Innovation, Creativity and
Felix J. Heunks
• Which of these is NOT a type of an
• Process Innovation
• Product Innovation
• Programme Innovation
• Service Innovation
• Social Innovation
• Which of these does NOT define
• The successful implementation of a
• Act of conceiving or imagining something
original and generation of new ideas.
• The conception of a new idea,
transformed into an invention and
exploited as much as possible.
• Doing new things.
• Which of these is NOT listed as one of the
top innovative companies?
• Douglas Aircraft
Flow Of Presentation
• Innovation and Creativity as Success
• Innovation, creativity and Personality
• Institutional aspects of Innovation
• An empirical check of the hypotheses
• Innovation – The successful implementation of a
creation (Heunks and Roos,1992)
• “Innovation is the process of change that creates
and grows wealth.” (Roger More, 2010)
• “Innovation is the implementation of something
• “Creativity is the capability or act of conceiving
something original or unusual.”
• “Invention is the creation of something that has
never been made before and is recognized as
the product of some unique insight.”
Innovation and Creativity as
• Hypothesis 1
The success of a small firm, measured by
its growth, increasing productivity and
profits, depends on its innovation.
• Framing the
• Hunting and
ng to narrow
• Preparing a
• Younger firms are less innovative
than older ones.
• New ideas are more relevant after a firm‟s
birth or start up stage.
• Reliance Industries V/s Bombay Dyeing
• Boeing V/s Douglas Aircraft
• Marriott V/s Howard Johnson's
• Merck V/s Pfizer
• Innovation and success of a small firm
depend on creativity, particularly after start
Innovation, creativity and
• If creativity as a matter of divergent
thinking has to result in innovation, it has
to be followed by convergent thinking
• Innovation depends on a combination of
flexibility and control
Characteristics of Creative people
• Have knowledge of their specialty
• Be extravert, sensitive to problems and
• Be independent, persistent, self confident
• Take risks, be open to new ideas and
• Be flexible in combining things and
Characteristics of Innovative
• Have high level of knowledge
• Sociable, embrace challenges and be energetic
• Independent, persistent, self confident and
• Take calculated risks and be open to new ideas
• Be flexible and creative
• Desire responsibility, need achievement, value
money and have a future orientation
• Be a dynamic leader, take initiative and have
• Creativity and Innovation tend to share
some personal backgrounds, like a high
level of education, extraversion,
acceptance of challenges, a need for
independence, self confidence, risk taking
• Innovation has some specific personal
backgrounds, particularly a future
orientation and leadership affinities.
Institutional aspects of innovation
• Innovation is the characteristic of an
organization, its members and its context.
• Innovation is the successful
implementation of a creation
• Institutional factors fostering innovation
Availability of qualified personnel
• Innovation depends on the availability of
external capital, information, cooperation
and qualified personnel.
Depending on the emphasis being laid on either
development or efficiency firms tend to be
innovative or positional type.
Rizzoni found 6 types of small firms depending on
their orientation towards technological innovations.
1-2 traditional firms
3-4 cooperating firms
5-6 technology based firms
Comparison of small and large
According to Hyvarinen: Large firms excel in all
kind of resources and knowledge, small firms tend
to excel in flexibility and to know how to use
Large firms have material advantage and small
firms have behavioral advantage
• Innovation in small firms profits their
flexibility and creativity, and in larger firms
more from the availability of resources like
external capital and qualified personnel.
According to Arrow less costly and more
original innovations will come from small
firms and those involving higher
development costs but less radical
departures in principle will come from larger
• Innovation in small firms emphasizes new
products and processes whereas
innovation in larger firms emphasizes
An empirical check of hypotheses
• Hypotheses 1 :- It proves that product innovation
hardly contributes to these aspect of success.
• Hypotheses 2:- Firms age does not co relate
with any kind of innovation.
• Hypotheses 3:- The growth is not particularly
stimulated by such an attitude.
• Hypotheses 4:- Is supported as far R&D
innovation is significantly related to combination
of flexibility and control
• Hypotheses 5:- Is supported by the fact that
innovation and creativity are more or less related
risk taking and flexibility.
• Hypotheses 6:- Innovation is increased more
than creativity by entrepreneur‟s future
orientation and by his wish for leadership.
• Hypotheses 7:- Innovation depends on
cooperation with other firms and on the
availability of external capital, but this regards
mainly marketing innovation.
• Hypotheses 8:- Support small firm profits from
flexibility and creativity and larger firms from
resources like capital and qualified personnel.
• Hypotheses 9:- Supports small firms on product
and process innovation and larger firm on R&D.
• Hypothesis 1
Small firms - Process innovation.
Medium firms - R&D Innovation.
• Hypothesis 2
There is no correlation between innovation and
age of the firm. However it is found that
innovation usually starts early in the firm‟s
• Hypothesis 3
The role of creativity for innovation and success
increases during firm‟s life cycle. This is mainly to
compensate bureaucracy and stagnation.
• Hypothesis 4
R&D innovation is stimulated by flexibility.
In case of small firms it is stimulated by a
mix of flexibility and control
• Hypothesis 5
Creativity and innovation only share risk as
a personal background.
• Hypothesis 6
Innovation tends to have some specific
personal backgrounds like level of
backgrounds too like acceptance of
challenges and entrepreneurship.
• Hypothesis 7
Marketing innovation is fostered by cooperation with other firms and availability of
external capital. External information stimulates
process and R&D innovation.
• Hypothesis 8
Innovation in small firms depends more on
orientation, leadership etc
• Hypothesis 9
Medium and large scale firms show higher
levels of innovation than small firms.
Interpretation of Results
• Small firms show relatively less tendency to
innovate when compared to that of large firms.
• Innovation does not depend on the age of the
• Flexibility and Control are necessary to foster
• The „opportunity‟ factor correlates fairly strongly
with innovation rather than the „desire‟ factor.
This means that adequately running a firm
depends more on opportunities and not on the
sheer desire to run a firm.