Hu

1. INNOVATION
&
ENTREPRENEURSHIP
Today’s Class

3. The DIFFERENCE is CLEAR…
STEVE JOBS O. KALLASVUO
Apple Rehired Him as
CEO Apple
Fired as CEO of Nokia in
2010
On top of the innovation
and technology industry
Unable to compete with
upcoming small rivals
Investors rejoice as
reserves soar
Investors funds at stake
Innovating for the future Innovating for the
present market

4. Topic Objectives
 Participants should have been acquainted with
 The importance of innovation to new ventures and
large established firms
 Idea generation and opportunity identification.
 Tools for organizing and managing innovation within
existing firms

5. What is Innovation?
Peter Drucker Tool used by
entrepreneurs to exploit
change as an opportunity
Is a discipline that can be
learnt and practiced

6. What is Innovation?
Invention
 The formulation of new
ideas for products/service
or processes
 Creation of a product or
introduction of a process
for the first time.
 E.g. Microprocessor, GPS
Innovation
 The practical application of
new inventions into marketable
products or services
 Significant and continual
upgrade of inventions
 E.g. Apple didn’t invent GPS.
So, incorporating GPS into a
phone is innovation, not
invention.

7. Kinds of Innovation
 Indigenous innovation
 process of improving the quality and lowering the
cost of world-leading technologies transferred from
abroad (Lazonick & Li, 2012)
 Disruptive innovation
 create a new market and value network, and
eventually disrupts an existing market and value
network (over a few years or decades), displacing an
earlier technology.

8. Kinds of Innovation
 Systematic innovation
 A set of interconnected innovations, where each is
dependent on the other, with innovation both in the
parts of the system and in the ways that they interact.
 Social innovation
 new solutions that simultaneously meet a social
need (more efficiently and effectively than existing
solutions) and lead to new or improved capabilities,
assets and/or relationships.

9. Kinds of Innovation
 Many important innovations are a by product
of accidents—the key is to be prepared for
the unexpected.
 Innovation cannot always be planned—
accidents happen.
 Be prepared to recognize serendipitous
opportunity.
 Understand the nature of breakthrough
inventions in your industry and plan accordingly.

10. What forms can innovation take?
 Process (new biotechnology procedures)
 Product (Bt cotton)
 Mechanical tractors, cars
 Chemical pesticides
 Biological seed varieties.
 Managerial IPM, extra pay for work, overtime.
 Institutional patents, banks, stock market,

11. 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

12. Why innovation?
 It is a necessity in today’s global business setting
 It is the ultimate source of competitive advantage
 It is required take greater advantage of new
markets and opportunities during boom times
 It is required to maintain and grow existing
business during downward cycles

13. What are the benefits of innovation?
Product/Service Innovation
 First mover advantage
 Higher prices and
profitability
 Added value
 Opportunity to build early
customer loyalty
 Enhanced reputation as an
innovative company
 Public Relations
 Increased market share
Process Innovation
 Reduced costs
 Improved quality
 More responsive
customer service
 Greater flexibility

14. What is Entrepreneurship?
 Shifting economic resources out of an
area of lower and into an area of higher
productivity and greater yield.
 A commitment to making a positive and
enormous difference

15. What is Innovative Entrepreneurship?
 Aiming at leadership if not at dominance of a
new market or industry
 Taking something just created by somebody
else and improving upon it.
 Taking what the market leader considers its
strengths and turns those strengths into the
very weaknesses that defeat it (e.g. Apple Inc.)

16. • Converting an existing product or service
into something new by changing its utility,
value and economic characteristics.
 An entrepreneur is one who reorganizes
economic activity in an innovative and
valuable way. - Joseph Schumpeter
What is Innovative Entrepreneurship?

18. Generating Ideas…which way?
Inside-out Approach Outside-in Approach
 A.k.a “idea generation”
 Identify your most
promising skills
 Use skills as
foundation for a
business
 A.k.a “Opportunity
recognition”
 What need in the
market is not filled?
 Use environmental
scanning
 Searching for trends
that can become
opportunities

19. Sources of Innovation – P.Drucker
1. The unexpected
 The unexpected success, failure or outside event.
2. The incongruity
 between reality and what “ought to be.”
3. Innovation based on process need
4. Changes in industry/market structure
 that catches everyone unawares.
5. Demographics– population changes
6. Changes in perception, mood and meaning
7. New knowledge, scientific and non-scientific.

20. Organizing & managing
innovation within existing
firms

21. Organizational Entrepreneurship
 Such is concerned with:
 The discovery of profitable opportunities
 The exploitation of profitable opportunities
 Firms that encourage entrepreneurship are:
 Risk takers
 Committed to innovation
 Proactive in creating opportunities
 Not waiting to respond to opportunities created by
others

22. Promoting Workplace Innovation
 Employees are
encouraged to think &
work differently
 What to do to deliver
more value to
clients/customers?
 Innovation can come
from anyone/place
 Collaboration rocks
 Organize around
employee interests.
 Leaders are involved
 Celebrate innovative
ideas

23. Stakeholders in Innovation
 Universities
 Entrepreneurs, start-
ups & venture
capitalists
 Existing corporations
 Potential technology
adopters
 Government regulators
 Environmental & other
special interest
organizations
 Consumers
 Bill Gates has said “your
most unhappy customers
are your greatest of
learning” ….for product
improvement

24. 7 Principles of Innovation –Steve Jobs
1. Do what you love. NICHE
2. Put a dent in the universe. IMPACT
3. Kick-start your brain. INSPIRATION
4. Sell dreams, not products. IDEAS
5. Say no to 1,000 things. FOCUS
6. Create insanely great expectations QUALITY
7. Master the message EXPERTISE

25. In conclusion...
 Innovative entrepreneurs
 Have a keen eye for identifying and analyzing
opportunities, within and outside firm, industry
and in the external environment.
 Innovate for the present and future
 Understand that timing is everything.
 Recognize that one can make a big difference
by taking incremental steps