This document summarizes key concepts from a lecture on innovation and entrepreneurship. It defines entrepreneurship as shifting resources to higher productivity and innovation as creating new value from existing resources. Successful companies foster innovation through practices like rewarding innovators, dividing into autonomous divisions, and changing rules to support innovation. National policies that promote creative destruction and sunset laws can encourage innovation more than central planning. The presentation emphasizes that both social and economic innovations have the most impact and discusses characteristics of innovative companies and strategies for different types of innovators.

1. Innovation and
Entrepreneurship
Agsb entrepreneurship elective
lecture

2. Book by Peter Drucker,
management guru

3. Peter Drucker

4. Definitions
• Entrepreneurship – “shift of economic
resources out of an area of lower to higher
productivity of greater yield.” J. B. Say
1800
• Innovation – “creating value out of existing
resources.” A specific tool of
entrepreneurship.
They go hand in hand!

5. Innovation & Entrepreneurship

6. Entrepreneurship

7. NEW VALUE FROM EXISTING
• Entrepreneurship – “destroying old order
and creating something new.” Schumpeter
• Innovation – innovare to make new
- creating value from existing things
processes
- not just new things; they have to be
NEW VALUE

8. Types of innovation
• Technical
• Social
• Economic
Most innovations are social and economic.
THEY HAVE THE MOST IMPACT!

9. Social innovations
• Textbooks
• Hospitals
• Management
• Organizations
• Universities
• Night/adult schools

10. Technological Innovations

11. Review
• Creativity
• Innovation
• Inventor
• Entrepreneur
Who was Edison?

12. Is innovation only for small
businesses?

13. Characteristics of innovation
• It is hard work
• It is systematic
• It focuses on opportunities; not problems
• It is focussed
• It is customer-centric
• Its effect is felt in the economy and society

14. Practices of innovative companies
1. Responsibility for innovation
2. Rewarding innovators
3. “Hiving off” – divisionalisation
4. Changing corporate rules to nurture
innovation

15. Skunk works at Lockheed

16. 3M

17. 3m products

18. R & D

19. Johnson & Johnson

20. R & D

21. R & D

22. Innovation Strategies

23. 1.“The Fustest with the
Mostest”
Original innovations

24. At the Lead Pack..

25. Example companies

26. Original innovators

27. 2. Creative imitators
“Not the orig..”

28. “Wheel suckers?”

29. Examples
• IBM
• J &J
• Seiko
• National
• Swatch

30. Battle of the watches

31. 3. Creating main value
propositions
Business model

32. How does a company earn? –
business model

33. MVP
1. Utility to the customer
2. Price
3. Customer’s reality
4. True value

34. Innovation policies in nations
WHAT WILL NOT WORK:
• CENTRAL PLANNING
• RELYING ON TECHNOLOGICAL
INNOVATION ONLY

35. Communist Party approving a
central dev’t plan

36. What will work?
CREATIVE DESTRUCTION OF
THE OBSOLETE:
• New tax laws that will favor sale
of non – performing assets.
• Sunset laws for obsolete gov’t
agencies.

37. “Every generation needs a
revolution”
-Thomas Jefferson

38. French Revolution

39. Entrepreneurial Revolution?

40. Another revolution in Egypt –
entrepreneurial revolution

41. Vernuft wind Unsinn,Wohltat Plage
“Reason becomes nonsense, Boons
afflictions”
Goethe

42. Obsolescence

43. Old Manila

44. The new gets old

45. Thank you!
Profjorge.entrep@gmail.com

46. acknowledgement
• The picture and photographs are from
Google images;
• The bulk of the presentation are
interpretation of the work of Peter
Drucker’s book on innovation and
entrepreneurship. (creative innovation?)