Entrepreneurship Approach to Service Innovation Systems

Abstract

The purpose of this paper is to investigate the link between entrepreneurship and service innovation within the framework of entrepreneurial orientation, innovation and new entry as a way of creative entrepreneurship activity. The design and methodology of the survey rests on theoretical analysis to determine the direction of causation between entrepreneurship and service innovation through secondary data. Market failure approach is adopted to illustrate three fundamental axioms that specify the organizational economics paradigm which we modified for application particularly to the organization of financial services. The dynamic function of entrepreneurship sets the direction of causation from entrepreneurial orientation to innovation process through which creative ideas are transformed into state-of-the-art service systems that keep up an increasing trend as the boundaries of markets for digital economies continue to broaden. The introduction of new ways to provide services more efficiently also improves market performance. The depiction of theoretical premises as a basis for the inclusion of entrepreneurial human capital as well as an agent of change into the driving forces of service innovation systems. The paper proposes a research agenda for future studies to examine the dynamics of innovation and creative entrepreneurial activity and finally to form Entrepreneurship Augmented Production Function as a new tool to economic inquiry. Keywords: innovative entrepreneurship, service innovation systems, organizational economic paradigm, financial services, market failure approach, digital economies