Reading Head: POLICY INTERVENTION

What are the theoretical and empirical justifications for policy intervention in entrepreneurship and innovation?

Contents

Introduction2

Theoretical Justification3

Empirical Justification3

Policy Interventions4

Innovation and Entrepreneurship4

Joseph A. Schumpeter's Definition5

Schumpeterian Model of Economic Development5

Breaking the Circular Flow5

Policies Intervention in Entrepreneurship and Innovation6

The New Theory of Schumpeterian Entrepreneurship9

Power of Entrepreneurs to Force Innovation and Job9

Innovation Policy11

Schumpeter and Innovation11

Cloud- Based Services11

Government's Role in Innovation12

Innovation in Business technology12

Entrepreneurship and Technological Role14

Conclusion14

What are the theoretical and empirical justifications for policy intervention in entrepreneurship and innovation?

Introduction

Entrepreneurship and innovation are two different terms which is widely used in business and different markets. Entrepreneurship is quite different with innovations. Now a day's different individual starts their new business with different techniques and strategies. They use updated and latest technologies for the development of their business.

Policies and regulations are the most important elements in business structures. Businessmen have to focus on both of them to grow their business and make profit in a legal way. Regulatory bodies (government, taxation dpt. etc) make some policies for the business which helps to establish any venture. This essay includes theoretical and empirical justification for policy in entrepreneurship and innovations related to any business.

Entrepreneurship is widely used term associated with innovation. This implies that innovation and entrepreneurship are closely interlinked with each other.

“Entrepreneurial profit is the expression of the value of what the entrepreneur contribute the production” Schumpeter

Theoretical Justification

Theoretical justification is the knowledge that attempts to understand the justification belief and policies. For example if X makes a claim, and Y then cast a doubt on it, X's next step would be give justification to Y. the evidence, authorities and logical proposals are often use to justify any means.

Empirical Justification

Empirical justifies focus the empirical evidence. It is a source of knowledge acquired by means of experiments, observations and practical work. Empirical evidence justifies the belief in truth or false. Senses are the primary source of empirical evidence while memory and other sources are secondary sources of empirical evidence.

Policy Interventions

Policy intervention is the aim to justify the policy. The policies that serve as the barriers to changed behaviour. These interventions include decisions regarding permit of advertising, social media campaign and so on.

Innovation and Entrepreneurship

Entrepreneurship has recorded as micro driving force of economic development and innovation. Innovation and entrepreneurship are blurry concepts which give several meanings. Entrepreneurs are individuals that carry out new combinations called innovation. (Schumpeter, 1934, pp n.d)

Schumpeter makes out four elements in the procedure of innovations that are

The entrepreneur.

The capitalist.

The manager.

The inventor.

The role of policies regarding innovation is to encourage and facilitate the creation of new ideas.

Joseph A. Schumpeter's Definition

“Renowned individual, who establish innovation, entrepreneur and change that delighted entrepreneur as an fundamental part of economic development. The fundamental source of equilibrium is the entrepreneur”. (Prof. Dr. Harald Hagemann, 2013, p 1-26)

Schumpeterian Model of Economic Development

Source: www.google.com

Breaking the Circular Flow

Joseph Schumpeter, define his model as he starts this model by breaking up the circular flow with an innovation in the form of new product by ...