Explain the process of innovation as described bySchumpeter. What are the relevancies of innovationto entrepreneurial business?
Schumpeter introduced the term ‘creative destruction ’. Hesaid that the innovation and technological change of a nationcomes from the entrepreneurs. In other words, he believed thatthese individuals are the ones who make things work in theeconomy of the country.According to Schumpeter there are 4 phases of innovationwhich are:
Invention: is a new
or a new product.
Creativity: is the
generation and expression
of newideas. Use something in a different way to attract thecostumer with differential. (Creativity is not the same asinnovation)
Innovation is how new idea will be accepted in amarketplace with success. How to make this new productor service to be
invention is not the sameas innovation)
In addition some examples can be described:Google is an innovator for new type of industrial organisationwhich transformed the concept of search engine. It is in themarket over 10 years and it has been accepted worldwide andfollowed as reference for the competitor.Easyjet is big in promoting their brand and running advertisingpromotion to attract more customers. They need high seatoccupancy to be economic, they are inventing with pricingencouraging costumers to search for very low prices (a bargainhunters). They have been growing with the internet in order toavoid queue and to facilitatecostumers’ life.According to Schumpeter the
five types of innovation