Literature Review

Entrepreneurship is the process of launching, designing and running a new business. The people who create the business are entrepreneurs. In today’s world for starting a new business is needs innovation so that company can survive in the market (Drucker, 2014). Innovation helps the entrepreneurs to bring the growth in the small start-up and it also helps in sustaining the business in the marketplace. Basically, an innovation is ideas that add-on to the products and services of the business. Our economy is surviving in the competitive world because the leaders or the entrepreneurs are making the changes in the way of designing the business. It is said that the entrepreneurs are innovators of the economy (Kuratko, 2016). Many companies and the entrepreneurs keep the innovation as crucial part of their organization because they know that this is the key to the success of the company.

The report talks about the various dimensions of the innovation that contributed to the growth of the small start-up entrepreneurs. These dimensions of the innovation are related to the product, process, Capabilities And Change, material and many others. The innovation in the entrepreneurship of small business is must to face the competition from the large industry. Innovation helps in understanding the fact that the small business plays a vital role in the economy, they directly contribute to the financial growth of the economy of the country. The report shows the literature review and the critical evaluation in regards to the role of the innovation and the entrepreneurship in small business which leads to the growth of the economy. The paper discusses the positive as the negative aspects. 

The role of innovation and entrepreneurship in economic growth is increasing with the changing world. According to Shane, 2012, said that innovation is must for the entrepreneurship for identifying the opportunities of the profit. It includes the involvement of the business ideas with the combination of the resources to achieve those opportunities. The author talked about the entrepreneurial opportunities in which the goods, raw material, services and the organizing methods can be presented and sold at the higher price than the cost of production. As per author, the idea behind the entrepreneurial is a set process depends on the individual and the opportunities. The link between the innovation and the entrepreneurship creates the opportunity to bring the growth in the economy of the country (Shane, 2012). This combination of the innovation in the small enterprise will help the enterprise to face the competition with the medium and large enterprise.

Considering the different research papers the author Goedhuys and Srholec, 2010, shared details about the benefits of the innovation by entrepreneurship depends on the embedded system of the innovation. The better innovation system will lead to a circulation of technology across the domestic economy. Innovation will accelerate the development of the country and increase the opportunity to tap into the global technology. The small enterprises will be able to make the use of the technology with innovation in their business which enhances the growth of the economy. According to the author, the weaker system of the innovation will not be able to bring the growth in the economic system because the entrepreneurs will put fewer efforts with weak innovation. Entrepreneurship is contributing to the growth of the economic development (Goedhuys and Srholec, 2010). The growth of the small start-up entrepreneurs is possible because of the innovation.

Critical Review

According to Szirmai and Nature, 2011, the technology increases the production of the company that eventually add-on to the economic gain. Innovation has become a most important advantage to firm competitiveness and the success. Major components such as process and product advancement are linked with the technology along with the low-cost barriers. The entrepreneur needs to identify the innovation with the help of which they can design and launch the new business in the market (Szirmai and Nadue, 2011). The use of innovation by the entrepreneurs leads to opportunities of the job vacancy in the country. The job openings in a country will contribute to the growth of the economy. This shows that the small enterprise directly contributes to the growth of the economy. Entrepreneurs and innovation are the key elements that lead to the growth of the economy. The authors Colombelli, Krafft, & Quatraro, 2014 agree with the Szirmai and Nadue, 2011, the author said in the journal that the product innovation is must for the business; to bring the product innovation many organizations make use of the technology. Technology advancement will lead to the different creative ideas because of which innovation takes place. This technology advancement helps in identifying and applying the new ways of designing and launching the business (Colombelli, Krafft, & Quatraro, 2014). Technology advancement leads to the job vacancies as well, for handling technology effectively the companies need to appoint the person who can maintain and manage the technology.

The Grilli, & Murtinu, 2015, shared views in the journal article about the innovation and entrepreneurship leads to the economic growth. He said that entrepreneurship plays a role in creating the business, the new business in the country leads to job opportunities which will strengthen the market competition and enhance the productivity. This is the way the development takes place, more and more company would like to come in the market to make a profit. Entering into the international trade market will lead to the foreign direct investment which is beneficial for the government of the country and brings the development of the country (Grilli, & Murtinu, 2015).

In the perception of Gkypali, Rafailidis, & Kostas Tsekouras, 2015, the market is becoming dynamic; the working without the use of innovation is not possible, if in case a company keep offering the same product in the market then the rivals can rule the market. To remain in the competition, it is must for the company to foster the innovation and creativity in the members, executives, and the employees (Gkypali, Rafailidis, & Kostas Tsekouras, 2015). This will accelerate the competition among the competitors in the market.

The Koellinger, & Thurik, 2012 stated that the successful entrepreneurship needs to focus on the creativity, strategic business practice and the integrating innovation. The innovative entrepreneurial business members are combined with the stability and growth of the developed economies. Most of the entrepreneurs take advantage of the innovative and creative ideas to bring the products and business for the targeted audience (Koellinger, & Thurik, 2012).

According to Norman and Verganti, 2014, Innovation is also based on different dimensions that shows the implementation of the innovation depend on the business. There are various dimensions of the innovation; incremental and radical is types of innovation said by the author. The incremental innovation brings the improvement of products, ideas, and strategies that are put in the place. This innovation helps in bringing the efficiency of the products and the services by increasing the life cycle. Radical innovation generates changes in the product, processes or services and transforms the existing market or industries (Norman and Verganti, 2014). The innovation motivates to go-forward, propelling the development and the growth of the economy.

There are various dimensions of the innovation that helps the entrepreneurs to contribute to the growth of the small start-up entrepreneurs.  Below are the dimensions of the innovation that helps the entrepreneurs to contribute to the growth (Pantano, 2014).

Where innovation takes place: – The innovation can take place in regards to the organization, its capabilities and the output of the organization. Research and development will help the entrepreneurs to bring the development in the product, services, business processes, and supply chain and in the business model of the company. This shows that the innovation takes place in different dimensions. Bringing innovation at the various dimensions of the organization is a difficult task for the entrepreneurs so they might be not able to bring the innovation in all the dimensions of the organization (Morris, 2013). Though, this innovation in the organization brings the growth in the new start-up of the small business. The innovation brings the growth in the business with the help of which the business will be able to survive for long and will contribute to the development of the economy of the country.

Industry context: – The nature of the innovation varies from industry; the need of the innovation varies considering the market. The innovation is must to create the competitive advantage, the innovation used by the company to face the competition. The entrepreneurs invest huge amount on product innovation and operational innovation. Investing amount on product innovation needs a huge amount for that entrepreneurs needs to arrange the capital so that they can invest the amount in the innovation of the product (Bergek, et.al., 2015). Arranging the capital is difficult for the new-start business, but they can take a bank loan. Product innovation in the new start-up is must to attract the customers towards the business. The business will be able to make the customer satisfaction and this is the reason the company is willing to bring the innovation in the product and the operational.

Innovation domains to focus on: – It is must for the entrepreneur to identify the issues of the innovation on which focus is needed. The entrepreneur decides on which parameter they need to focus on, it depends on the small start-up. The entrepreneur can focus on individual creativity, team creativity, inter-organizational network, organizational innovation and the government innovation policy. For instance, a coffee shop focuses on the team creativity and inter-organizational network because they know that collective team can bring the success of a business. On the other hand, and advertising agency concerned with the individual creativity as well as the team creativity, the agency is focusing on these two innovations because they know that individual ideas are must for the formation of the advertisement (Adams, Jeanrenaud, Bessant, Denyer, and Overy, 2016). This shows that the need for the innovation domain depends on the type of business, according to the start-up the entrepreneurs will focus on the innovation domain.

The sources of ideas: – The innovation is an idea so it there is different sources through which an innovation can arise. The ideas and innovation may arise from the customers, employees, management, suppliers, competitors and public domain or academia. The entrepreneurs need to consider the innovation that arises from different sources. In the business, many customer visits and they can share their feedback. These feedbacks can be innovative ideas that can help the business in growing into the market (Nieves, and Segarra-Ciprés, 2015). Competitor’s business strategy can be adopted by the entrepreneurs so that they can face the competition. Though, implementing innovative ideas is difficult for the entrepreneur. The entrepreneurs need to analyze the innovative idea before implementing the idea. The testing of the idea needs to be done which is important to check the success of the innovative idea. Though this process is time-consuming for any start-up, it is must check the innovative idea before implementing it in the business. The implementation of the innovative ideas will definitely bring the growth of the business. The growth of the business will lead to the development of the economy as more and more business opportunities will increase. 

Stage of organizational growth: – This dimension of the innovation says that the innovation is done considering the stage of the organization. The need of the innovation varies from one stage of an organisation to another stage of an organisation. The start-up organization focuses on the innovation through business processes and products and services. The start-up of the business is the most crucial stage in which the business needs to take step carefully. While adopting the innovative business ideas the entrepreneur needs to be very careful so that they can take correct decision for the business. The implementation of the unsuccessful idea will create a trouble for the business (Hanks, 2015). The innovation changes with the change in the stages of the organization. When the organization comes at the maturity level, they start facing the competition. To face the competition and to sustain in the competitive market the company adopts the new innovative ideas. In the maturity stage, it is difficult for the company to bring the changes in the product, price, and the business process. The company adopts the innovative ideas that help the company in identifying the new markets where the company can launch the innovative products. This shows that innovation brings the growth of the small start-up through expansion in the new markets. This expansion of the companies will enhance the development of the urban and rural areas of the country which brings the development of the economy. Though, stages of the organization growth create the huddle for the entrepreneurs. 

Size and complexity of organization: – This is one of the dimensions of the innovation, size, and complexity of the organization impact the innovation implementation. The small start-up consists of the flatter organizational structure that allows communicating effectively and rapidly. On the other hand, a large organization needs more time to design, cultivate networks and communication channels (De Luca, and Atuahene-Gima, 2013). The small start-up can easily access to the innovative ideas in the business. After the maturity of the organization, the structure of the business became complex which creates the problem in implementing the innovative ideas.

Organizational innovation maturity: – This is the final dimension of the innovation which talks about the innovation maturity of the new start-up. This shows the way innovation is managed by the organization, the entrepreneurs learn the way to identify and implement the innovation in the required areas (Adams, Jeanrenaud, Bessant, Denyer, and Overy, 2016). The entrepreneurs learn how to introduced organizational structure and processes so that they will be able to manage the innovation consistently and effectively through business processed, product and functionality. It is must to manage and monitor the innovation for constant improvement in the organization process and the innovation performance.

The innovation drivers lead to the growth of small start-up entrepreneurs, innovation is must for all kinds of business to enhance the growth and success of the business along with the economic development (Boso, Cadogan, and Story, 2013).

Nurturing talent: – There are four people who drive innovation; those are inventors, entrepreneurs, extreme individual achievers. In the competitive world, each and every employee need to think creatively, but there are some of the employees having natural talent. There are some of the employees who lead in some of the areas because of their natural talent. The entrepreneurs might face difficulties in identifying the correct talent for their field.

Managing talent: – The entrepreneurs need to understand that whenever a team employee comes with the innovative idea, there is a need for the acknowledgment and reward for further innovative ideas. The entrepreneurs are only drivers that provide the value to the employees (Al Ariss, Cascio, and Paauwe, 2014). Managing talent in the organization will lead to the growth of the entrepreneurs. Encouraging and managing the creativity will help the organization to drive the continuous innovation.

Building relationship: – The relationship among the colleagues as the team member along with the relationship between the team members with their manager can impact the creativity. The strong relationship will lead to the creativity and the encouragement. The relationship makes the employee free to share the opinions in regards to the innovative ideas. This will lead to the growth of the small start-up entrepreneurs. On the other, the strong relationship creates the problems when the employees start expecting the implementation of the innovative idea. The entrepreneur needs to keep the balance in the relationship.

Encouraging a culture of innovation: – The organization should drive the innovation on regular basis, this is the only way through which the organization can create the culture. The entrepreneurs can try to bring the changes in the culture to make the innovation on the continuous purpose (Autio, Kenney, Mustar, Siegel, and Wright, 2014). This is the way to enhance the growth of the business. Though creating a culture like this is very difficult for the management. The management needs to make their employees understand the need for the innovation. Employees of the organization play a vital role in culture. 

Conclusion

The report throws light on the innovation and entrepreneurship which plays a vital role in the business. Innovation is the key success of any business, it is important to maintain and monitor the healthy level of innovation in the organization. The report shows the different opinions of authors about the innovation in the entrepreneurship that will lead to the economic development. The contradiction of different authors shows the importance of the innovation in the business and for the entrepreneurs. The report also discusses the different types of dimensions, these dimensions shows the contribution of the innovation to enhance the development of the small start-up entrepreneurs. Dimensions of the innovation shows reflect the adoption of the innovation depends on the modern business. It is recommended to each entrepreneur to come up with the innovative ideas in this competitive world (Schaper, Volery, Weber, and Gibson, 2014).

The drivers of the innovation show the ways to motivate and to encourage the employees present in the organization. It is must understand the role of the innovation and entrepreneurship; both are depended on each other. Economic development suffers because of the activities of the entrepreneurs; the activities of the entrepreneurs can create the positive as well as the negative impact on the development. These drives of the innovation contribute to the growth of the small start-up entrepreneurs.  

References

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