Entrepreneurship

Entrepreneurship and Innovation

Joshua Doe

Innovation
Innovation Innovation Management Seven Sources of Innovation Types of Innovation Principles of Innovation Developing the innovative process Innovation and Organizational performance Goals of Innovation Innovation and Public Policy Failures of Innovative processes Diffusion of Innovation

Innovation
Innovation, the means by which entrepreneurs exploit change, refers to a new way of doing something. In most fields, this something new must be substantially different to be innovative.
Eg. In Economics and business, innovation must result in efficiency, increase value, customer value, increased productivity, etc.

Innovation
Distinguishing between Innovation and Other concepts
Innovation- an Idea applied successfully. Invention- An idea made manifest for the first time -Eg Urvile right and Wilbour Wright invented the aircraft, but there have been several innovations to the idea. Creativity is the capability or act of conceiving something original or unusual.

Innovation
Schumpeter defines Economic innovation.
Innovation = (creativity + risk taking) Introduction of a new good/service Introduction of a new method. Opening of a new market. The conquest of a new source of raw material Carrying out of a new organization of any industry, like the creation of a monopolistic position.

Degrees of Innovation
Breakthrough Innovation- A solution or idea is suddenly discovered after long years of research. eg. Cure for HIV/AIDS. Technological Innovation- Comes out of existing technology. Eg. Internet radio coming out of internet technology. Ordinary Innovation- Anything one does to solve any ordinary everyday problem.

Innovation Management
Innovation may be Incremental, radical or evolutional. Innovation = Research (R) + Developing the idea(D) + Commercialization (C)

Features of an Innovative climate

Encouragement of new ideas Encouragement of trial and errors High level institutional, material and financial support. Acceptance and tolerance of long term outcomes. Equal opportunities for all.

Workings of the Brain

Innovations are outcomes of the brain.
Left brain- Verbal, analytical, abstract, rational, logical, linear Right Brain- Non Verbal, seeing analogies, non rational, intuitive etc. Innovation is a and creativity is enhances by developing both parts of the brain. More emphasis though is placed on the left brain.

Types of Innovation
Innovation by Invention- Totally new product/ concept/ service. Innovation by Extension- New use, different application, Innovation by Imitation Reproduction of same thing with inferior quality. Chinese, Nigerians. Duplication- Creation or replication of existing concept through enhancement and improvement. Synthesizing- Combining existing concepts with other concept.

Seven sources of Innovation

Unexpected occurrences Incongruities ( Weird happenings) Process needs Industry and market changes Demographic changes Changes in perceptions New knowledge

Principles of Innovation
Be action oriented Make the product/service customer based Start small Aim high towards success Try, test, revise Learn from mistakes Experiment frequently Integrate new and traditional technologies Reward heroic activities

Developing the Innovative process

1. Background of knowledge acquisition
Extensive reading Conversation with experts Attending seminars Travelling to places Library references Being curious

2. The incubation process- Thinking over the problem in relation to the information acquired. This is helped by
Exercising regularly Playing creative games Meditation Sitting and relaxing Engaging in some mindless routine jobs like cleaning, weeding etc.

Developing the Innovative process

3. Idea Experience- This is where the solution or idea is discovered. 4. Implementation- This is the most difficult stage . It requires courage, self discipline and perseverance.

Goals of Innovation
Improved quality Creation of new markets Extension of product range Reduced labour cost Improved and efficient production processes Reduced material usage Reduced environmental damage Reduced energy consumption Conformance to regulations

Innovation and Public Policy

Innovation is considered a major drive an economy. Innovation requires ( Skills + capital + environmental support) Factors that lead to innovation then become critical to policy makers. Policy makers directly influence the environment and indirectly influence skills and capital. Policy makers promotion of innovation = Well developed educational system, institutional, administrative and economic infrastructure.

Failures of innovative processes

Innovations that fail are potentially good but are abandoned or postponed due to budget constraints, lack of skills, poor fit with curent goals, OSulelivan (2002)- Failure is a direct result of organizational culture. Factors that cut across organizations include Poor leadership Poor organizational structure Poor organizational communication Poor empowerment of staff Poor knowledge management

Failures of innovative processes

Common causes of failure within the innovation process.
Poor goal definition Poor allignment of actions goals Poor participation in teams Poor monitoring of results Poor communication and access to information

Diffusion of Innovation

Innovators
Innovators are the first individuals to adopt an innovation.
Innovators are willing to take risks, youngest in age, have the highest social class, have great financial lucidity, very social and have closest contact to scientific sources and interaction with other innovators. Risk tolerance has them adopting technologies which may ultimately fail. Financial resources help absorb these failures. (Rogers 1962 5th ed, p. 282)

Early Adopters
This is the second fastest category of individuals who adopt an innovation. These individuals have the highest degree of opinion leadership typically younger in age, have a higher social status, have more financial lucidity, advanced education, and are more socially forward than late adopters. More discrete in adoption choices than innovators. Realize judicious choice of adoption will help them maintain central communication position (Rogers 1962 5th ed, p. 283).

Early Majority
Individuals in this category adopt an innovation after a varying degree of time. This time of adoption is significantly longer than the innovators and early adopters.
Early Majority tend to be slower in the adoption process, have above average social status, contact with early adopters, seldom hold positions of opinion leadership in a system (Rogers 1962 5th ed, p. 283)

Late Majority
Individuals in this category will adopt an innovation after the average member of the society. These individuals approach an innovation with a high degree of skepticism and after the majority of society has adopted the innovation. Late Majority are typically skeptical about an innovation, have below average social status, very little financial lucidity, in contact with others in late majority and early majority, very little opinion leadership.

Laggards
Individuals in this category are the last to adopt an innovation. Unlike some of the previous categories, individuals in this category show little to no opinion leadership.
These individuals typically have an aversion to changeagents and tend to be advanced in age. Laggards typically tend to be focused on traditions, likely to have lowest social status, lowest financial fluidity, be oldest of all other adopters, in contact with only family and close friends, very little to no opinion leadership

The End
Que: 1. What is innovation and what are the sources of innovation 2. a. List and discuss the stages of innovation adoption. b. What are the causes of innovation failures.