In the knowledge-based economies of developed countries, innovation often originates from small- and medium-sized enterprises. These enterprises use their knowledge and expertise to focus on the strategic innovations that are required for products and services. Entrepreneurial orientation promotes behavior that encourages innovative thinking and actions. In other words, your behavior as an entrepreneur must manage the knowledge and capabilities of your business. You can then innovate quickly and maximize your returns.

Entrepreneurial orientation isn't a one-size-fits-all concept. This is particularly evident in its second element: risk-taking. Entrepreneurs have different views about risk. Various factors influence these views, not the least of which is the availability of venture capital. However, all entrepreneurs take risks, no matter how small. Your role as an entrepreneur is to consider these risks and act accordingly. Foremost among these considerations is the knowledge that innovation rarely occurs without risk. Indeed, innovation and risk usually go together. Thus, put simply, you sometimes have to take a chance if you want to succeed.

The third element of entrepreneurial orientation is perhaps the easiest to pursue. After all, people who do not have proactive attitudes do not build businesses. The point here, though, is to recognize that such approaches have a direct influence on innovation and risk-taking. Put another way; if you are a proactive entrepreneur, you are continually looking for opportunities. These opportunities may involve risk, but they can translate into innovative products and services that fill gaps in markets."