Entrepreneurship and Innovation

Recently, the issue of entrepreneurship and innovation has attached great importance, especially after the economic crisis in 2009. With the tendency of globalization and the development of technology, it seems sensible to state that entrepreneurs with commendable innovation will be the bellwethers in the next decade and foster a country's economy, especially for developed and rapidly developing countries including Ireland and China (Naudé et al., 2011). Global Entrepreneurship Monitor (2010) reported that around 250 million people have been engaged in start-up businesses by the end of 2010 and the number was predicted to be growing. The tremendous amount not absolutely equals to rapid development of economy. Thus, the accurate comprehension of the connection between entrepreneurship, innovation and economic growth becomes increasingly significant. This essay focuses on the relationship between entrepreneurship, innovation and economic development respectively. In the next section, the bidirectional relationship between innovation and entrepreneurship will be discussed integrating with creativity and problem solving. Then, the third and the fourth paragraph will demonstrate how economic growth related with innovation in both negative and positive aspects. Finally, in the fifth paragraph, the issues about economic development and entrepreneurship will be coped with.

Innovation and Entrepreneurship

The relationship between innovation and entrepreneurship can be bidirectional: innovation is an important catalyst in the process of entrepreneurship and the successful entrepreneurial activities in return encourage the development and commercialization of innovation. Innovation contributes significantly to the initial stages of entrepreneurial activities (Drucker, 1985). Entrepreneurship can be defined as a dynamic process which primarily aims at commercial success by means of initiative thinking, timely perception of opportunity and effective combination of resources under great risks (Couger et al., 1990; Hisrich et al., 2010). It involves recognition of social needs and requires ultimate responsibility to commercialize it. However, between perception of opportunity and products, there are several mid steps, which construct the "product-evolution process" and involve the participation of innovation (Hisrich et al., 2010:24). Innovation includes two aspects: firstly present creative ideas with existing knowledge and resources, and then successfully implement them in commercial utilization (Stamm, 2008). The first aspect of innovation is the process of creativity, which is an essential building block of innovation (Ibid.). Problem solving plays a significant role in the relationship between innovation and entrepreneurship on the ground that they share the same problem solving process (Kirkham, 2009). There are three phrases in the process of problem solving: definition of opportunities, discovery