Entrepreneurship and Innovation are the two interrelated words used in the business world. Although, both of these words have almost the same idea, but using them interchangeably would make a big mistake. Entrepreneurship refer to the process of coming up with new ideas of the business opportunities by taking the risk. Entrepreneurs does not restrict themselves to a single kind of innovation, rather they search for the innovative sources. The entrepreneur play a significant role in creating wealth at the local and national level by proving employment to the people and helping government through the taxation. The new product introduced by the entrepreneur adds values to life of people living in the society. Innovation means the introduction of something new such as new product, idea, model and process. Innovation allows the individual to enhance their creativity and come up with new business ideas and solutions. Innovation helps the organization to remain competitive in the industry. The next section explains the concept of entrepreneurship and innovation in detail. It also put emphasis on the comparison of the benefits, detrimental of both of these terms, and explains its social and economic implications.
Entrepreneurship and innovation are the two different terms having the different meaning. The key difference between the innovation and entrepreneurship is that entrepreneurship helps the entrepreneur in implementing new ideas into the business and creates new opportunities (Park, 2017). However, innovation does not always results in creating new business opportunities.
Consider the difference in the characteristics of innovation and entrepreneurship. First, Innovation has the short term durability, while the entrepreneurship has the long term durability that adds values to the opportunities created by the entrepreneur (Davidsson, Low & Wright, 2001). Second, there is no risk involved in the innovation, whereas, risk taking is an integral part of the entrepreneurship that cannot be avoided. Third, the people involved in innovation may lose their interest after certain stage, whereas, the entrepreneur try to make all possible efforts to make the business successful. Forth, innovators have the desired skills required for the innovation. On the other hand, entrepreneurship requires certain skills such as planning, managing, decision making etc.
Entrepreneurship is an important form that is beneficial to the entrepreneur in many ways. First, entrepreneurship helps in development of the managerial talent (MANOCHA, 2012). Entrepreneur requires several skills such as decision making ability to run the business. Through his managerial abilities, entrepreneur compare and analysis the different situations and choose the best one. Second, entrepreneurship allows the entrepreneur to create a business. The entrepreneur ensures coordination among different factors of productions and ensures an effective use of them. Third, entrepreneurship helps the customer in fulfilling all their needs and living a better standard of living as they launch products and services as per the needs of their customers. Forth, entrepreneurship helps in the national development of the country by impacting the economic growth in the positive way (Essays, UK, November 2018). They invest their own and market capital and put them in the productive resources. On the other hand, innovation helps in improving the productivity and reducing the cost. This productivity is increased by enhancing the production capability and exploiting economics of scale. Second, innovation helps in improving the overall quality of the product to meet the customer’s demand. This, in turn, leads to higher sales and profit level. Third, innovation allows the entrepreneur to introduce wide range of products, rather than restricting them to a single product. Introducing wide range of products increases the profit level and diminishes the risk to the shareholders. Innovation helps the organization to come up with the environmental protection techniques such as reducing carbon emission. Thus, they can handle environmental and legal issues.
One of the biggest disadvantages of the entrepreneurship is the huge limit constraint they face. They have to devote sufficient time in growing their business and managing all the activities taking place in the organization. Second, the entrepreneur faces difficulty in competing with others. This implies that they have to think of the strategies to rise above all and remain in the industry in the long run. Although, entrepreneurs make best possible efforts to ensure the growth of the business, but they did not get 100% guaranteed satisfaction (Omoruyi, Olamide, Gomolemo & Donath, 2017). There is equal probability of success and failure. The entrepreneur faces a very stressful situation as they are not only responsible for the growth of the company, but also for the mission, vision and public image of the company. Innovation is a costly affair. The entrepreneur may lose its business if they invest too much time in innovation. In some cases, there is wastage of resources and as a result, the entrepreneur is unable to introduce new products at a low cost and with fewer resources. Sometime, the dependence on the workforce reduces as a result of innovation and the workers lose their jobs (Landström, Harirchi & Åström, 2012). In such situation, the entrepreneur has to make a tough choice between their profitability and sustain their employees. Even if the organization retains their employees, the employees face difficulty in adopting the new changes (Hindle, 2009). This results in the lower productivity of the employees and thus, it reduces their morale.
Entrepreneurship helps in creating new wealth. The entrepreneur develops new and improved product and services that enables the development of new market and creation of new wealth. In addition, the increased level of employment and earning contributes to the economic development of the country by increasing tax revenue. The increased tax revenue can be invested to other sectors that are struggling due to the low capital. Entrepreneur also requires skilled labor for carrying out their operations. This increases the job opportunity for the people living in the society. As the business grows, the opportunities for the people giving in the society will also grow. Innovation helps the organization or company to move forward and grow at both domestic and overseas market (John, Corvello, Grimaldi, & Pierluigi, 2017). This, in turn, helps in creating wealth and economic growth of the country. With the help of innovation, entrepreneurs are able to find the market and effective solutions to their problems. Through their creativity, entrepreneurs are able to generate income for themselves and able to provide employment opportunities for their employees. Thus, innovation has important social and economic implication. It also helps in creating social change by improving the quality of life, morale and increasing economic freedom. For example, the increases in water supply in the water scare region unable the people to store water. This leads people to focus on their jobs instead of basic necessities. This, in turn, has impact on the income, productivity and business of the concerned person.
Entrepreneurship and innovation are the commonly used terms and are considered as the important condition for the sustainable development and economic growth. The existing literature and results produced above indicate the connection and comparison between entrepreneurship and innovation. Innovation means introducing or coming up with a change that add values to the individuals or the organization. Apart from the commercial outcome, innovation is related to ideas. On the other hand, entrepreneurship is commercially driven. Entrepreneur creates or builds something that leads to commercial benefits to them. They make use of the innovation to create new values. To develop a successful innovative economy, entrepreneur has to think of both creating new values and ability to use these values in their business. Without this, the entrepreneur ends up with the innovation that does not become commercially viable.