
always has the capability of giving something new it is not vague. It is always capable of
solving some or the other problem while entrepreneurship always gives an extra option to the
people and if they are unable to convince the demand of the market then there is always a
chance that it can fail.
Innovation and Entrepreneurship activity contribution towards social and economic
development
Both innovation and entrepreneurship has the capability of solving social and economic
problems of the society. In order to understand the economic development done by
innovation and entrepreneurship is as follows:
In social regards
The innovation related to the technology especially in terms of artificial intelligence has
helped a lot of people in solving their day to problems (Maclean, Harvey & Gordon, 2013).
For example Artificial intelligence in Medical sciences have helped people who are suffering
from chronic disease in their medication. It has also reduced the number of errors in detecting
and operating a disease. On the other hand the Innovation such as Social media Applications
has united people all around the globe (Keohane, 2013). It became one of the modern
facilitators of world being a global village. It helped in sharing ideas, have interaction and
support each other while being from far off places. Another example in this regard is Tablet

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which does all the functionalities of computer and then also provides mobility to the people.
On the other hand the sale of products through online mediums empowered people to avail
products while sitting at home. This saved a whole lot of time of the people.
In economic regards
Many innovations and entrepreneurship has provided economic benefit to the people and the
country. There are entrepreneurship examples that have come up with a new business which
has added to the financial resources of the country (Szirmai, Naudé & Goedhuys, 2011). It is
also providing jobs to many of the people which are making them financially capable of
leading their lives (Eesley & Miller, 2017). In the last decade there are millions of new
businesses have come up which is improving to the economic condition of the society. On the
other hand the innovations like the social media have given jobs to many people. This
innovation helps to reduce the cost of marketing as the company can reach to larger set of
consumers with the help of very few people. The innovations like multipurpose satellite helps
in saving lot of country’s money as for various purpose a single satellites are now a days
used. Many innovations have helped entrepreneurs in formulating them into the new idea
Conclusion
From the above based report it can be concluded that there are many innovations that are
going on. This also assisted people in coming up with a new idea known as entrepreneurship.
Both innovations and entrepreneurship are connected with each other but still there is a big
difference between the two. Innovation and Entrepreneurship are always driven by the
demand of the market and often fails when it is unable to fulfil the needs of the people. Both
Innovation and Entrepreneurship in the last decade has helped in the development of the
society and the nation. It can be clearly understood with the examples provided.
REFERENCES
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). 6-35.

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Crumpton, M. A. (2012). Innovation and entrepreneurship. The Bottom Line. 25(3). 98-101.
Drucker, P. (2014). Innovation and entrepreneurship. Routledge.
Eesley, C., & Miller, W. (2017). Impact: Stanford University's Economic Impact via
Innovation and Entrepreneurship.
Galindo, M. Á., & Méndez, M. T. (2014). Entrepreneurship, economic growth, and
innovation: Are feedback effects at work?. Journal of Business Research. 67(5). 825-
829.
Keohane, G. L. (2013). Social entrepreneurship for the 21st century: Innovation across the
nonprofit, private, and public sectors. New York: McGraw-Hill.
Maclean, M., Harvey, C., & Gordon, J. (2013). Social innovation, social entrepreneurship and
the practice of contemporary entrepreneurial philanthropy. International Small
Business Journal. 31(7). 747-763.
Mitra, C. S., & Borza, A. (2011). Innovation and entrepreneurship. Managerial Challenges of
the Contemporary Society. Proceedings. 342.
Nathan, M., & Lee, N. (2013). Cultural Diversity, Innovation, and Entrepreneurship: Firm‐
level Evidence from London. Economic Geography. 89(4). 367-394.
Ortho Spine News, 2018. The Difference between Innovation & Entrepreneurship. [Online].
Available at: http://www.orthospinenews.com/2015/07/23/the-difference-between-
innovation-entrepreneurship/ . [Accessed on: 14th February 2018].
Sahut, J. M., & Peris-Ortiz, M. (2014). Small business, innovation, and
entrepreneurship. Small Business Economics. 42(4). 663-668.
Szirmai, A., Naudé, W., & Goedhuys, M. (Eds.). (2011). Entrepreneurship, innovation, and
economic development. Oxford University Press.

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