Submitted By: Manisha Maharjan MBA Spring 2010 (Term IV)

Submitted To: Rupesh K. Shrestha (Course Instructor)

http://www.scribd.com/doc/39162327/Peter-Drucker-Innovation-and-Entrepreneurship http://www.vedpuriswar.org/book_review/Innovation%20and%20Entrepreneurship%20.html

Introduction: The entrepreneurial economy

This chapter has discussed about the emergence of entrepreneurship in the US quite broadly and briefly and also about other big economies. It has included various Qualitative, Quantitative, Demographic, Geographic and few more factors that had its impact on the emergence and growth of entrepreneurship in the US and other huge economies. The total jobs in America grew by 24million from 1974-1984. This many jobs had not been created in US in any other peace time period. The job creation was declining in Western Europe and Japan in the same period. US provided employment to many women and in many cases the jobs were far better than women had ever held before. The fortune 500 companies, governments, universities and hospitals were the ones which created practically all the jobs in the American economy in the quarter century after World War II. But since the late 1960s, job creation and job growth in the US has shifted to a new sector. The old job creators had lost jobs from early 1960 1980. According to The Economist, 600,000 new businesses were being started in the US every year in the 1980s. This was about seven times as many as were started in each of the boom years of the 50s and 60s. The high technology contributed about 5-6 millions of jobs out of 40 million jobs which were created from 1965 to 1980. High-tech creates the vision for entrepreneurship and innovation in the community, and the interest for them. Willingness of young, highly trained people to go to work for small and unknown employers rather than for the big ones was because of high tech mystique. The demographic factors like the differences in the baby boom and baby bust period of the US and the Europe also has had much involvement in outlining the start and growth of entrepreneurship there. Contractor and physical exercise equipment makers among various entrepreneurial ventures were among the Inc.500 fast growing companies in a year when construction was at an all time low. Entrepreneurial ventures during 1981-83 in the US like chain of barber shop, chain of dentistry offices, manufacturers of hand tool, a finance company that leases machinery to small businesses

Entrepreneurship & Innovation

11th May, 2010

Submitted By: Manisha Maharjan MBA Spring 2010 (Term IV)

Submitted To: Rupesh K. Shrestha (Course Instructor)

were doing tremendously well although the high tech companies at the same time were getting less investment than those companies and were less profitable. A research about the growth of the US economy (1981-83) revealed that midsized companies grew at three times the rate of the fortune 500 in sales and in profits. They were adding jobs where as the fortune 500 were losing jobs between 1970-83. These midsized companies included companies that made doughnuts, Furniture Company, chinaware and few more. Finally, this chapter articulated that management will be more needed and will have a greater impact on the small entrepreneurial organization than it has in the big managed ones.

Entrepreneurship & Innovation

11th May, 2010

Submitted By: Manisha Maharjan MBA Spring 2010 (Term IV)

Submitted To: Rupesh K. Shrestha (Course Instructor)

Systematic Entrepreneurship and Purposeful innovation & the Seven Sources for Innovative Opportunities
This chapter starts with a thought about entrepreneurship from a French economist J.B. Say. Entrepreneurship shifts economic resources out of an area of lower and into an area of higher productivity and greater yield. But the author argues that Says definition does not tell us who this entrepreneur is. English people identify entrepreneurship with the new, small business; Germans identify it with power and property, Americans believe the entrepreneur is often defined as one who starts his own, new and small business. Bright ideas are the riskiest and least successful source of innovative opportunities. Instead the systematic, managed, purposeful and organized search for changes and analysis of the opportunities might offer innovation. Entrepreneurs need capital as do all economic activities. They are not investors and also not necessarily an employer. It is thus a distinct feature whether of an individual or an institution not a personality trait. The author quotes down the people who need certainty are unlikely to make good entrepreneurs. Entrepreneurs search for change responds to it and exploits it as an opportunity. Entrepreneurship needs to be systematic and well managed, also needs to be based on purposeful innovation because businesses are becoming more complex, various high tech tools are coming up so to cope up with changes people need to be able to systematize and manage well. Innovation is a specific instrument of entrepreneurship that stimulates entrepreneurship. Every innovation is not entrepreneurship. It has been rightly said there are no such things as resource until man finds a use for something in nature and thus endow it with economic value. When a need arises then men go out for search that satisfies the need but before the need has been found there is no value for the good that now satisfies the aroused need. Innovation which seems to be big may turn out to be merely a piece of intelligence that has no much use but an innovation with modest intellect importance. It is the purpose that makes innovation huge or shrinks it. Social innovation, technical innovations and economic innovations are not important until and unless their purposefulness is described and understood properly. Entrepreneurship & Innovation 11th May, 2010

Submitted By: Manisha Maharjan MBA Spring 2010 (Term IV)

Submitted To: Rupesh K. Shrestha (Course Instructor)

Systematic innovation means monitoring seven sources for innovative opportunity. First four sources are internal and are basically symptoms and are highly reliable indicators of change that have already happened or can be made to happen with a little effort where as the other three are external i.e. it consists of changes outside the enterprise or industry. The seven sources require separate analysis for each has its own distinct characteristics. No area is however, inherently more important or more productive than other. Sources within the enterprise: y The unexpected the unexpected success, the unexpected failure, the unexpected outside event; y The incongruity between reality as it actually is and reality as it is assumed or as it ought to be; y y Innovation based on process need; Changes in industry structure or market structure that catches everyone awareness.

Sources outside the enterprise: y y y Demographics (population changes); Changes in perception, mood and meaning; New knowledge, both scientific and non scientific.

Entrepreneurship & Innovation

11th May, 2010