Best Development and Growth Theory in Entrepreneurship

In 21^st century, we are already in the era where almost everything we need, we want and we like are available and within reach. Perhaps, we have to take into accounts that all of these are because of the past and present researchers, inventors, theorists and scientists.  While reflecting the world around us, I come to realize that these are all innovations as a result of our “Malikot na pag iisip”( Critical and analytic thinking) as what they say in Filipino language brought about by the needs of the society. With this, I consider a development and growth theory that has an objective of innovation as a best theory in entrepreneurship and economic development, and that is Schumpeter’s theory of Innovation.

Schumpeter’s theory of economic development is a pioneer work of economic development. it urges development by creating a new combination of entrepreneurship. According to Schumpeter, an entrepreneur is one who perceives the opportunities to innovate and creates new methods of enterprising. In his views, the concept of new combination leading to innovation covers the five (5) cases:

1. The introduction of new products that the community is not familiar with.

     2. The introduction of new methods of production,

     3. The opening of new market,

     4. The conquest of new source of supply of raw materials,

5. The carrying out of new organizations like creation of monopoly.

According to him, the introduction of new products and continuous improvement of the existing ones will lead to development. I consider this theory as one of the best theories of entrepreneurship and economic development because aside from its simplicity to understand, it offers ways to start a new business ventures. One of the successful entrepreneurs is Steve Jobs of Macintosh Company. In analysis, he used the five innovation criteria of Schumpeter when he started offering the public his new products. He introduced to the public the smart phones and tablets that the consumers are not yet familiar with. He opened a new market of telecommunications by the use of internet browsing to connect to the world in the cheaper way. Moreover, his expensive products was manufactured mostly in China where the labor costs and material costs are far cheaper than in America, where he is based. He also immediately applied for patency rights to create a monopoly of the smart communications. In the end, he was so successful and if we only follow the Schumpeter’s theory, we, in the future, will also be successful.