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Innovations can take place at the spark of light or can take a generation of experiments 3. Innovations provide a Unique Selling Proposition to a business. 4.Innovations are action oriented .ie.active and searching new ideas. 5. Innovations are action oriented .ie. Active and seacrhing new ideas 7.Innovations help in making the product, service or process customer based. 8. Innovation is all about trying , testing, and revising. Innovation refers to a process of creation / value addition of a product / service process/ that can solve exiting problems or tap opportunities. Innovation is just not limited to products and communication technologies ) Entrepreneurship and Innovation Creative as a prerequisite to innovation • The terms creativity and innovation are often used to mean the thing, but each has a unique connotation.
customers ( eg. Sasken
Creativity - is “the ability to bring something new into existence. This definition emphasizes the “ability”, not the “activity”, of bringing something new into existence. Innovation - is the process of doing new thing.
• Innovation, therefore, is the transformation of creative ideas into useful applications, but creativity is a prerequisite to innovation. The Creative Process • Entrepreneurs need ideas to pursue, and ideas seldom materialize accidentally. Ideas usually evolve through a creative process whereby imaginative people, germinate ideas, nuture them, and develop them successfully. • Various labels have been applied to stages in the creative process, but most social scientist agree on five stages that we label as: • Idea Germination
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Preparation Incubation Illumination Verification
How can entrepreneurs be innovative ? According to Schumpter (1934) listed five different kinds of innovations or ways to act as an entrepreneur : 1. The introduction of a new good or quality of a good. 2. The introduction of a new method of production 3. The opening of a new market. 4. The utilization of some new sources of supply for raw materials or intermediate goods. 5. The carrying out of some new organizational form of the industry . It is very important to think out of the box, sidewise network with others Sources of innovative and creative ideas 1.Present and potential consumers 2. existing companies Raw material providers Distribution and retailers Research and development Existing employees
MYTHS ABOUT INNOVATION 1. Innovation is planned and predictable 2.Technical specification should be thoroughly prepared 3. Creativity relies on dreams and ideas 4. Technology is the only driving force of innovation and success.
A model of the creative process:
Idea Germination: The seeding stage of a new idea Recognition
Preparation: Conscious search for knowledge Rationalization
Incubation: Subconscious assimilation of information Fantasizing
Illumination: Recognition of ideas as being feasible Realization
Verification: Application or test to prove ideas has value Validation
Innovation and Entrepreneurship • It is important to recognize that innovation implies action, not just conceiving new ideas. When people have passed through the illumination and verification stages of creativity, they may have become inventors, but they are not yet innovators. • The difference between invention and innovation is: Invention - is the creation of new products, processes, and technologies not previously known to exist. 2. Innovation - is the transformation of creative ideas into useful applications by combining resources in new or unusual ways to provide value to society for or improved products, technology, or services.
Elements in the Innovation Process
Analytical Planning - to identify: product design, market strategy, financial need Organizing Resources - to obtain: materials, technology, human resources, capital Implementation - to manufacturing, services accomplish: organization, product design,
Commercial Application - to provide: value to customers, reward of employees, revenues for investors, satisfaction for founders.
ENTREPRENEURIAL CREATIVITY Entrepreneurial Creativity is about coming up with innovative ideas and turning them into value- creating profitable business activities. Entrepreneurs are entrepreneurial, as differentiated from managerial or strategic, because they think effectually; they believe in a yet-to-be-made future that can substantially be shaped by human action; and they realize that to the extent that this human action can control the future, they need not expend energies trying to predict it. In fact, to the extent that the future is shaped by human action, it is not much use trying to predict it – it is much more useful to understand and work with the people who are engaged in the decisions and actions that bring it into existence. Entrepreneurial creativity = creativity × entrepreneurial action. Entrepreneurial activity is the enterprising human action in pursuit of the generation of value, through the creation or expansion of economic activity, by identifying and exploiting new products, processes or markets. Entrepreneurial creativity is a synergistic combination of four capabilities 1. Creative, lateral and systems thinking skills 2. Cross-functional expertise 3. motivation 4. Entrepreneurial action and technology of achievement. Creativity Creativity is a continuous activity for the entrepreneur, always seeing new ways of doing things with little concern for how difficult they might be or whether the resources are available. But the creativity in the entrepreneur is combined with the ability to innovate, to take the idea and make it work in practice. This seeing something through
to the end and not being satisfied until all is accomplished is a central motivation for the entrepreneur. Indeed once the project is accomplished the entrepreneur seeks another 'mountain to climb' because for him or her creativity and innovation are habitual, something that he or she just has to keep on doing. Psychologists have presented various definitions to explain the meaning of creativity. Stagner and karwoski Creativity implies the production of a totally or partially novel identitySpearman Creativity is the power of the human mind to create new contents by transforming relations and thereby generating new correlates. FACTORS INFLUENCING ENTREPRENEURIAL CREATIVITY Creative thinking Creative thinking is the capacity to think outside the box and put existing ideas together in a new combination. It determines how flexible and imaginatively approach problems. Creative problem solving as a process was described as a four stage process of preparation, incubation, illumination and verification. Vertical thinking is defining problem in only one way without considering alternative views whereas lateral thinking is seeking to solve a problem by non- conventional, apparently illogical means. This process and willingness to look at things in a differently way. Lateral thinkers generate alternate ways of viewing a problem and problem multiple definitions.
Cross-functional expertise Cross-functional expertise is the knowledge and skill set on various functional areas and disciplines Motivation Entrepreneurs are motivated to start a business because of the factors like ambitious factors, compelling factors and facilitating factors. Whatever may be the reason, it can be said that in most of the times of the history of human civilization, there were entrepreneurs who did independent business and this trend of history still continues. For the last few decades in all over the world, entrepreneurs are regarded as value adding people to the society. The common man thinks that people go into business and become entrepreneurs solely to make money. The desire to earn money is no doubt an important motivating force. But entrepreneurs are motivated not for profits alone. Several research studies have been conducted to identify the factors that inspire entrepreneurs.
The motivating forces P.N. Sharma identified nine motivating factors which are as follows • • • • • • • • • • Educational background Occupational experience Desire to work independently in manufacturing line Desire to branch out to manufacturing Family background Assistance from government Assistance from financial institutions Availability of technology Availability of raw material Other factors such as demand of a particular product, utilization of surplus money etc These factors can be classified as internal and external factors. The first five factors are called as internal factors and the final four factors are external motivators.