Discuss the Relationship Between Entrepreneurship, Innovation and Economic Development. What Role Do Creativity and Problem Solving Play in This Relationship? Refer to Both Theory and Examples from the Business World to Support Your Discussion.’

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Discuss the relationship between entrepreneurship, innovation and economic development. What role do creativity and problem solving play in this relationship? Refer to both theory and examples from the business world to support your discussion.’ There are many links that bring together a relationship between entrepreneurship, innovation and economic development, and both creativity and problem solving play a large role within this relationship. Entrepreneurial activity can lead to innovation within a market for a product or service, which can therefore lead to increased economic development. Within this report I will attempt to analyse this relationship and create further links. The definition of an entrepreneur and entrepreneurship…show more content…
Although, it has been argued by Schumpeter that entrepreneurs are in fact reactive and only seize opportunities, rather than create them. However, products and services can also be generated via creativity in the form of, serendipity, whereby a product is created via a “fortuitous coincidence of thoughts and events” (Entrepreneurship from Creativity to Innovation, 2007, p.19). For example, the Microwave Oven, created in 1946, was brought about when a magnetron melted a candy bar in Raytheon engineer Percy Spencer’s pocket (MicroTech, 2006), therefore generating the notion that this could be encapsulated and sold as a product. Obviously this product is a form of discrete change as there was no similar product at the time and this innovation lead to economic development throughout the world. However, discrete change can also be linked to de Bono’s “lateral thinking”. Lateral thinking involves “Idea generation and is a problem solving technique in which new concepts are created” (Business Dictionary, 2010), a different approach to linear thinking. By using lateral thinking, entrepreneurs can solve problems quicker than that of the linear approach and are able to spot opportunities within the market before others. However, Schumpeter argues that there is often significant resistance to any method of entrepreneurial thinking due to its high risk. In a survey by NESTA, it was found that only 1 in 100 inventions more than

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