Relationship between Entrepreneurship, Innovation and Economic Essay - 2

Relationship between Entrepreneurship, Innovation and Economic Development - Essay Example Such an analytical approach has furnished ample insight into the interrelationship existing between knowledge, innovation and entrepreneurship. However, it goes without saying that there is a lacuna as to the understanding of the comprehensive relationship between entrepreneurship, innovation and economic growth. The understanding of the relationships between micro economic sources of growth and the consequent macroeconomic outcomes is still too nascent as to the establishment of the relationships between varied interacting forces impacting the economic growth. Hence, in an academic perspective it will be really enlightening to analyze the recent advancements into the understanding of the varied forces influencing the creation of knowledge, the promulgation and diffusion of this knowledge aided by apt innovation and the role played by entrepreneurship in the overall growth process. For its goes without saying that the primary process of knowledge creation has to be continually and co mmensurately supported by forces originating from innovation and entrepreneurship, which give way to mechanisms that help in the conversion of this knowledge to societal and commercial needs. It is amply relevant as the developing countries of today could learn a lot from the course followed by the developed countries in their quest for economic growth. It will also immensely help the developed countries in the sense that they are faced with the challenging responsibility of devising growth policies in a futuristic context. Thus, it is emphatically valid to attempt an understanding into the relationship existing between entrepreneurship, innovation and economic growth. Entrepreneurship and Economic Development The very fact that entrepreneurship is closely tied to economic growth is amply corroborated by the commonsensical observation and economic acumen in the sense that the crux of any innovative entrepreneurial endeavour is to convert ideas and knowledge into commercially valid e conomic opportunities. Entrepreneurship is the bedrock on which rest the possibilities for innovation, change and growth. In a world economy that is getting globalized at a fast pace, entrepreneurship is a sources of competitiveness in the sense that it gives way to knowledge and flexibility. With the ensuing shift in the industrial frameworks and structures vying for an augmented decentralization and minimal concentration, the entrepreneurial vigour operating at all the levels in an economy is indeed a source of viable competitiveness. In that context if one takes into consideration the accompanying technological developments and changes and a resultant augmenting global competition and economic liberalization, the very assumption that promoting entrepreneurship in a way leads to the promotion of the economic growth appears more valid today than it did in the past. The available economic, social and psychological knowledge do points towards the fact that entrepreneurship is a proce ss that tends to be dynamic in its scope and ramifications. Though some experts may tend to think of entrepreneurship as a mechanical economic factor, yet, in reality it is far from being so (Pirich 2001, p. 14). Entrepreneurship has as much to do with change as with the choices related to a change era or process. In that context, the existing definitions of entrepreneurship delve on the functional aspects of entrepreneurship that may be allocation of the scarce resources, coordination, making decisions, innovation, capital augmentation and uncertainty management. Entrepreneurship unleashes the dormant growth