Innovations may be new products, new processes,
or new organizational methods that are novel and
add value to economic activity. Thus, invention
parallels the concept of science and innovation
parallels the concept of technology.
It is useful to think of an innovation as something
new that has been brought into use. Thus,
this innovation represents, in a sense, a new
underlying technology.2 Embedded in this distinction
between invention and innovation is a process
whereby inventions become applied. This process
is central to what we call entrepreneurship.
Entrepreneurship is a process involving the organization
of resources, and the output of that process
is an innovation.3 Of course, for entrepreneurship
to have economic value the resultant output or
innovation must have economic value.
From an economic perspective, the concept
of entrepreneurial innovation can be traced back
to the Physiocrats in France in the mid-1700s.
Baudeau (1910, p. 46) referred to a process
guided by an active agent, which he called an
entrepreneur, within a capitalistic system4:
Such is the goal of the grand productive enterprises: first
to increase the harvest by two, three, four, ten times if possible;
secondly to reduce the amount of labor employed
and so reduce costs by a half, a third, a fourth, or a tenth,
whatever possible.
Embedded in this conceptualization of entrepreneurshipis
the notion of an innovative process,
one perhaps as simple as the perception of new
technology adopted from others so as to increase
agricultural yield, or one as refined as the actual
development of a new technology to do the same.
When the process is completed, and when the
innovation is put into use, there will be an increase
in productivity, and possibly, substitution of capital
for labor.
We have defined entrepreneurship as a process:
an output is the promotion of one’s own innovation
or the adoption of another’s innovation.
The term entrepreneurship is commonly used to
refer to a businessman or even to a risk taker.
We use the term entrepreneur in a much broader
sense; an entrepreneur is one who perceives an
opportunity and has the ability to act upon it.
Hence, entrepreneurship is a process that involves
both perception and action. The perception of
the opportunity may be influenced by changes in
strategic directions or competitive markets,
Innovations may be new products, new processes,or new organizational methods that are novel andadd value to economic activity. Thus, inventionparallels the concept of science and innovationparallels the concept of technology.It is useful to think of an innovation as somethingnew that has been brought into use. Thus,this innovation represents, in a sense, a newunderlying technology.2 Embedded in this distinctionbetween invention and innovation is a processwhereby inventions become applied. This processis central to what we call entrepreneurship.Entrepreneurship is a process involving the organizationof resources, and the output of that processis an innovation.3 Of course, for entrepreneurshipto have economic value the resultant output orinnovation must have economic value.From an economic perspective, the conceptof entrepreneurial innovation can be traced backto the Physiocrats in France in the mid-1700s.Baudeau (1910, p. 46) referred to a processguided by an active agent, which he called anentrepreneur, within a capitalistic system4:Such is the goal of the grand productive enterprises: firstto increase the harvest by two, three, four, ten times if possible;secondly to reduce the amount of labor employedand so reduce costs by a half, a third, a fourth, or a tenth,whatever possible.Embedded in this conceptualization of entrepreneurshipisthe notion of an innovative process,one perhaps as simple as the perception of newtechnology adopted from others so as to increaseagricultural yield, or one as refined as the actualdevelopment of a new technology to do the same.When the process is completed, and when theinnovation is put into use, there will be an increasein productivity, and possibly, substitution of capitalfor labor.We have defined entrepreneurship as a process:an output is the promotion of one’s own innovationor the adoption of another’s innovation.The term entrepreneurship is commonly used torefer to a businessman or even to a risk taker.We use the term entrepreneur in a much broadersense; an entrepreneur is one who perceives anopportunity and has the ability to act upon it.Hence, entrepreneurship is a process that involvesboth perception and action. The perception ofthe opportunity may be influenced by changes instrategic directions or competitive markets,
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