Entrepreneur as Inventor (MIS Bulletin, September 2008)

oleh Juan Mahaganti pada 05 Mei 2009 jam 9:23

Maybe some of you think that only scientists invent many inventions and ideas that change our world. Or some of you may think that scientists play the greatest role in developing our technology. If that is your assumption, you might be wrong. There was an Austrian born economist, Joseph Schumpeter who argues differently. According to Schumpeter, the entrepreneur is the one that plays a greater role in innovation. Before we go on, what is an entrepreneur? An entrepreneur is a person who owns a company, enterprise, or a venture, and assumes a significant accountability for the inherent risks and the outcome (Wikipedia.org). So, if your parents own a business or employ others to run a business, your parents are entrepreneurs.

Schumpeter popularized the theory of creative destruction in the economy. Creative destruction is used to describe the process of transformation that accompanies radical innovation. In Schumpeter’s vision of capitalism, innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies that enjoyed some degree of monopoly power (Wikipedia.org). In simple English, an entrepreneur promotes innovation (i.e. new products, communication, transportation, management method etc.) through investment. It was called destruction because every invention will later be replaced (and destroyed) by another invention, invented by business entity leads by entrepreneur. For example, the telegraph replaced by modern form of communication like telephone and the cell phone. So, invention of the telephone destroyed the telegraph. I think some of you don’t know what telegraph is. It shows that telegraph has been “destroyed” by newer technology. Entrepreneurs invent, or pay inventor so later they can gain more profit from the invention. That is why now we have IPod (by Apple Co.) or Windows (Microsoft) and many other technologies that shape our life.

Thanks to scientists, and also entrepreneurs, we can enjoy the ease of life offered by technology.