Discuss the Relationship Between Entrepreneurship, Innovation and Economic Development

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Discuss the relationship between entrepreneurship, innovation and economic development. With the rapid development of a dynamic global economy, increasingly countries are seeking breakthroughs in their economic development. Stimulated by these ever-increasing competition pressures, exploitation of new ideas and businesses which provide great potential for economies to thrive, accordingly, is gaining widespread attention (Mansfield, 1972; Wong et al., 2005). In consequence, on a global scale, not only some developed countries with strong capability to absorb and implement new ideas, but also some emerging developing countries, are taking measures to inspire entrepreneurship and innovation with the purpose of benefiting economic…show more content…
The annual increasing amount of Chinese investment in Research and Development over the past 8 years, corresponds to 1.4 per cent of its GDP of 2008, and contributes to its top rank among development states (Sebastian, 2010). On the other hand, the environment of high-level economic development also makes a positive influence on innovation. Fagerberg (2009) did a study in Europe to indicate the relationship between the level of development and innovative activities. It shows that a proportion of companies who participate in innovation activities are influenced by the level of GDP per capita. The first will be higher when the second is higher. Japan is good example of a developed country, which has a thriving economy. The government in japan invests huge amounts in innovative activities and uses laws and policies to create a sound framework condition to support it. In addition, Annex stated that Japan opens its market to assure its market can be contestable one. Entrepreneurship is broadly accepted as a prominent driver of economic development (Schumpeter, 1912; Camp, 2005). As United Kindom Her Majesty's Treasury (2005) declared, entrepreneurship and its profound impact on enterprises have been one of five driving forces of the Nation’s remarkable strategy to promote economic development for the last ten years. Drucker (1985) also accepts the major role of entrepreneurship and he even indicated that present businesses could hardly
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