Entrepreneurship and
innovation management in

emerging economies: a
review

El espíritu empresarial y la gestión de

la innovación en las economías
emergentes: una revisión

José Luis López Salazar

Licenciatura en Administración de Empresas,
Maestría en Administración de Empresas, Docente

Investigador Escuela Superior Politécnica de
Chimborazo (ESPOCH), Grupo de Investigación
Ideas Factory, Riobamba, Ecuador.

josel.lopez@espoch.edu.ec

https://orcid.org/0000-0003-1012-4472

Diego Marcelo Almeida López
Ingeniero en Marketing, Magíster en gestión

empresarial, Docente Investigador Escuela Superior
Politécnica de Chimborazo (ESPOCH), Riobamba,
Ecuador.

diego.almeida@espoch.edu.ec

https://orcid.org/0000-0001-5860-8308

José Fernando López Aguirre
Ingeniero en Industrias Pecuarias, Maestría en

Administración de Empresas, Docente Investigador
Escuela Superior Politécnica de Chimborazo
(ESPOCH) Riobamba, Ecuador.

josef.lopez@espoch.edu.ec

https://orcid.org/0000-0001-9706-5115

Abstract

The findings of a comparative research study on

entrepreneurial activity in developing economies are
presented in this report. It focuses on providing the core

knowledge necessary for business owners to succeed in the
present business climate.

Imaginario Social

Entidad editora
REDICME (reg-red-18-0061)

e-ISSN: 2737-6362

julio-diciembre 2022 Vol. 5-2-2022

http://revista-
imaginariosocial.com/index.php/es/index

Recepción: 10 de mayo de 2022

Aceptación: 22 de junio de 2022

166-177

167

The regulatory Framework associated with innovative entrepreneurship and the

elements that affect entrepreneurship and innovation has been investigated as part of
this study. Several factors influence the actions of individuals who have the potential

to become business owners. These elements range from the initial impulse of
becoming an entrepreneur to the con, as well as the aspects that affect

entrepreneurship and innovation and tacts required to help solve difficulties as the
business gets off the ground and expands. This study aims to determine the primary

elements that either encourage or discourage entrepreneurial activity throughout the

early stages of the entrepreneurial process in developing economies.

Innovation and entrepreneurship management have become critical to the long-term
success of any business. A global phenomenon and order of the day in this century is

entrepreneurship, which can fuel the economic growth of a country and has genuinely
become a socially and economically phenomenon across the globe. Innovation and

entrepreneurship management are critical competitive advantages to succeed in
today's globalized world. According to research, a company must have strong

entrepreneurship and an equally vital innovation component to thrive in today's

dynamic and constantly changing environment.

Keywords: innovation, Entrepreneurship, management, business.

Resumen

Estos documentos presentan los resultados de un estudio de investigación
comparativa sobre la actividad empresarial en las economías en desarrollo. Se centra

en proporcionar el conocimiento básico necesario para que los empresarios tengan
éxito en el clima empresarial actual. El marco regulatorio asociado al emprendimiento

innovador y los elementos que afectan el emprendimiento y la innovación han sido
investigados como parte de este estudio. Varios factores influyen en las acciones de las

personas que tienen el potencial de convertirse en propietarios de negocios. Estos
elementos van desde el impulso inicial de convertirse en emprendedor, así como los
aspectos que afectan el emprendimiento y la innovación y los factores necesarios para

ayudar a resolver las dificultades a medida que el negocio despega y se expande. Este
estudio tiene como objetivo determinar los elementos principales que fomentan o

desalientan la actividad empresarial a lo largo de las primeras etapas del proceso

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empresarial en las economías en desarrollo. La gestión de la innovación y el espíritu

empresarial se han vuelto fundamentales para el éxito a largo plazo de cualquier
negocio. Un fenómeno global y determinante en este siglo es el espíritu empresarial,

que puede impulsar el crecimiento económico de un país y se ha convertido
genuinamente en un fenómeno social y económico en todo el mundo. La gestión de la

innovación y el emprendimiento son ventajas competitivas críticas para tener éxito en
el mundo globalizado de hoy. De acuerdo a la investigación, una empresa debe tener

un fuerte espíritu empresarial y un componente de innovación igualmente vital para

prosperar en el entorno dinámico y de constante cambio.

Palabras clave: innovación, espíritu empresarial, gestión, empresa.

Introduction

Innovation can be regarded as one of the fundamental prerequisites for business
entrepreneurship in today's business environment. The effective administration of

innovation aids the company in achieving its strategic objectives (Singh & Gaur, 2018).

Managing the organization's innovative practices is known as innovation
management. The ideation phase of the process starts at the very beginning and lasts

through to the project's successful completion. The actions, judgments, and
procedures involved in developing and effectively executing an innovation strategy are

referred to as innovation management. Creating a business that allows corporate
entities to make a profit can be characterized as entrepreneurship. The current study

will help the researcher determine the strategic and competitive advantages business
entrepreneurs have as a result of innovation management and how invention

management systems can help entrepreneurs reach their business goals and

objectives, especially in emerging economies (Leonidou et al., 2020).

This research report aims to examine how entrepreneurship and innovation
management benefit businesses. The research report allows the researchers to learn

more about innovation management's role in creating new business plans and ideas
for increasing profitability. The research also intends to investigate how innovation

management implementation might assist business owners in effectively and

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efficiently achieving their objectives. Analysis of the function of innovation

management and entrepreneurship in the effective operation of the firm is thus the
broad overall project objective.

Finally, the scope of the project is broad since the conclusions drawn from the

literature research analysis can be used in business, highlighting the significance of
innovation management and entrepreneurship in the corporate world. Companies

that use conventional business practices can understand the advantages of innovation

and execute it properly inside their organizations. The project scope aids the
entrepreneurs in determining the many restrictions that prevent the project's

ramifications and conclusions from being applied. The overarching broad range of the
project is the knowledge gained during the research study and its suitable application

inside the business.

Literature Review

According to Berger et al. (2021), "innovation management" is the proper
administration of all the tasks necessary for businesses and entrepreneurs to introduce

new  and  improved  products.  As  a  result,  it  entails  coming  up  with  new  ideas,
developing  them,  and  implementing  them  as  soon  as  possible.  Examples  of  these
activities  include  introducing  new  products  or  internal  business  procedures.

Capabilities, strategies, culture, and structures are at the heart of innovation
management. Since innovation inside business businesses is made possible by the

powers of the individual and the teams, the capacity element of innovation
management is linked to people. The talents also include the distinctive perspectives

of personalities, practical abilities, and the technical expertise that people who work
for the organization have.

According to Haefner (2021), besides the financial capital assets necessary for

innovation development and its correct management, knowledge acquisition and
information capital are also some areas included within the capacity component.
Haefner (2021) argues that an efficient structure is yet another crucial prerequisite for

the business's ability to utilize its new skills and competencies. In actuality, the
infrastructure, corporate frameworks, and organization structures of the company

enterprise comprise the bulk of the structural component. The proper installation

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functions as a force multiplier, making it much easier for the company organization to

welcome innovation and run as needed. For instance, only concepts with the required
infrastructure, decision-making process, and communication channels can claim the

top spot on the list of priorities of innovative ideas.

According to Aslam et al. (2020), the organizational culture is also a crucial
component of innovation management since it affects how well people can learn new

skills. The presence of an innovation-friendly culture makes it possible for businesses

to bring in the best candidates. The culture supports the development of acceptable
behavior while discouraging unacceptable behavior. The culture has a significant

impact on how innovation is managed. The culture emphasizes trying novel
approaches to improving and progressing and values quick learning and

experimentation. According to innovation management, a thriving culture allows
people to embrace their mistakes and failures and sees it as a regular activity within

the innovation management process. The culture offers appropriate flexibility and
responsibility and is fundamentally driven by the desire to do something new rather

than adhering to the predetermined chain of command.

n agreement with Hampel et al. (2020), the innovation management approach aids in

implementing the plan for achieving long-term success inside the firm. The strategy's
primary goal is to help the business choose the most acceptable alternative or idea

from a wide range of workable options. According to the relationship between strategy
and innovation management, innovation aids business firms in achieving their

strategic goals. Sometimes, an "accidental" creation might offer unmatched
opportunities that change the business's overall strategy. Business companies must be

given the necessary independence to innovate and benefit the country,

According to Ahlstrom et al. (2018), entrepreneurship is the willingness and ability to
create, direct, and organize a commercial enterprise to take on the risk necessary to

make a sizable profit. Starting a new business is the most typical illustration of
entrepreneurship. The essential components of entrepreneurship are the inputs—

labor, land, capital, and other natural resources—that enable people to generate a
particular number of profits. A sufficient amount of risk-taking aptitude and
inventiveness can be used to identify the entrepreneurial spirit. Additionally, business

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entrepreneurs who have developed their entrepreneurship skills and abilities can

improve their country's competitiveness and success in the internationally volatile
market.

n agreement with Lewrick (2019) point of view, innovative entrepreneurship is

significant and essential for reducing poverty, fostering economic growth, and creating
jobs. As a result, firms are better able to tackle social issues. Policymakers actively

pursue innovative entrepreneurship to revive growth and overcome the global

financial and economic crisis. Creative entrepreneurship confluences three key areas:
young, rapidly expanding firms, innovative businesses, and small and medium-sized

enterprises (SMEs).

Factors affecting entrepreneurship
Capital

The level of development of a country's financial markets significantly impacts how
quickly entrepreneurship grows in a particular area. Entrepreneurs need money to
launch hazardous businesses and also need it right away to expand them swiftly if their

ideas prove to be successful. So, nations with well-developed systems for delivering
finance at every stage, such as venture capital, private equity seed capital, , and well-

developed stock and bond markets (TurPorcar et al., 2018).

Labor market

For practically any product or service, labor is a crucial production component.
Therefore, the success of the entrepreneurs depends on the accessibility of skilled

workers at affordable rates. However, labor has now become unionized in many
nations. They compel the business owners to pay them more compensation and forbid

other employees from working for less money. Due to the increase in production costs
caused by this, entrepreneurship is negatively impacted.

Thanks to globalization, entrepreneurs now have the freedom to relocate their

businesses to nations with more hospitable labor markets hence the cause of the sharp
increase in entrepreneurial behavior in countries like Bangladesh, China, and India

(Herddijono et al., 2017).

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Infrastructure

Some services are necessary for practically every industry to prosper. These include

transportation, energy, and other services. These services can be considered the
infrastructure needed to establish any firm because they are fundamental. As a result,

if any nation concentrates on improving the effectiveness services mentioned, this will
likely affect the enterprises of practically all entrepreneurs in the vicinity. As a result,

entrepreneurship proliferates in nations with sophisticated infrastructural systems,

and the converse is also true (Canedo et al., 2018).

Of course, the list of factors above is not all-inclusive. It would be impossible to

summarize entrepreneurship in a few main points adequately. The list above does,
however, give a general idea of the kinds of circumstances that may be significant
(Jablonska & Stawska, 2020).

Raw material

Natural resources used as raw material are a vital component of any enterprise, much

like labor. This raw material can be purchased on the market in various nations for a

reasonable price. However, in some nations like Asia and Latin America, selling cartels
seize complete power over these natural resources. They usurp the majority of the
income that the businessman can make by selling the raw resources at inflated costs.

As a result, countries where the supply of raw materials is problematic see a gradual
decrease in the number of entrepreneurial endeavors.

Key policy dimensions for developing innovative entrepreneurship

Access to finance

Youssef Boubaker & Omri (2018) state that the given policy dimensions are mainly
concerned with proper access to the funding required to launch and establish the firm.

Financial leverage, angel investors, venture capital, and a few more types of financing
are some of the numerous financial resources that might be helpful for the

entrepreneur. Additionally, this covers the alternatives for joining and leaving the
market. Economic factors significantly influence new, innovative companies'

development, expansion, and survival, and they are so that businesses can invest in

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creative projects that are highly productive and satisfy market demand. Proper access

to financing makes this possible.

Access to knowledge

The knowledge component of the dimension encompasses knowledge connected to
public, academic, and private knowledge that enables creative entrepreneurship.

Adequacy of access to information includes technical collaboration across

organizations, the interaction between academia and industry, and investments in

R&D and innovation. Access to knowledge also refers to the Internet and technology
(ICT) and the intellectual property system. Since knowledge is the primary source of

opportunity for innovative entrepreneurship, having proper access to it is essential
(Dalmarco et al., 2018).

Market environment

The dimension of innovative entrepreneurship, according to He, Lu & Qian (2019),

primarily deals with various market areas of development, such as access to the home

economy, access to the global market, the level of play, trade restrictions associated

with the product, as well as public procurement. Market access and development are
crucial for innovative entrepreneurship because they help businesses recognize the
opportunities to determine their future success or failure.

Access to skilled labor

The  labor  policy  dimension  covers  the  conditions  business  entrepreneurs  need  to
acquire  highly  trained  people  capital,  including  the  laws  and  regulations  that
significantly  impact  the  price  of  hiring  and  firing  employees  and  the  price  of

immigration and hiring talented workers (Grillitsch & Asheim., 2018).

Regulatory Framework related to innovative entrepreneurship

This aspect is concerned with the government's public policies and regulations that
may impact innovation and the early stages of the establishment of innovative
organizations, such as the Framework established for the growth and entry of new

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businesses as well as laws governing taxation and bankruptcy (Polydoropoulou et al.,

2020).

Entrepreneurial capabilities and culture

This dimension primarily considers sociological and cultural infrastructure, such as
entrepreneurship attitudes, business support infrastructure, experience, and essential

entrepreneurship abilities. Entrepreneurial skills are crucial in market entry and the

establishment of profitable commercial operations (Nicotra et al., 2018). The

dimension is also helpful in assessing one's aptitude for spotting opportunities,
managing new ventures successfully, and inspiring innovation to pick up on and adjust

to unique settings and circumstances. Additionally, the culture impacts innovative
entrepreneurship by affecting the number of people who start their businesses.
Hoffmann & Prause (2018) noted that integrating efficient innovation management

presents several difficulties for commercial organizations and entrepreneurs. If
significant errors are made during the early phase or essential decisions are not made

at the appropriate moment, the entire innovation management process is impacted

and may experience issues. As a result, business owners must take into account the

following success factors:

Management's commitment to innovation:

Since the dedication of managers at all levels (from top to bottom) constitutes the
cornerstone of the innovation management process, it is a critical success criterion for

innovation management. The essential conditions necessary for the success of
innovation management are enough to support budgets and time.

Conclusions
As was indicated before in "Innovation and business in business," the research helped

us gain a better knowledge of the significance of innovation and entrepreneurship to
the success of commercial firms, as well as how these two factors contribute
considerably to that success. We have extensively addressed not only the benefits but

also the challenges that come along with process innovation. We have also investigated
its role in the growth of entrepreneurship. The presented research project also lists the

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essential success factors for innovation management and entrepreneurialism. In

addition, the study project offers a comprehensive analysis of the objectives and
parameters of the effort.

The principles of entrepreneurship and innovation are inextricably linked to the

process of economic and social advancement. Businesses have an essential part to play
in bringing together various variables of production entangled in multiple approaches

to innovation, technology, and entrepreneurship. This particular sort of inventiveness

helps to drive economic growth while also serving the common good. To succeed in
the 21st century, innovation must break free from traditional ways of thinking about

business and extend to contemporary management practices. These practices aim to
strike a balance between the needs of companies and the needs of society as a whole.

The conceptual frameworks for entrepreneurship have been vividly displayed in this
research, demonstrating a critical grasp of global entrepreneurship, innovation, and

sustainability difficulties and challenges in corporate operations.

Discovering new goods, lowering costs, and drastically improving the development

process are all possible outcomes of effectively managing and fostering innovation.

Organizations that do not embrace innovation management run the danger of offering
outdated solutions to their respective markets. The capacity of a business to remain
one step ahead of its rivals is hindered as a result of this.

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