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Factors That Influence Entrepreneurship

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This essay will attempt to highlight the factors that influence entrepreneurship, innovation and economic development with the aid of theoretical models. It will also state how creativity and problem solving lead to innovation and its links with economic development.
Entrepreneurship has been defined by different theorists over the past few decades. The first ever person who brought the theory of entrepreneurship to life was Richard Cantillon (L’essai sur la nature de commerce en general – Essay on the Nature of Trade in general). His book defined the entrepreneur as a risk-bearer, or anyone who runs a business. Prof E. Lumsdaine & Prof M. Binks bring another view of entrepreneurship whereby, “Entrepreneurs are people with particular characteristics …show more content…

This can be described as creativity. According to the business dictionary creativity is “the mental characteristic that allows a person to think outside the box, resulting in innovative approaches to a particular task.” Creativity can also be defined as “the production of novel and useful ideas” (Amabile et al., 1996, p. 1155), Creativity can be structured or unstructured. In other words, ideas can either be spontaneous (unstructured) or planned (structured), both of these thinking process lead to innovative ideas however structured creativity can yield more incremental innovation whereas unstructured creativity yields radical innovation. Therefore, in my opinion the link between creativity and innovation is very evident and it is because of creativity, innovation can take place. “Creativity is thinking up new things. Innovation is doing new things.” Theodore Levitt
A great example of the creativity is the McDonald’s franchise. It started off as a barbeque restaurant in 1940 but then Ray Kroc saw the opportunity to make it a hamburger stand. McDonald’s is now one of the biggest franchises in the world serving around almost 70 million customers. (http://www.aboutmcdonalds.com/mcd/our_company.html) Ray used his idea to implement innovation decades ago that still has an impact in the market …show more content…

Problem solving is where entrepreneurs identify gaps in the market which leads to creativity for a solution, innovation to implement the solution which triggers economic development because of production of goods and services in the economy. “An entrepreneur acts as a trigger head to give spark to economic activities by his entrepreneurial decisions.” (http://www.preservearticles.com/201101143326/role-of-an-entrepreneur-in-economic-development.html) In today’s extremely volatile market, creativity and innovation are required more than ever. All businesses strive to implement new fresh products in the market to make profits. Without entrepreneurs we could assume the world would be full of dull homogenous products because of the lack of creativity. Therefore, in my opinion a lot of weight should be kept on entrepreneurship in order for businesses to survive in the market because they lead to the distribution of wealth in the economy and bring interesting ideas into the

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