Discuss the Relationship Between Entrepreneurship and Economics

In the early 18th century, Richard Cantillon, a French economist first introduced the word “entrepreneur”: “L’essai sur la nature de commerce en general”, which means that anyone who runs a business whatever the type, farming or administration, for instance, is that can pursue profits under condition of uncertainty. After Richard, social scientists are using different interpretations and definitions to conceptualize this abstract idea till now. Joseph Schumpeter (1934), for example, thought that everyone can be an entrepreneur when using his or her creativity to build up business. Moreover, some other social scientist defined it as challenging assumptions and bringing about paradigm shifts with their creative imagination, and even combined it with the heretic personalities (Binks, Kirkham, and Mosey, 2009). It is an innovation that the old products or ideas been replaced by new things that nobody ever tested before, which always make achievement because people want to solve problems. As a result, the new products or service become better to satisfy the needs of market and productivity grow so that economy is developed. This essay will discuss the relationship between entrepreneurship, innovation and economic development and the role of creativity and problem solving playing in the relationship with three stages, which are becoming an entrepreneur, disrupting and having a foothold in market, and stimulate economic development, and several related examples from real business world.

Creativity, a noun represent productive thinking to solve the problem that cannot be solved using common sense or old methods, is a premise of entrepreneurship (Charrakh and Sharifi, 2011). The first stage for a successful entrepreneurship is entrepreneurs applying their creativity and innovation into marketplace to start a business by solving the problems that bother people every day. Research and development is one of the most useful approach for entrepreneurs to create (Erken, 2008) since the innovation is new for people because they don’t know it or don’t know how can it work before. Besides, scientists believe that sometimes ideas come out of thin air, the illumination is from accumulation (Binks and Kirkham, 2009). SONY can be regarded as one good example for those two points mentioned above. SONY’s original name was Totsuken, which was officially established in 1946. Ibuka and his research group deciding to work on a magnetic sound recorder because Totsuken’s business connection with national broadcasting station in 1947. After two years’ research and development on magnetic material, such as oxalic ferrite, the size of the tape recorder, and the market, the tape recorders were selling well. This product is a milestone of Totsuko, which led the company really had the foothold in market the first time. Walkman, another milestone of SONY, was the one that helped SONY struggled out of stuck situation and catch the opportunities in the market.