Discuss the relationship between entrepreneurship


In a world where ideas drive economies, it is no wonder that innovation and entrepreneurship are frequently seen as inseparable bedfellows. These two concepts are said to be vital for an organization to succeed and face competition in today's ever-changing environment. Existing definitions of entrepreneurship often relate to the functional role of entrepreneurs (Friijs et al.2002: 1-2; Jasskelainen, 2000:5). The early work of Schumpeter (1911) established conceptually the entrepreneur as an innovator as the key figure in driving economic development. An innovative economy is at the core of regional vitality and it is the engine which leads to betterment of living standard, that is, economic development. Innovation is often seen as the practical application of creativity in an organization. Thus, one can hold that creativity is a whole-brain activity that involves conscious and subconscious mental processing in generating an idea and making something hitherto unimagined to happen (Ned Herrmann 1922-1999) whereby the root cause originates from a problem. In order to clearly establish the relationship of the above-mentioned concept, the assignment of Air conditioner as a product might be useful.

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It is a wonderful thing to be able to flip a switch, and have an entire room cooled through air conditioning. Actually, the first air conditioning unit made its appearance at the turn of the twentieth century. Air cooling system or air conditioning, as its name suggest is not only the monitoring of temperature in an indoor environment. The latter was defined by engineers as a mechanical process of controlling humidity level, temperature, cleanliness and circulation of air in buildings and rooms. (Source: ASHRAE Terminology of HVAC&R, ASHRAE, Inc., Atlanta, 1991, downloaded from http://en.wikipedia.org/wiki/Air_conditioning as at 19th November 2010) In its early days of existence, units were basically marketed for two main purposes namely for industrial use and later for comfort reasons. In an economic point of view, the air conditioning industry can be seen as a major revolution that took place in the world since it contributed a lot in economic development : - through employment, facilitating industrial processes, in the transport industry and so on. Although today it has been subject to various environmental issues, air conditioning units are still considered as one of the greatest invention throughout history Invention is not equivalent to innovation; it is more (Lumsdaine, E, Binks, M (2007) a). The difference is that invention is solely the formulation of new ideas for a product while innovation is all about the practical application of new invention in the market and thus having the ability to influence consumer demand. According to Schumpeter theory of economic development ((1911) The theory of economic development, Ref 2.1), an economy is a collection of enterprises and there is interdependence among the firms. Since innovation cause changes in pattern of consumption, this will affect economic activity but the magnitude of change will depend of the type of innovation: - Gradual or Discrete.

To better understand the concept of gradual and discrete change, it is important to associate a previous product commonly used for cooling purposes such as electric fan. Actually, gradual change does little in process of altering economic activity. It consists mainly of improvement in previous versions of a particular product, that is, in a way reflecting consumer demand in terms of taste and fashion. On the other hand, discrete change is a complete product revolution. It is a path-breaking product, that is, a complete disconnection from earlier versions. For instance, one can hold that the innovation of air conditioning is a complete breakthrough when compared to electric fan. The latter only creates a directed flow in the air while air cooling units produces cool air and also dehumidifies the indoor environment. Thus according to Schumpeter (1911), one can hold that Willis Haviland Carrier was a successful entrepreneur since he breaks down the deadlock of resistance: -social and institutional, and enables a wave of innovation to occur since it partly caused the replacement of electric fan with air conditioning.

Temperature concern is one of the everlasting problem that mankind face in his or her daily life. According to the American Heart Association (as at 15th November 2010), extremely hot weather conditions cause dehydration, heat exhaustion and heat stroke. These risks increase when there is a high level of humidity in an environment. These health issues gave rise to the creation of electric fan in the late 1880's by Schyler Wheeler. However, electric fans proved to be an inefficient mean of cooling a room and coupled with this it have various problems. Electric fans have as main feature to create and direct airflow. In other words, it does not remove heat from indoor air for thermal comfort since it sends normal atmospheric air toward people and do not dehumidifies the air. Moreover fans are powered by an electric motor and have blades that create the airflow, thus causing them to be very noisy in most cases. This is a serious drawback especially for small children and also it prevents people from working properly in a quiet environment. Fans indirectly cause other health problems like allergy since it accumulates dust on its cage (Source: 'Top 5 reasons to have Air conditioning installed'. Downloaded from http://ezinearticles.com/?Top-5-Reasons-to-Have-Air-Conditioning-Installed&id=2188634 as at 18th November 2010). In addition, the usage of electric fan does not permits an individual to regulate the temperature of the air flow generated only its speed and oscillation. These drawbacks of electric fan made inventors search for a more efficient cooling device and ultimately, after various attempts air conditioning was invented.

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After clearly adopting the ingenuity problem solving process, inventors came up with a wide range of ideas. In fact, many people contributed to the invention of air conditioning prior to its innovation in the early twentieth century. Ancient Greeks, Jews and Persians were among the first nations to reflect on cooling techniques. This were possible since they were able to understand the basic theory of air conditioning which states that heat flows from hot areas to cold. Consequently the Greeks carried an experiment which consisted of collecting natural ice and snow to cool food. Obviously the ice would melt and they thought of wood as a material to insulate the ice. On the other hand, the medieval Persians used the creative skills to cool buildings in hot weather conditions. Their attempt consisted of a complex building structure comprising of a huge pool in the courtyard and of a wind tower. Their idea was to collect rainwater and once it evaporates, the cool air produced would pass through the wind tower and ultimately cool a building. (Source: 'History of air conditioning' downloaded from http://www.central-air-conditioner-and-refrigeration.com/air-conditioning-history.html as at 20th November 2010). In 1820, Michael Faraday a British scientist developed a cooling device which uses ammonia as main ingredient. However, this idea was abandoned since ammonia is hazardous for human health. Ten years later, the first American to think upon cooling issues was Doctor John Gorrie. He invented a device which blew air over a bucket of ice to create a cool breeze. Gorrie's design earned a commercialization patent in 1851 but his cooling device proved to leak when tested on a larger scale. (Source: 'History of air conditioner, Article base, downloaded from http://www.articlesbase.com/accessories-articles/history-of-the-air-conditioner-425063.html as at 20th November 2010).

After John Gorrie's failure, there was one engineer who began to construct an air conditioning unit that would most closely resemble what people uses in modern times. In 1902, only one year after being graduated, Willis Haviland Carrier invented and innovated the first Air Conditioning unit in operation. Willis intention behind this creation was to tackle a problem faced by a printing company in New York due to fluctuation in heat and humidity. His idea was to install a system which will blow air over cold coils and through a moisture condenser in order to avoid alteration in paper size and misalignment of ink on printings. In short, Carrier wanted to create a machine that will treat the air. He entitled his project as "Apparatus for treating air" and it was successful. Carrier as opposed to other inventors who touch the filed went further in his research and his greatest discovery occurred while waiting for a train in a foggy and mystic environment. He thought of inventing an apparatus similar to his invention to control temperature and adjust humidity. (Source: The father of cool, Willis Haviland Carrier- Air conditioning, downloaded from inventors.com, html: http://www.inventors.about.com/library/weekly/aa081797.html). After a throughout analysis, he realized that his apparatus sis not only cool machinery but also the air and regulates humidity.

After Carrier's invention for the printing plant, the air conditioning industry began to bloom. On 2nd January 1906, he was granted a patent numbered 808897 for commercialization of air conditioner. This innovation led the world into a new era. The industrial industry was the first hit by the air conditioning revolution. Businesses which were susceptible to heat and humidity such as tobacco, textiles, and chocolate began to expand and flourish. In 1922, Carrier had two breakthroughs. He replaced ammonia with a non-toxic coolant named dielene and added a central compressor to reduce the size of a unit. This facilitated the innovation of air conditioner on a wider scale. In 1925, Rivoli movie-theater was air conditioned and thus, enabling summer blockbusters to be played. (Source: Jones Jr., Malcolm. "Air Conditioning". Newsweek. Winter 1997 v130 n24-A p42 (2)). Mass production of air conditioner started when Carrier and 6 other engineers formed their company. Although the first air conditioning unit was installed in Charles Gate house in 1914, it was after the World War 2 more precisely in 1924 that the latter enters the home of average people. Sales were escalating from 74000 units sold in 1948 to 1045000 units in 1953. (Source; 'History of air conditioning', Downloaded from http://www.facstaff.bucknell.edu/mvigeant/therm_1/ac_final/bg.htm as at 18th November 2010). In the following years, there was a wide dissemination of air conditioning units since they were to be found in all offices, industries and in houses. It has completely made electric fan an obsolete mean of cooling people. The definition of innovation which includes going beyond invention and sales to a paradigm shift and permanent change in the way a process is done is in line with Joseph Schumpeter's idea of creative destruction and is applicable for air conditioning. (Lumsdaine, E, Binks, M (2007) b)Thus, one can hold that Willis Carrier also known as the 'father of air conditioning' led to economic development in the world.

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According to the World Bank, economic development refers to the "Qualitative change and restructuring in a country's economy in connection with technological and social progress. The main indicator of economic development is increasing GNP per capita, reflecting an increase in the economic productivity and average material wellbeing of a country's population". Air conditioning unit have contributed enormously both directly and indirectly towards betterment of living standards. It has made the world a much cooler place to live. Air conditioning devices have different applications. On a process application basis, it enables processes to be carried out irrespective of normal weather conditions. For instance, in hospital Operation Theater, the air is filtered to reduce infection and humidity is control to prevent patients' dehydration. Moreover, indirectly air conditioning has increase human efficiency. Researchers have found that comfort conditions play a significant role in working capacity. Thus, in offices or industries having machines generating heat, workers are less uncomfortable, they irritate and sweats less and are therefore, more prone to work.(Source: 'Advantages of Air conditioning' Downloaded from http://kimtonltduk.wordpress.com/2008/01/07/advantages-of-air-conditioning/ as at 18th November 2010). In an economic point of view, the air conditioning industry has created jobs around the world. For instance, Carrier's company as to date employs more than 45000 employees around the world and hence, making those people employed in this industry earn a living and increase their living standards. The following diagram below can be useful in explaining how entrepreneurship skills have helped to increase living standards through problem solving process.

Problem with previous cooling methods.

Process of generating new ideas, That is creativity

Implementation of the idea That is innovation

Mass production of Air conditioning units : commercialization and dispersion.

Brings benefits to both firm and individual leading to economic development.

In a nutshell, one can hold that Willis Haviland Carrier was a great entrepreneur since he enables a wave of innovation to take place in this ever changing world. His invention is considered as a breakthrough in the cooling industry. Carrier exhibited a kind of focused reliance on his experiments, combined with a lively vision and imagination that powered the industry. It is clear that air conditioning has made the world a better place to live and to work. It has not only benefited people individually but rather allows processes to be carried out in other industries which benefited the world a century later. Although today air conditioning is at the center of every environmental debate, it can be noted that as days and years pass by that 'greener' units are being produce, that is, engineers are constantly innovating the product. Undoubtedly, air conditioning nowadays occupies a significant role in many people lives and it is a tool which cannot be obliterated from people.