Innovation and Entrepreneurship are the Weapons of Growth

 Innovation and Entrepreneurship are the Weapons of Growth 

I strongly believe that innovation and entrepreneurial activity are the weapons of long-run economic growth. The company Toys “R” Us strategy of establishing large warehouse-style toy stores and then engaging in heavy advertising and price discounting to sell the merchandise can be classified as an innovation because it was the first company to pursue this strategy. Similarly, the development of mass market online retailing by “amazon” can be seen as innovation. Innovation and entrepreneurial activity help increase economic activity by creating new products and markets that did not previously exist. Moreover, innovations in production and business processes lead to an increase in the productivity of labor and capital, which further boosts economic growth rates. 

Innovation is also seen as the product of entrepreneurial activity. Entrepreneurs first commercialize innovative new products and processes, and entrepreneurial activity provides much of the dynamism in an economy. For example, the U.S economy has benefited greatly from a high level of entrepreneurial activity, which has resulted in rapid innovation in products and process. Firms such as Google, Amazon, Facebook, Dell, Microsoft, Oracle and more.... were all founded by entrepreneurial individuals to exploit new technology. All these firms created significant economic value and boosted productivity by helping commercialize innovations in products and processes.  

So, if a country’s economy is to sustain long-run economic growth, the business environment must be conducive to the consistent production of product and process innovations and to entrepreneurial activity.