Creativity and innovation are two words which are very commonly used in meetings, group

sessions etc. These two words also have the tendency to overlap and are used interchangeably.
However, most of the people do not know the exact meaning of both the terms. They may sound
similar but are not essentially the same. Let’s first understand each of these terms. Creativity is
defined as the ‘’capability or act of conceiving something that is original or unusual’’. Just like
any other qualities, creativity is also a human quality. It is our ability to come up with unique
solutions at times of crisis and problems. But it’s important to highlight that creativity is an idea
and not reality. Creativity is like a mind-blogging activity where a person strives to think beyond
his imagination. Innovation on the other hand, is the ‘’introduction or implementation of
something new’’. It could be the introduction of a new technology, a new product, a new way of
production or simply altering the existing product. Creativity is related to imagination whereas
innovation is related to implementation. Creativity is the initial step towards recognizing that
something may be possible but, innovation is the step towards putting the creative idea into
reality. Creativity isn’t essentially innovation. You may come up with unlimited novel ideas but
without any execution of those ideas there is no innovation. Let’s take a look at some of the key
differences between creativity and innovation to enhance our understanding. Creativity is the
quality of thinking of new ideas whereas innovation is the practice of implementing the creative
ideas. Creativity can never be quantified whereas innovation can be measured. At the same time,
thinking creatively does not cost you as it is still just a thought. However, an innovation requires
some monetary investment. Creative thinking does not involve any risk whereas some level of
risk is always associated with invention. For e.g. sunglasses, was invented because someone
though creatively that the eyes need to protected from UV rays. But the actual invention of
sunglasses is the innovation. Every organization needs to encourage innovation and this can be
ignited by allowing its employees to conduct activities which many deviate from the norms but
lead to a positive result. As today, entrepreneurship is largely dependent on creativity and
innovation to mark its place in the market. In order to be creative, one must keep asking
questions, be curious, draw conclusions, explore novel ideas, and indulge in diverse forms of
thinking. Whereas, to be innovative one must be able to take risks, experiment, and be an
observant. You may still wonder that both creativity and innovation are same. Yes, they may
sound similar but are not essentially same.
We always come across the question that what makes a nation innovative. Firstly, people are
innovative not nations. Thought, there are several factors which contribute towards makes one
country innovative than the other. Diversity is one of the factors. It always goes unnoticed but
much innovation takes place at the periphery of cultures. We always associate the word
‘’diversity’’ with race and ethnicity but it is actually the cognitive variations that really
contribute to better innovative outcomes. Diverse groups provide unique ways of problem-
solving, interpreting information and coming to conclusions. Countries with better innovation
also have strong research and development systems without which it is nearly not possible to
magnetize the talent needed for innovation. People with high technical and scientific skills need
resources to use their skills to produce novel inventions. At times, a country may have all the
resources and materials to channelize innovation but if the market doesn’t want what it is
producing than there’s no motivation to pursue innovation. Let’s get it straight that the demand
side of innovation equals to young people because they are the ones who are likely to try out new
things and not to ignore the fact that they are also the ones on the supply side of innovation. They
are always willing to take risk and experiment new ideas, they are willing to confront the status
quo which is important for innovation to take place. This is why today you have more people in
their twenties to launch their start-ups along with all the risks associated with it. Also, some
people might argue that rules and regulations hinder the process of innovation but they ignore
that these regulations might also aid innovation. Honestly, we all want to make profits and
nobody would want to make huge investments in resources which can simply be duplicated by
anyone else. This is why it is mandatory that innovative countries have strong intellectual
property rights and value it and offer patent protections as this will motivate innovative
individuals to make investments. Some countries are also better at innovation because of their
risk-taking culture where they encourage people to take risks, challenges and accept failures as a
part of the process. It’s a fact that one can’t innovate without taking risks. Here, leaders play a
vital role in indicating that risk-taking is promoted and failure is tolerated. It is critical that
leaders communicate the importance of innovation. Along with this, countries can succeed at
innovation only if they truly value entrepreneurial spirit and become the ‘’land of opportunity’’
for its people.
However, just having an innovative idea doesn’t lead to an innovation. Every new business needs
money. Just as the proverb goes it takes money to make money. Without appropriate finance
people will only have ideas and no capital to turn their ideas into reality. A good vision is
necessary, a good product and service is necessary but you also need finance to produce and
deliver it. This is why finance is essential to create, expand and develop your business.
Fortunately, today entrepreneurs have wide array of options to opt for appropriate finance
source. Let’s understand few of these financial resources. One of the most common sources is
personal resources. These are merely personal savings of an individual, or the amount borrowed
from family, friends and relatives which are mostly interest free. Also your personal collateral
assets can be used. In this case, you become the first investor in your business. Venture capital
companies are investors who make profits on businesses that are technologically driven and have
high growth potential. They may also provide mentorship if needed. Nowadays, a lot of
commercial banks provide easy loans for start-ups in the form of asset finance, loan funds etc.
these loans usually carry lower rate of interest but the owner should use these funds wisely.
There are various financial services in the form of micro-finance like loans, insurance to help
small enterprises. However, they do not have guarantee to banks and are still widely accepted in
developing countries. Here, there are government regulated services like self-help groups and
also informal finance providers. The latter one can be risky because it functions outside
government regulations. Today, another trendy source of financing is crowdfunding.
Crowdfunding is basically small amount of capital from a large group of people to finance a new
business. This is usually done through means of social media or through crowdfunding websites
by creating a short video or text conveying the message of their innovation. However, this is
usually done through without regular financial intermediaries. Philanthropic venture capital
finances particularly social enterprises. Here the investors are not interested in profits but to
promote social good and this is usually done by charitable foundations and high net worth
individuals. They also extend their support to executive coaching. Government financing is also
available through various national and state financial resources especially for innovative and
small enterprises. This could be in the form of loans, grants, allowances etc as long as you
successfully fit the criteria. Lastly, we have a capital market which is a chief contributor of long-
term finance. However, when it comes to financing it is always better to diversify your sources to
deal with potential downturns and knowing that you have used various financing alternatives will
show your investor that you are a proactive entrepreneur.

Innovation has become the buzzword of the global market today. Several businesses have proved
that innovation is the only way to reach to the top. Innovation is not only differentiation but also
improbability of duplication. However, several times you will hear how innovation emerges.
Truly, there is not just a single source. Peter F Drucker has provided seven such sources of
innovation. First such source is ‘’the unexpected’’ innovations can take place unexpectedly just
in a flash of a genius. As the industry is full of surprises, there will not only be unexpected
successes but also unexpected failures. However, this shouldn’t go unnoticed as unexpected
results can be an opportunity for change. Second source is ‘’the incongruity’’ many a time’s
companies fail to understand what the customer really needs. This discrepancy between what is
and what is supposed to be can lead to a breakdown but also is a great source of innovation.
When the need is incongruent to the supply, innovation might be born. The third source is
‘’process needs’’. This particular source is not situation-focused rather it is task-focused. This
involves recognizing company’s weak spots after a detailed assessment and working on its
improvement. This becomes an opportunity for innovation. The fourth source is ‘’industry and
market structure’’. Industry and market structure are in a continual change. This is why many
industries may get disrupted overnight as rules and regulations change. Some product line may
expand while other may disappear. Here, the leaders need to be aware of the change taking place
in the market and take them as opportunities to innovate. The fifth source is ‘’demographics’’.
You will constantly see changes in the demographics like age, education, employment. These
changes determine the demand for products. However, if the company identifies the
opportunities effectively that it can open new business prospects. The sixth source is ‘’changes in
perception, meaning and mood’’. Over the years, there is a momentous change in the way people
perceive the world. Today, due to technology people’s perception tends to change even faster.
People can change their perception over a product in a snap of a moment. Sometimes these
changes in perception can lead to innovative opportunities. The last source here is ‘’new
knowledge’’. New knowledge and innovation is often used as a byword. Technological
breakthroughs are critical for innovation and shouldn’t be overlooked by businesses. Companies
who are not open to these changes are sure to fail in the long run. However, it’s not only limited
to technology. New knowledge is about improving processes, improving supply chain, learning
more about customers etc. Nonetheless, there is no limitation to the sources of innovation as
innovation can be born out of an adventure, hobby or passion.