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Innovation and Entrepreneurship: The Necessary Conditions of Value Creation

Brian Barnard and Derrick Herbst
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Brian Barnard: Wits Business School, University of the Witwatersrand, South Africa
Derrick Herbst: Henley Business School South Africa, University of Reading, South Africa

Expert Journal of Business and Management, 2017, vol. 5, issue 2, 98-128

Abstract: The necessary conditions of value creation are considered from the vantage point of innovation and entrepreneurship. Both demand side (basic needs, customer perceived value, and customer satisfaction) and supply side (science, technology, and knowledge) considerations of value creation are examined. The relationships between value creation and basic needs, customer perceived value, and knowledge are further examined. Although a number of factors are identified that impact value, only four are seen as primary factors of value: price, benefit, satisfaction, and experience. The innovator and entrepreneur can create value, and quantify the uniqueness of their value offerings, through these four primary factors. The study concludes that, on the demand side, basic needs may be an indirect driver of value creation, and customer perceived value as concept may be useful in the context of value creation. At the same time, it is believed that the four factors – price, benefit, satisfaction, and experience – can significantly explain value creation. On the supply side, innovation as the driver of value creation, is not necessarily confined to science and technology – business knowledge and acumen is an important avenue. In addition to existing knowledge and experience, factors like orientation (interests, passion, drive) and involvement also explain opportunity recognition.

JEL-codes: O30 L26 (search for similar items in EconPapers)
Date: 2017
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