A Suitable Innovation Type to Improve the Added Value in Entrepreneurship

Subject Areas : General Management

Reza  Radfar ¹ (Assistant Professor, Department of Technology Management, School of Management and Economics, Science and Research Branch, Islamic Azad University (IAU), Tehran, Iran)
Parham  Jahangir ² (Department of Management, School of Management, Islamic Azad University (IAU), Qazvin Branch, Qazvin, Iran)

Received: 2011-12-22 Accepted : 2011-12-22 Published : 2011-12-22

Keywords: Entrepreneurship, innovation, technological changes, value added, Model,

Abstract :

Due to the tough on-going competition between producers of commodities and services, the prices of products are continuously going down nowadays. To avoid bankruptcy in such circumstances, organizations have focused on the application of technological innovations that enable them to respond to the needs of their clients. It is to this end that they attempt to gain the market and increase their sales to satisfy their clients and ultimately, depending upon the innovation, competitiveness and technological advancement, make fortune. Therefore, utilizing economic models, where innovation plays a pivotal role in growth and development has drawn the attention of many policy makers and managers. One of the most important economic models is entrepreneurship model based on Schumpeters theory which states that entrepreneur and enterprises are the engine to drive and generate economy; the establishment of new entrepreneurship enterprises based on innovation and creative destruction to provide value added is a central issue accordingly . The basis for establishing new entrepreneurship enterprises is discussed form five angles in Schumpeters theory. This includes innovation in offering new product, the production processes, making changes in raw materials and cutting prices, seeking new markets and developing the organization. However this theory has not any methodology to determine of types of the best innovation to create the most value added; this paper intends to develop Schumpeters theory through presenting an entrepreneurship model. The results shows that enterprises can attain the best type of innovation and make the most value added in their entrepreneurship projects, if they scrutinize their contingency conditions and fit them into the selected model. Last but not least, this model is suggested to active enterprises as internal entrepreneurs.

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