Abstract:
The relative importance of land declined with the shift from agriculture towards manufacturing sector in economic development. During the process of industrialisation, labour and capital came to be treated as potent factors. The technological changes began to assume importance over capital in the subsequent period. "The development of basic infrastructure having been largely achieved, began to yield place to consumer industries of a wide variety (Hanumantha Rao). Of late, labour and capital have minor significance compared to innovation and equally importantly imitation, both of which are the primary functions of the entrepreneur, the central factor in the development process. Innovation is a range of decisions that an entrepreneur must be capable of making. The innovation- prone entrepreneur has open-mindedness with respect to new ideas. Vallalaar a religious man in Tamil Nadu expressed three requirements to attain a leadership position: Be inquisitive, be different from others, and be alert to opportunity. These are applicable to the entrepreneur who wishes to be an innovator. Innovation covers technological advances in production processes as well as the introduction of different attributes in the marketable products. These two facets are supply side and demand side innovations respectively. In the supply side, innovation is an energizing act that endows resources with a new capacity to create wealth. There are land-augmenting, labour-saving, capital saving innovations and neutral innovation that increases the efficiency of all factors by the same proportion, according to classical thinking. In the modem thought, innovation is knowledge - intensive. In the demand side, innovation is in defining what an enterprise is doing and what its products do for the people who buy them. Selling is the art of just pushing what has been produced, into any market. But marketing is identification of target group and their need and fulfilling them. In the demand side, innovation has double interpretation. (1) Innovation is achieving market impact, (2) Innovation is responding dramatically and continually to changes in the environment.
