Entrepreneurship for engineers

1. EE507 Feb 2019 S Daniels
EE507
Entrepreneurship for Engineers
Session 7: Innovation

2. EE507 Feb 2019 S Daniels
Objectives
• Understand what innovation is
• Understand Schumpter’s 5 types of
innovation
• Identify sources of innovative opportunity
• Understand Drucker’s 5 stage approach to
systematic innovation
• Understand Intrapreneurship

3. EE507 Feb 2019 S Daniels
What is Innovation?
• “ the purposeful and systematic search for
change and opportunity” (Peter Drucker)
• When an enterprise produces a good or
service or uses a method or input that is new
to it, it makes a technical change. The first
enterprise to make a given technical change
is a innovator. Its action is innovation.

4. EE507 Feb 2019 S Daniels
What is Innovation
• A ‘mould-breaking’ development in new
products or services or how they are
produced - the materials used, the process
employed or how the firm is organised to
deliver them - or how or to whom they are
marketed, that can be linked to a
commercial opportunity and successfully
exploited
Burns pg 57

5. EE507 Feb 2019 S Daniels
What is Innovation (cont.)
• Is the act that endows resources with a new
capacity to create wealth
• The overwhelming majority of successful
innovations exploit change

6. EE507 Feb 2019 S Daniels
Entrepreneurship and Innovation
• Entrepreneurs innovate… Innovation is the
specific instrument of entrepreneurship
• Entrepreneurs need to know and apply the
principles of successful innovation
Drucker pg 27

7. EE507 Feb 2019 S Daniels
Examples of Innovative Activity
(Schumpter)
• Developing new products and services
• Developing new methods of production
• Identifying new markets
• Discovering new sources of supply
• Developing new organisational forms
Garavan pg31

8. EE507 Feb 2019
S Daniels
Sources of Innovative
Opportunity
• The unexpected
– be it the unexpected success or failure or the
unexpected event
• The incongruity
– between what actually happens and what was
supposed to happen
• Innovation based on process need
– the inadequacy in underlying processes, things
that are taken for granted but can be improved
or changed
Drucker pg 31, 32

9. EE507 Feb 2019 S Daniels
Sources of Innovative
Opportunity
• Changes in industry structure or market
structure
– that take everyone by surprise
• Demographics
– population changes caused by changes in birth
rates, wars, medical improvements etc
• Changes in perception, mood, and meaning
– that can be brought about by the ups and downs
of the economy, culture, fashion and so on

10. EE507 Feb 2019 S Daniels
Sources of Innovative
Opportunity
• New Knowledge
– both scientific and non-scientific

11. EE507 Feb 2019 S Daniels
5 Stage Approach to Purposeful,
Systematic Innovation
• Start with the analysis of opportunities, inside the
firm and its industry and in the external
environment. Do not innovate for the future,
innovate for now. Timing is everything. The right
idea at the wrong time is worth nothing
• Innovation is both conceptual and perceptual.
Therefore look at the financial implications but
also talk to people, particularly customers, and
analyse how to meet the opportunity

12. EE507 Feb 2019
S Daniels
5 Stage Approach to Purposeful,
Systematic Innovation
• To be effective an innovation has to be
simple and focussed. Don’t try to be too
clever. Don’t try to do too many things at
once.
• To be effective start small. Don’t be
grandiose. Take an incremental approach
• Aim at leadership and dominate the
competition in the particular area of
innovation as soon as possible

13. EE507 Feb 2019 S Daniels
Intrapreneurship
• Intrapreneurship is defined as
‘entrepreneurship within a big company’
• Most truly successful innovations originate
from large, not small, companies
• For innovation to be successful in a small
company, the company culture must be
receptive to innovation and willing to see
change as an opportunity rather than a threat

14. EE507 Feb 2019 S Daniels
Why Innovate?
• Without innovation business will stagnate
and die

15. EE507 Feb 2019 S Daniels
Identify Future Trends
• Develop a Vision of the Future
• Identify Trends
– Trends in your Market Area
– General Direction in which the World is going
• What will Ireland look like in 2020?
• Where will you business fit?
• What should you be doing to prepare?

16. EE507 Feb 2019 S Daniels
Identify Future Trends
• Read Science Fiction!!!
• Train yourself to watch trends
• Watch for the balancing impact of the
Action = Reaction principle

17. EE507 Feb 2019 S Daniels
Discussion
• Choose an Enterprise which you believe to
be innovative. What was the source of the
innovation? What technology, if any, do you
think it emerged from?
• For each of the 7 sources of innovative
opportunity, give an example of a successful
product or service that resulted from each