Innovation is the means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth. Innovationist one of the major functions of entrepreneurs. Schumpeter concludes that if creativity is the major functions of entrepreneurs. Schumpeter concludes that if creativity is the seed that inspires entrepreneurship, innovation ist the process of entrepreneurship.

Innovation implies doing new things or doing things that are already being done in new ways. It may occur in the following forms:

(i)    Introduction of a new product or new quality of an existing product.
(ii)    Introduction of a new method of production of distribution.
(iii)    Opening of a new market.
(iv)    Conquest of a new source of raw materials.
(v)    New form of organization of industry.

The innovation trait of the entrepreneur greatly helps in the process of  economic growth as discussed below :

The developing countries always need something new. By introducing new goods or services in the market, the entrepreneur creates new demand in the market. Introduction of new goods will also create additional demand in the market. The economic activity is directly linked to demand. When there is demand for goods the productions processes will be operating. The running of industrial enterprises will mean engaging of various factors of production. The introduction of new goods will bring fresh demand and increased industrial activity. The economic growth will take place when industrial activity is progressing.

The second factor in innovation is the introduction of new methods of production. The new methods of production can be possible with the introduction of new technology. The old methods or techniques may not remain cost effective and economical. The new method of production will accelerate the rate of production and the products will also be of goods quality. TH innovating entrepreneur will always be on the look out of finding new and better methods of entrepreneur will always been the look out of finding new and better methods of production. This will not only maintain the economic growth but will also increase it.

A creative entrepreneur finds new markets where there is a great potential for existing or new products. The new markets an be within the country or outside it. The entrepreneurs should always strive to search for new markets. The production will be increased only when new demand comes for 3the goods and services. Since economic growth is linked to the level of industrial activity, the latter should be increased to increase the former.

The innovative entrepreneur tries to improve the things on the supply side also. He takes steps to find out new sources of supply. There may be new sources of raw materials or other inputs needed for production. TH new suppliers can also help in bringing economics in cost and enhancement of quality of products. Unless and otherwise the entrepreneur keeps pace with the changes, he will not be able to maintain the rate of growth The new sources of supply may also mean be able to maintain the rate fo growth. The new sources of supply may also mean that inputs which were not tried earlier are used now.

Industrial re-organization also helps in improving the pace of economic development. Re-organization is normally undertaken when better method of doing the same work are available. Re-organization can be in the organization structure managerial set up, employee relations, plant labour, methods of production etc. the main purpose of re-organization is to increase efficiency and productivity. Economic progress is continuing activity and needs to be increased as every level.

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