Final answer:
Penrose indicates that entrepreneurial services are responsible for innovation and new venture creation.
Step-by-step explanation:
According to Penrose, entrepreneurial services generate new market, product, and service ideas, while managerial services administer the routine functions of the firm and facilitate the profitable execution of new opportunities. In essence, entrepreneurial services drive the innovation.
Risk-taking necessary for a business to identify and capitalize on new ventures. Managerial services, on the other hand, ensure the efficient operation and administration of the company's existing business processes, contributing to the business cycle, productivity, and ultimately, the Gross Domestic Product.
According to Penrose, entrepreneurial services generate new market, product, and service ideas, while managerial services administer the routine functions of the firm and facilitate the profitable execution of new opportunities.