Sport Innovation

The Benefits of Innovation and Entrepreneurship to Society 

Innovation is essential to the economic development of any company, region or country. As new technologies emerge sales of old products decrease and old industries become irrelevant. Innovation can therefore be viewed as the building block of any economic unit and an important element in the process of entrepreneurship.

The four benefits of innovation and entrepreneurship that will be analyzed are, the encouragement of economic growth, the contribution made to national income, the

creation of social change and the impact of entrepreneurship on community development (The encouragement to economic growth will be examined in more detail than the other areas).

Benefit 1: Entrepreneurship promotes Economic Growth

Innovation allows entrepreneurs to develop new technologies, products and services that are the foundation for future economic development. Entrepreneurship also promotes competitive rivalry among firms in a similar industry; this rivalry encourages firms to be more competitive and enables their continued growth in market share. This competition results in increased productivity by individual firms which in turn enables the productivity of economies.

Ed Sappin (2016) identifies seven (7) ways in which entrepreneurs are able to encourage economic development. He first investigates how investing in products and services that people need leads to economic growth. Entrepreneurs provide new products or services to cater to needs or demands that have not been met by the market. Entrepreneurs that take advantage of these opportunities foster economic growth by giving the public access to goods and services that encourage/promote productivity.

He also speaks about the impact of entrepreneurs developing new businesses in response to market needs. These businesses uplift communities when they provide jobs which increase the standard of living and improve the quality of life of the citizenry.

    The author proceeds to mention increased commerce and regional economic integration as a consequence of new businesses generated when goods and services are exported to  neighbouring regions; there by  directly contributing to that region’s increased productivity and economic activity. He points out that this interregional trade also has the effect of promoting the welfare of the population by improving the transportation and physical infrastructure. Globalisation means that national and  regional trade has expanded to international markets.

The development of new technologies through the process of innovation has also been identified as an important benefit. Innovation transforms new ideas into new products and services and therefore forms an important part of the entrepreneurial process. This entrepreneurial process is the foundation of prosperity in any country.  Sabbin supports this argument by the fact that historically periods of economic prosperity have been preceded by periods of significant innovation. As a result of this, the ability to innovate has been called the greatest natural resource. He however notes that innovation requires a knowledagble population and an environment that promotes collaboration. 

Contemporary society is faced with monumental environmental challenges such as combating climate change, reducing gas house emissions and maintaining the biodiversity of the environment. Innovation as part of the entrepreneurial process offers solutions to problems such as renewable energy, irrigation and infrastructural development. Innovation therefore assists in increased productivity and the enhancement of economic development.

By being innovative, entrepreneurs also contribute to socio economic development. By creating new ways to eliminate waste in the health and social systems they help improve both the economy and the standard of living of the citizenry. There is therefore irrefutable proof of a synergy between economic development, innovation and entrepreneurship. 

Benefit 2: Entrepreneurship makes a contribution to National Income

When they develop or improve on new products, services and technology, entrepreneurs create new wealth and develop new markets. This leads to increased employment and salaries which all lead to the government’s ability to derive revenue from higher taxes and increase spending on societies wants and needs

Benefit 3: Entrepreneurship creates Social Change

When entrepreneurs offer a unique approach or solution to developing a new product, or improving on an existing product, they break from old established way of doing things. These actions foster social change by developing new systems and technologies that improve the quality of life of citizens and establish what can be described as “ a new normal”.

Benefit 4: Entrepreneurship helps with Community Development

Entrepreneurs often invest in new and innovative products developed by other entrepreneurs. Many also support charities or local projects as part of their corporate social responsibility. Hugely successful entrepreneurs have been known to invest large amounts of their resources to help solve world problems such as fighting hunger, starvation or disease. 

Though the main benefits of innovation and entrepreneurship are related to economic development; its impact is also felt in the areas of social and community development.  Research has shown that innovation and entrepreneurship improves the quality of life of individuals and communities it therefore can be considered an essential element in the development of any nation.