He assumed that change is the basic element of dynamic process, and those changes come in the form of innovations.
Any innovation may consist of: (a) The introduction of a new product (b) The introduction of a new method of production (c) The opening up of a new market (d) The conquest of a new source of supply of raw materials or semi manufactured goods.
(b) Capital resource can enable the entrepreneurs to have command over factors of production.
For this, he needs purchasing power in the form of credit and capital which he can borrow from banks and other financial institutions.
(c) The economic system has the optimum level of output and its maximum use and there is no possibility of wastage of resources.
The above stated features imply that circular flow is used in a static setting.(e) The carrying out of the new organisation of any industry like the creation of a monopoly.The new combinations of these factors are essential for the development process to start.Entrepreneurship is different from managerial activity. A manager simply directs production under existing techniques but entrepreneurship, requires the introduction of something new.An entrepreneur is also different from a capitalist.