The Common Aims Of An Entrepreneurship Commerce Essay


Entrepreneurship is one of the most common words used in the business world but yet, it is so difficult to give it an exact definition. Entrepreneurship in its broad sense relates to the actions of entrepreneurs and their relative impact on the economy. The role of the entrepreneur usually involves the allocation of resources for production, management of work, decision making and risk taking. According to Joseph Schumpeter, innovation which involves finding new combinations of factors of production, new products and processes is an important feature of entrepreneurship and is seen to promote economic growth and development through creative destruction which refers to the creation of new markets and the closing down of inefficient ones. Creativity also comes to play an important role as it is a necessary condition for innovation. One can neither exclude the process of problem solving since in order for the creative process to begin, there needs to be a problem that requires a solution (Andriopoulos & Dawson, 2009). To better understand the relationship between these five concepts: entrepreneurship, economic development, innovation, creativity and problem solving, let us refer to the mobile phone business in the world economy.

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Mobile phones are very useful electronic devices that allow people to communicate, by either talking or sending messages. Mobile phones have brought about a significant change to the communication industry and are somehow an important sector in the business world of today. The first mobile phone was invented by Martin Cooper in 1973. Since then, after 10 years, the mobile phone business has evolved and brought about many changes with it. Prior to the development of mobile phones, people used walkie-talkie and more commonly landline phones as a means of communication until today where mobile phone is one of the most popular piece of technology. According to Joseph Schumpeter, the nature of changes upon innovation could be either gradual or discrete (Lumsdaine & Binks, 2007a). The nature of the change from landline phones to mobile phones is discrete. In other words, mobile phone is a disruptive innovation since it is disconnected from earlier versions - it cannot be linked to the previous incarnation by small gradual step changes. It shows a break from existing established technology and improves the market in a way that is not expected focussing on new sets of customers. Disruptive innovations such as the mobile phone in this case, can be successful only if these businesses have excellent research and development (R&D) and are responsive to their customers. Therefore, emphasis should be made on the changing global cultural trends and socio economic factors to be able to understand the people's wants.

The mobile phone business since its creation has been very successful because of its positive and fruitful creativity and innovation where entrepreneurs and businesses have been able to move production in a way to satisfy consumer wants and the different other stakeholders: suppliers, government, communities and the society. Moreover the creation of mobile phone has largely helped overcome the different problems faced by the earlier versions means of communication such as landline phones and walkie-talkie. For instance, with landline phones, there was no mobility - people could not make a call from anywhere. Moreover, landline phones did affect the internet connection at home and at work. In addition to these drawbacks, one has to contend himself with limited signal, poor worldwide coverage. Furthermore, only those after retirement age or living at home would find landline phones useful. On the other hand, businessmen, workers, students, people travelling a lot would need a better means of communication system. Even though walkie-talkie was similar to the mobile phone, its features were very limited and were used mainly for military purposes.

The creation of the mobile phone by Martin Cooper was therefore important and today the most famous manufacturers of mobile phones include Nokia, Samsung, LG, Sony Ericsson and others. In the context of entrepreneurship, it is creativity that leads to the development of new products which when innovated replace the traditional and previous version (Lumsdaine & Binks, 2007b, p.19). From an entrepreneur's perception, creativity can be fulfilled if one thinks out of the box, referred to as lateral thinking. Lateral thinking techniques help entrepreneur to come up with brilliant and original solutions and can help generate completely new concepts, ideas and improvements to existing systems. Similarly, in April 1973, Martin Cooper applied lateral thinking in his work and created the mobile phone. The latter wanted people to be able to carry their phones with them anywhere and along with Motorola, he set on a project to create the first mobile phone. In an interview on BBC World he said:

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Finally after years spent in research and development (R&D) in portable devices and in new technologies, Cooper succeeded to produce the first mobile phone in only 90 days! It was a Motorola Dyna-Tac weighing 2.5 pounds costing around $4,000 and the first call was made by the inventor himself to his rival Joel Engel from the streets of New York City. (Source: "Martin Cooper - Inventor of Cell Phone" Downloaded from as at 16th November 2010). The phone was invented in 1973 and after 10 years, by 1983, after bringing about some changes, Cooper offered the product on the market. The process of innovation of the mobile phone resulted in a positive outcome since its invention and creativity have ultimately resulted in a useful product which have been commercialized and widely spread. For Martin Cooper, the reason behind this success was the motivation and passion to take over the largest company in the world AT&T. When asked what made innovation of the mobile phone such a success, Martin Cooper replied that it was a combination of the vision of people (mobility among people and good communication), technology (integrated circuits, synthesizers, antenna, packaging techniques) which were devoted to produce the cellular phone. (Source: "History/Science Project Q&A Martin Cooper". Downloaded from as at 18th November 2010). Moreover, from 1983 till the end of the 1980s, cell phones became more popular because of the innovation made in cellular networks where it was able to handle phones in any area and hand them off in another place. Mobile phones from the 1990s were considered as being second generation (2G) and more innovation in these resulted in better network signal, increase in the quality of call and they were much more portable since there had been a reduction in their size. Third generation mobile phones (3G) are the cell phones available today with more features such as internet access, email, radio, Wifi. (Source: "History of Cell Phones" Downloaded from as at 20st November 2010).

Innovation continues to take place in the mobile phone business where they came up in different designs, shapes and sizes accompanied by new features such as Bluetooth, media player, Mp3 player, megapixel camera, and wireless transfer. Today, people contend themselves with touchscreen mobile phones. Sometimes mobile phones are referred to as smartphones since they offer more advanced computing ability and connectivity. Innovation is said to be a key driver of economic development. Following Schumpeter's concept of innovation, the successful entrepreneur will promote the growth of a large firm that will eliminate by competition the less efficient, risk-averting firms in an industry, explaining Schumpeter's idea of creative destruction, which suggests that the opening up of new markets will destroy and close down old and existing ones. In this way, creative destruction is largely responsible for the dynamism of industries and long run economic development (Lumsadaine & Binks, 2007c).

Entrepreneurship has a very important role to play in the economic development of a country. One of the most crucial role played by the entrepreneur in a country's economic development is that it has made people of both developed and developing countries realize the importance of entrepreneurship in economic development. This has greatly helped to explore the great potentials of an economy's resources: labour, capital and technology. It should also be emphasized that innovation has made a large contribution to economic as well as social development. (Source: Renjith R.P. "Role of entrepreneurship in economic development" Downloaded from as at 15th November 2010). When risk taking is encouraged, competition is rigorous in an economy and innovative activities are being undertaken in entrepreneurship businesses, this dynamic environment can lead to motivation and better success in business. Similarly more research, competition, risk taking in the mobile industry since past times up till now have lead to the creation and innovation of different types of mobile phones. They come in different designs, colours, their capacity are increasing day by day, and new features are being added every two days. Based on the concept of creative destruction, Schumpeter formulated his theory of long waves in business cycles and economic development. Business cycles are the result of innovation - creation and implementation of a new idea or product leading to growth of the economy thus raising employment and also the profits of the innovative enterprise. Similarly, since the creation of the mobile phone in 1973, innovation in the product has lead to economic development in the sense that large and numerous mobile phone companies have been set up in different parts of the world employing millions of people and generating large profits. (Source: United Nations Conference on Trade and Development (2005) "Entrepreneurship and Economic Development: The Empretec Showcase". Downloaded from as at 9th November 2010). Some of these successful mobile phones manufacturers are Nokia, LG, Motorola, Samsung, Sony Ericsson.

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Moreover, growth has been driven by new technological advance, and knowledge acquired through large research and development. From an empirical approach, that is, based on experience and experiment, the relationship between entrepreneurship and economic development can be explained by the Global Entrepreneurship Monitor (GEM). The GEM is a research program launched in 1999 which provide annual assessments and statistical data on the national level of entrepreneurship. It analyses the links between economic development and entrepreneurship. In a late report in 2002, GEM shows that entrepreneurship and economic development are always positively related and that there are no countries with high level of entrepreneurship and low level of economic development. (Source: United Nations Conference on Trade and Development (2005) "Entrepreneurship and Economic Development: The Empretec Showcase". Downloaded from as at 9th November 2010). Similarly the mobile phone business have continued to progress since Cooper created it thanks to the large contribution of the entrepreneurs including Cooper who have made large investments in the innovation of the product which have produced a positive impact on the economic world.

Throughout this work, one can have a better idea how the creation of the mobile phone in 1973 has made the product an important indispensable piece of technology in today's world. The major factors which have contributed to make this industry successful are creativity which has lead to the successful innovation of the idea and eventually led to an improvement and development of the economy. The key factor of creativity, innovation and economic development is entrepreneurship - the roles and important actions of the entrepreneur to make these three concepts realistic. Without the entrepreneur, no better innovation could have been made in the business world and hence no better economic development.