Invention and innovation in economic change

Abstract

Purpose-In this paper we investigate the difference between invention and innovation. Since theories of invention are rare in the literature, this subject deserves the appropriation of proper attention. In the economics of competitive market, there is an important distinction between invention and innovation. Methodology-We use qualitative and historical-narrative methodology. An invention is devoid of economic value unless it is put into practical use and consumption. An abstract idea may be an important invention. But it takes an entrepreneur to transform the abstract invention into a marketable product. By "getting things done," the entrepreneur produces economic value and thereby utility. Findings-The entrepreneur produces utilities by arranging, designing or reorganizing things in a new way that were not done before. On the other hand, the inventor creates ideas to produce something new that was inexistent beforehand. Conclusion-The task of inventor may seem more essential at first. However, as far as competitive economy is concerned, the function of innovative entrepreneur is determinant in economic change and development. An inventor becomes entrepreneur if endeavor in invention is transformed into labor in entrepreneurship.