New Technologies, Products, and Services

A consequence of the association between entrepreneurship and change is the role that entrepreneurs play in promoting innovative technologies, products, and services. Many people who have developed new technologies, products, or services were employees of large corporations that refused to use the new inventions forcing the inventors to become entrepreneurs. Take Gore-Tex fabric, now a staple of winter sportswear. When Gore-Tex was first developed, no established garment manufacturer wanted to use it, and it was ignored until a struggling smaller firm decided to experiment with it.

Sometimes one entrepreneurial innovation gives rise to many others. The most famous and important case comes from the very start of the Industrial Revolution during the second half of the eighteenth century. Early in that century, imported cotton fabric from India gave some British entrepreneurs the idea of producing such fabric in Britain. At first, the raw cotton (mostly from the American South) was spun into yarn by hand-operated machines and then woven, also by hand-operated machines, into fabric. But a problem arose: the machines that did the spinning worked too slowly to produce enough yarn to keep all the weaving machines fully occupied. Spinning, therefore, was a bottleneck. Before long inventors were working to rmove the jam. In the mid-1760s, James Hargreaves invented the spinning jenny, a machine that could produce up to 11 threads of cotton simultaneously. Later in the century, the spinning jenny was linked to the steam engine, so that it no longer had to be worked by the operator’s foot. The overall effect of these innovations was to increase still further the amount of cotton thread produced. Now there was too much thread and not enough weaving capacity-exactly the opposite of the old problem. Again, inventors went to work. In 1785, an English clergyman invented the power loom, a weaving machine powered by a steam engine. Even Starbucks is leading a trend towards a rapid increase of gourmet coffee shops. In the small city of Charlottesville, Virginia, four new gourmet coffee retailers opened in 1993.

Some Contributions of Independent investors and Small Organizations:
Digital computer, Xerography, Laser, Insulin, Turbojet engine, Magnetic recording, Oxygen steel making process, Gyrocompass, Rocketry, Shell molding, Shrink-proof knitwear, Zipper, Self-winding wristwatch Continuous hot-strip steel, Helicopter, Air Conditioning, Ball-point pen, Tungsten carbide, Velcro, Fiberglass surfboards, String trimmers, Magnetic core memory, Flexible soda straws, Vacuum tube, FM radio, Penicillin, Petroleum catalytic cracking, Fiber optics, Heterodyne radio, Streptomycin, Cyclotron, Titanium, Cotton picker, Dacron polyester fiber, Automatic Transmission, Mercury dry cell, Power steering, Color photography, Polaroid camera, Cellophane, Bakelite, Hovercraft, Metal-laminated skis, Fiber-glass snow skis, Prince tennis racket, Geodesic domes.

Marketplace Change:
Entrepreneurs stir up the waters of competition in the market place. Zoltan Acs calls small businesses created by entrepreneurs “agents of change in a market economy. Examples are everywhere: Steve Jobs and Steve Woznaik upset the computer market with the Apple Computer, the Wankel engine got the attention of managers in the auto industry, Donald Burr changed the rules of airline price competition with People Express, Al Neuharth changed the sports pages of American newspapers with USA Today, and MTV changed the way rock music is promoted. You can imagine that if you were running a small coffee shop and bakery, and Starbucks moved in across the street, you’d soon be thinking about the competitiveness of your business. And Schultz faces competition from bookstores such as Borders that have opened coffee bars.

The international market also provides entrepreneurial opportunities for companies. Cascade Medical Inc., for example, knew there was a large potential market in Saudi Arabia for its blood-glucose home monitoring system. Saudi Arabia has 700,000 diabetics. It joined with a Saudi trading partner and now competes with foreign health-care companies-all giants and has snapped up 20% of the Saudi home-glucose-monitoring market.