How Entrepreneurship is an Innovation Process

Entrepreneurship is an innovation process.

Schumpeter (1934) describes this distinct feature of entrepreneurship that involves with innovating a product with which consumers are not yet familiar or a new source of raw materials or a new market either to unexplored or a new combination of means of production or a new way of operation not yet applied.

Thus, entrepreneurship foresees the potentially profitable opportunity and tries to exploit it in a new and better way.

Wilken (1979) summaries a list of innovative activities entrepreneurship does. They are shown below:

1. Initial expansion- Original production of goods.
2. Subsequent expansion- Subsequent change in the number of goods produced.
3. Factor innovation- Increase in supply or productivity of factors.
   • Financial- Procurement of capital from a new source or on the new farm.
   • Labor- Procurement of labor from a new source or of a new typo; upgrading existing labor.
   • Material- Procurement of old material from a new source or use of a new material.
4. Production innovations- Changes in the production process.
   • Technological- Use of new production technique
   • Organizational- Change of form or structure of relationships among people.
5. Market innovations- Changes in the size or composition of the market a Product.
   • Production of new good or change in quality or cost of existing good.
   • Market- Discovery of a new marker.