Lec 5

• Entrepreneurial Creativity and Innovation

  In a free market economy, the entrepreneur has to be creative and innovative in order to be more competitive, improve market share and increase profitability
• Peter Drucker (1986): 'Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service'
• Creativity


  A process that can be developed and improved. Everyone is creative to some degree, some individuals have a greater aptitude for creativity than others
• Creativity


  The process through which invention occurs, the enabling process by which something new comes into existence
• Creativity


  The production of ideas for something new that is also potentially useful
• Perspectives of creativity


  • Creativity at the personal level
  • Group or social creativity
  • Contextual creativity
• Creative Thinking Skills


  How a person identifies a problem and seeks its solution - the capacity and ability to put existing ideas and knowledge together to explore new possibilities
• Knowledge


  Expertise or knowledge encompasses everything a person knows and can do - can be acquired through formal and informal education
• Motivation


  Determines what people actually want and will do. Intrinsic motivation is internally driven, extrinsic motivation can be financial or non-financial
• Sources for new ideas

  • Consumers
  • Existing products and services
  • Distribution channels
  • Government
• Creativity Techniques


  • Problem reversal
  • Lateral thinking
  • Forced analogy
  • Mind mapping
  • Brainstorming
  • Attribute listings
• Problem Reversal

  Looks at the opposite of things, sees things inside out, backwards or upside down
• Forced Analogy


  Takes a fixed element and forces it to be compared to the attributes of another unrelated object or element
• Brainstorming


  A technique where no criticism is allowed, freewheeling is encouraged, quantity of ideas is desired, and combinations and improvements of ideas are encouraged
• Attribute Listing


  The problem is broken down into smaller parts or characteristics and analysis is made on each to develop ideas on how to improve them
• Mind Mapping


  A diagram used to represent words, ideas, tasks, or other items linked to and arranged around a central key word or idea
• Lateral Thinking


  Requires a person to explore the possibility of new solutions to a problem from a different approach or perspective
• The Process Of Creativity

  1. Knowledge Accumulation

  2. Incubation

  3. Evaluation and Implementation
• Sources of Innovation

  • Unexpected sources
  • Incongruity
  • Process need
  • Changes in industry or market
  • Demographic changes
  • Changes in perception, mood and meaning
  • New, scientific and non-scientific knowledge
• Innovation


  The process by which entrepreneurs convert opportunities (ideas) into marketable solutions. The means by which they become catalysts for change
• Innovation


  Finding ways to deliver new or better goods or services. The creation of something new in the marketplace that alters the supply–demand equation
• Peter Drucker: 'Innovation is change that creates a new dimension of performance'
• Types of Innovation (Schumpeter 1934)

  • The introduction of a new good or a new quality of the good
  • The introduction of a new method of production
  • The opening of a new market
  • The conquest of a new source of supply
  • The carrying out of the new organization of an industry
• Sources of Innovation


  • Unexpected events or occurrence
  • New-knowledge concept
  • Changes of demographics
  • Process needs