The Relationship Between Entrepreneurship, Innovation and Economic Development and the Role of Creativity and Problem Solving in This Relationship

2015 Words Dec 31st, 2011 9 Pages
Since the beginning of 21st century, entrepreneurship has become much more popular. It is published by Yoodoo that during the first six months of 2010, there is a total of 204,361 new firms which is a 51 percent rise on the first six months of 2008 established in the UK (BBC, 2010). There is obviously a reason why entrepreneurship is prevalent that researches have shown that entrepreneurship can not only make fortune for entrepreneurs but also motivate the economic development (Hisrich, et al. 2010). However, to develop economy by entrepreneurship, innovation is an essential element if more profit and fortune are desired through entrepreneurship. The increase in innovation courses in universities reveals that innovation has been attached …show more content…
This is because creativity is the generation of new ideas which will become innovations if they are successfully exploited (Lumsdaine and Binks, 2007). Creative problem solving is a method for obtaining new ideas focusing on solutions to problems to achieve creativity. For instance, umbrella was invented as a solution to the problem of being wet from rain (Eyers, 2006). In the other aspect, creative problem solving which is the application of creativity to the ability of problem solving can assist entrepreneurs to remove the obstacle to the process of implementing the opening of new firms (Kirkham, et al. 2009). Take the opening of the first air-cargo company by Frederick W. Smith for example, when Smith encountered fund shortage in purchasing large jets, he purchased used jets from ailing passenger airline where he could buy plans at a lower price (Hisrich, et al. 2010). Therefore, creativity and problem solving play a crucial role as both basis of innovation and catalyst in the relationship of innovation and entrepreneurship.

Innovation that is implemented through entrepreneurship is considered to be the motivation of economic development which should be explained on the perspectives of developing and developed countries. Economic development means increase in per capita income, innovative
Open Document