Last Updated 02 Aug 2020

What Is the Role of Innovation In Entrepreneurship?

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Research Aim: This aim of this study was to explore the role of innovation in the context of entrepreneurship. The main investigated areas were related to the key factors that affect the development of innovation. Furthermore, this research was focused on the exploration of the actual concept of innovation and its possibility of transformation.

Methodology: This study was based on the integration of the secondary research. Practical evidence demonstrates the main secondary evidence in relation to the Facebook case study.

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Findings: The main findings demonstrate that innovation is not necessarily sourced from a discipline. To a large extent, it requires creative thinking and environment. Furthermore, it has been found that the process of innovation is not always structured. This suggests that in some cases, there are elements of experimentation and accident.


This paper looks at the investigation of innovation in the contemporary business world. In details, this paper includes exploration of the actual concept of innovation within the context of entrepreneurship. This research will focus on the examination of Facebook and its founder, Mark Zuckerberg. This would serve as the practical evidence of the innovative product and/or service that has formed the contemporary social media business. Rogers, (1998, p.6) has defined innovation “as the process of introducing the new ideas to the firm which result in increased firm performance” . Within the context of this paper, innovation is attributed to the new social media product that has been invented and, therefore, resulted in the startup and further success of Facebook as a company. This has been a transformational innovation since it resulted in the transformation of the interactive, social media platform. This paper will discuss the actual process of this transformation. This implies that the majority of individuals have been reluctant to adopt the innovation, after its initial introduction (Rogers, 1998). At the moment, Facebook has already around 1 billion subscribers worldwide, who update their statuses, on a daily basis. Mark Zuckerberg, the founder of Facebook, is one of the greatest entrepreneurs of the modern times. Facebook employs around 3,200 employees and is known worldwide. The company’s market value is $ 75 billion-$ 100 billion (Hoovers, 2012).

This study will investigate the main factors that innovation should possess, and the reasons behind its success among the consumers. The main critical analysis is going to be presented in the literature review. This will lay the foundation for further investigation. Practical evidence will demonstrate the case study in relation to the researched theories. Finally, the findings from the literature review and practical evidence are going to be juxtaposed in the analysis section.

Literature Review

Recent research suggests that innovation is an outcome of creativity. This implies that innovation may occur, when a person realizes stimulating and new ideas, which he or she, has (Austin, Devin and Sullivan, 2012). Some companies tend to shape the work environment in order to produce the conditions that work well in terms ofthe development of the creative ideas. This is primarily associated with the integration of the particular practices, which allow the person to relax, and, therefore, generate ideas. Hopkins, (2010) suggests that innovation is a discipline. This implies that management of innovation may be compared with management of quality, where each detail is essential. This also implies that, after generation of the idea, it is important to focus on the efficient development of production, supply chain, distribution and marketing. The process of innovation development is also interlinked to the production of business model. It is especially intensified in the context of entrepreneurship. Drucker, (2002), suggests that innovation is sourced from the knowledge and hard work. This suggests that in order for innovation to be successful, it is necessaryto monitor the market, to interact and seek out opportunities to seize. As a result,, there is a small chance for accidental innovation that might emerge (Austin, Devin and Sullivan, 2012). However, given the conditions of contemporary market and situation, this chance is slim. This is correlated to the evolutionary theory, which suggests that the process of innovation production is interlinked with the dynamism of the environment and acquired knowledge and skills. Furthermore, it was added that the success of innovation is sourced from the learning abilities and behavioural traits of the entrepreneur. This implies that the values, cognition and the aims of the individual directly impact the process of innovation development (Metcalfe, 1998; Dosi, 1997).

According to complexity theory, Anderson, (1999) states that the creative ideas are sourced from the environmental changes. This suggests that individuals and companies tend to take into account the environmental dynamism, thus shifting their perceptions, according to the global and/or domestic changes. This is further interlinked with the evaluation of the information, which is sourced from these dynamical changes. This, in turn, results in the development of the innovations. This theory is based on the estimation that the innovation should evolve, as part of the constant environmental dynamics.

Contrary to this, Brown and Eisenhardt, (1998) suggest that innovation is driven by experimentation rather than evolution. This implies that the individual should always experiment, in order to create some innovative solutions. This is attributed to the “trial and error” pathway. This pathway is regarded to be quite effective as demonstrated in the recent research. It is primarily interlinked with the hard work and discipline, which is noted in the study by Hopkins, (2010).

Damanpour, (1992) disagrees and states that there is no definite practice that would allow efficient production and management of the innovative products and/or services. This suggests that there are four main factors that affect the possible success of the innovation. These factors are attributed to the type of innovation, stage of innovation, scope of innovation and organization. Given the technology industry, the scope of innovation is not easy to define at the startup stage of innovation.

It has been identified by Rothwell and Dodgson, (1995) that there is a small difference between the development of innovation in small companies and large corporations. It has been estimated that the process of innovation development in small companies tend to be of a behavioural nature, whereas in large corporations – of a materialistic nature. Additionally, it has been added that the process of the development of innovation in the smaller companies tends to be dependent on the industry. It is assumed that, in the technology industry, the degree of innovation’s success is increased, due to the large pool of opportunities. However, as Hopkins, (2010) has pointed out, it does require a discipline. Freeman and Soete, (1997) agree that the innovative products and services depend on the scope of R&D activities. This suggests that there is a greater chance for larger corporations to implement the innovation, due to the large available funds. However, as the recent research demonstrates, there are a lot of entrepreneurs, who have been successful in production of innovation with limited investments (e.g. Mark Zuckerberg; Steve Jobs).

Littler, Leverick and Bruce, (2003) argue that the innovative product development is associated with high risk, which is dispensed across the production and Research and Development areas. As the result, it has been proposed in the same source that increased collaboration is required in order to achieve the objectives, in relation to the innovative solutions product. These scholars have also added that the main factors that affect the increase of the risk degree is attributed to the utilization of the new technology.

Practical Evidence

This section focuses on the presentation of the practical evidence of the key theories that have been analysed in the literature review section. This section is based on the integration of the case study about Facebook and its founder, Mark Zuckerberg.

Mark Zuckerberg, 28 is the founder of the world’s largest social networking website, Facebook. It was launched back in 2004, in the dorm room of Harvard University (CrunchBase, 2012). Prior to this, Mark Zuckerberg has tried to launch another two programs, namely a music recommendation program, Synapse and peer-to-peer client, Wirehog. However, he left them at the startup point (TechCrunch, 2012). Along with that, Mark Zuckerberg also launched Coursematch and Facemash programs during his studies at Harvard University. Facebook was originally developed for students to interact, however it has been further extended to a global scale. As a result, Facebook has become a success internationally (New Yorker, 2010).

Prior to the development of Facebook, Mark Zuckerberg studied computer science, however, he has another degree in psychology. This suggests that he understands both the computer technology and human behaviour (New Yorker, 2012). With regard to the personal characteristics, Mark Zuckerberg has been described as quiet, unassuming gentleman, who focuses on hard work and achievement of the objectives. This shows that he doesn’t take anything for granted, thus focusing intensively on further development of Facebook operations. To date, Facebook has generated $1.26 billion, however, it has reported a recent loss, which is associated with the inability to develop the mobile advertising sector (CNCWorld, 2012; Information Week, 2012). The primary source of income is attributed to the advertising since Facebook is free to subscribe. This implies that there is still room for improvement in the mobile advertising area, whereas the main competitors already enjoy the generated profits from this sector. The mobile advertising area has been overlooked by Mark Zuckerberg, given the recent rise in the access to the Internet from mobile phones (New Media Trends, 2012). This implies that the modern consumers tend to utilize the mobile applications more, which is supported by the recent data that states that the number of mobile Internet users has doubled. Information Week, (2012) demonstrates that there have been 75 % of social networking users, who have accessed Facebook via their Android-supported mobile devices in U.S.A, in March, 2012. Facebook management agrees that there is still a room for development however, the main problem is attributed to the inability to provide high resolution advertisements on small mobile screens (Information Week, 2012).

This is assumed to be surprising, in the light of Mark Zuckerberg’s ability to develop the new social media platform, during the rise of the Internet. This implies that Mark Zuckerberg tends to seize the opportunities, once they arise. The main aim of Facebook, to date, is regarded to be a willingness to make the globe a more open place, by means of social interactions (New Yorker, 2010). However, contrary to this, Mark Zuckerberg, himself, is characterized as being private, thus not sharing a lot of information about himself. This is supported by the fact that he does not give a lot of interviews and/or make public appearances (CrunchBase, 2012).

With regards to the work environment, that is managed in Facebook headquarters, it has been estimated in the recent research that the workers are driven to educate themselves while working. This is interconnected with the fact that Facebook was founded at the University so, Mark Zuckerberg is trying to transform the workplace into the educational institution in order to drive the creativity’s emergence. The design of the Facebook offices promotes openness as the key feature of Facebook program (Business Insider, 2009). This implies that employees are not limited by the cubicles’ boundaries. Additionally, the working hours are flexible. This suggests that the employees may choose their own hours in order to deliver the best product solutions possible. Furthermore, Mark Zuckerberg tends to promote openess in interaction, suggesting that the employees are able to walk around the headquarters, thus interacting with others (Business Insider, 2009). The main aim of this is to promote the development of the creative ideas, which would be applicable to the Facebook (Business Insider, 2009).

Along with that, the main negative comments have only been attributed to the distant location of the Facebook headquarters. Additionally, some employees have stated that it is difficult to concentrate while working in the open areas. Therefore, the promoted openess does not work for everybody (Business Insider, 2009).


This section is based on the production of the links between the main theories and the key findings, derived from the practical evidence.

It had been estimated that Facebook was developed, during the period, when internet, as a communication channel was starting to gain the popularity amongst the public (New Media Trends, 2012). This shows that Mark Zuckerberg had been following the evolutionary theory related to the innovative development and given his specialized knowledge and learning abilities, he scanned the environment for opportunities and dynamic changes (Anderson, 1999). In 2004, there was a limited amount of social networking platforms, presented on the market that would allow enjoyable social interaction. As a result, he developed Facebook in order to meet the educational needs, with the limited resources available. It was based purely on the knowledge and skills he had obtained. One of the main benefits was that he could combine his technology-related knowledge with the education degree he received in psychology (Time, 2012). This has allowed the development of the social networking platform that would suit the needs of consumers.

Furthermore, the theoretical frameworks suggest that there is supposed to be a creative and relaxing environment in order to produce the innovative idea. At that time, Mark Zuckerberg has been studying in the university, which suggests that he was associated with the young and educated people with a lot of aspirations (New Yorker, 2010). Normally, in this environment, the most innovative ideas are born, so, this supports the theoretical evidence.

Evolutionary theory is also supported by the fact that Mark Zuckerberg also tried to integrate other social media products but he failed to succeed with some of them. This demonstrates a certain degree of learning, integrated in the process of the innovation development. This implies that after the failure of his previous innovations , he has advanced the process of innovative solutions production, based on the mistakes he had made (CrunchBase, 2012). Additionally, the process of innovation production has been supported by the acquired and/or natural behavioural traits of the entrepreneur. This suggests that Mark Zuckerberg has always been a hard worker whilst eliminating the need “to take everything for granted” (Time, 2012). Therefore, he has always been focused on the achievement of his objectives.

The elements of the accidental innovation may be followed once Facebook had become popular outside the university. This shows that, despite the primary educational objectives related to the Facebook platform, Mark Zuckerberg accidentally met the needs of a wider international audience (Austin, Devin and Sullivan, 2012). This was the starting point of Facebook’s success. At the moment, being a large corporation, Facebook constantly updates the website with new applications, as a result of the evaluation of the consumer needs and environment. However, some subscribers tend to be confused with the constant changes that Facebook integrates (Guardian, 2010). In this case, the aspects of experimentation are demonstrated. These can be traced inthe theory of “trial and error”, which suggests the evaluation of the most profitable products and services based on experimentation (Brown and Eisenhardt, 1998). This is proved to be effective, however it also drives a large degree of confusion amongst the subscribers.

Another critical aspect is attributed to the problem with the mobile advertising, which has resulted in the decrease of the revenues of Facebook, recently (Business Insider, 2012). This suggests that management of the company failed to scan the environment in order to integrate the necessary solutions with regards to the emergence of the new trend. As the result, this has negatively resulted in the poor company’s performance (Business Insider, 2012). This is said to be especially surprising, given the ability of Mark Zuckerberg to seize the opportunities and the scope of the modern Facebook corporation. This is supported by the literature review findings, which suggest that it is much easier for larger corporations to integrate innovative solutions due to the large funding available for Research and Development activities (Freeman and Soete, 1997). In this case, at the moment, Facebook failed to do that.

Recent data demonstrates that another reason behind this, is attributed to the lack of clear strategic vision. This implies that Mark Zuckerberg aims at the delivery of accidental innovations rather than the result of a clear strategic vision (Business Insider, 2009). He expects the innovation to appear as a result of the management of the creative environment.

It has been estimated in the literature review that it is necessary to promote the discipline during the process of innovation development (Hopkins, 2010). However, with regards to Facebook’s work conditions, it is not necessarily applicable. This implies that the company aims to integrate open interactions and flexible working hours. This is said to be appealing for the majority of employees. However there are some employees, who state that it is hard to concentrate while working in this sort of environment. As a result, Facebook aims to promote the casual and relaxing environment, which would allow development of creative solutions.


This paper was aimed at discussing research on innovation within the entrepreneurship context. It focused on the exploration of the Facebook case and its founder, Mark Zuckerberg. The main theories have indicated that there are several patterns of innovation development, namely accidental innovation production, evolutionary, experimental and complexity theories. The Literature review has also demonstrated that environment also plays a large role in the process of innovation development. Other scholars suggest that the success of innovation depends on the entrepreneur’s personal characteristic and actual characteristics attributed to the innovation. The main findings, based on the analysis of one of the greatest entrepreneurs, have demonstrated that the innovation’s production process incorporates elements of accidental process and both experimental and evolutionary processes. Additionally, it has been estimated that the dynamics of the environment and personal characteristics of the entrepreneur tend to play a large role in relation to the worldwide success of the innovation. However, it is essential to further update the innovations in order to stay on the market. This, in turn, may also incorporate the elements of the experimentation. However, one of the main factors is related to the ability to seize the opportunities.


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