ENTREPRENEURSHIP DRIVERS FOR INNOVATION

INNOVATION • Financial pressures to reduce costs, increase

Prof. Jezreel Pattaguan efficiency, do more with less, etc
• Increased competition
WHAT IS INNOVATION?
• Shorter product life cycles
• Process and outcome of creating something new, which is
also of value • Value migration
• Involves the whole process from opportunity • Stricter regulation
identification, ideation, or invention to development, • Industry and community needs for sustainable
prototyping, production marketing and sales development
• Difference with entrepreneurship: entrepreneurship • Increased demend for accountability
only needs to involve commercialization (Schumpeter) • Demographic, social and maket changes
instead of the whole process
• Rising customer expectations regarding service and
• Modern definition: The capacity to quickly adapt by
adapting new innovations and various changes quality
• Changing economy
SCHUMPETER
• Schumpeter argued that innovation comes about through Greater availability of potentially useful technologies
new combinations made by an entrepreneur, resulting in: coupled with a need to exceed the competition in these
o a new product technologies
o a new process
o opening of new market Note: Competition is good in the market and for
o new way of organizing the business consumers because when there is competition, there is
o new sources of supply motivation to innovate, which creates better products
for consumers.
OTHER VIEWS ON INNOVATION
• Gary Hamel argued that today’s marketplace is ● Value Migration - making use of a piece of asset to
hostile to incumbents. make it a more productive use
• Radically reconceiving products and services,
not just developing new products and NEW CONDITIONS FOR INNOVATIONS
services (need to think of more ideas to think ● Large firms depend on small start-ups (e.g. SM being
of new and better products) dependent on farmers for food stocks) for:
• Redefining market space ○ new product development, new knowledge,
• Redrawing industry boundaries (e.g. adding organizational renewal, experimentation with
partner food to coffees, selling beans) business models, opening new markets
DIMENSIONS OF INNOVATION
• Process, product/service, strategy, marketing, NEW DEVELOPMENTS IN INNOVATION RAISES NEW
organizational, business model: can vary from ISSUES AND PROBLEMS
incremental to radical, and impact continuous to • Greater emphasis on commercializing scientific
discontinuous discoveries, particularly in IT and the bio-sciences
• Often divided into five (5) types: • Speed and potential value of scientific progress leads
1. Product innovation - involves introduction to emphasis on solid and well-designed portfolios of
of a new and improved product (e.g. adding research projects
new features in phones) • Universities as active drivers of innovation: Academic
2. Process innovation - implementation of the entrepreneurship and the entrepreneurial university
new and improved product (e.g. simplified • Increased search for radical innovation and top-line
delivery through food panda) growth
3. Marketing innovation - development of
new methods and techniques to market out A SUGGESTED INNOVATION FRAMEWORK
the products (e.g. use of social media instead
of print-out advertisement)
4. Organizational innovation - also known as
social innovation; creation of new ways of
running organization and behavior (e.g.
adjustment to work at home)
5. Business model - changing the way
business is done in terms of capturing value
(e.g. traditional to online transactions)
• Drivers for Innovation

A SUGGESTED INNOVATION FRAMEWORK

• Find what you love to do

- Become an expert in a field you love
- Become passionate about your field

• Seek Opportunities
- Open your mind
 - Mental Floss WHAT IS CREATIVITY?
- Discover your creative rhythm ● Creativity - ability to produce ideas that are both novel
- Health Makes Wealth and valuable
● Three basic ingredients to creativity (Social
psychologist Teresa Amabile):
• Identify Problems and/or Opportunities ○ Domain Skills - to become an expert in a
- Challenge all assumptions field
- Seek opportunities to innovate ○ Creative thinking skills - seeking novelty
and diversity, being independent, being
• Set Goals and Objectives persistent, having high standards
- Define clearly your goals and objectives ○ Intrinsic motivation - reasons for doing
things come from passion and pleasure and
• Seek Novelty in Design not a result of pressure and rewards
- Seek novelty in design
- Diversify CHARACTERISTICS OF CREATIVITY
- Stop looking for the right answer; look for 5 components of creativity (Robert Sternberg):
many right answers ● Expertise - the more we now about a subject or area,
the more likely we are to create something new
• Just Do It ● Imaginative thinking skills - see things in a new
- Do not be afraid to fail way recognize patterns, make connections
- Take risks ● Venturesome personality - seeking new
- Move your idea forward experience, tolerates risks, perseveres to overcome
obstacles
PROBLEM SOLVING, CREATIVITY, AND THINKING ● Intrinsic motivation - being driven more by interest
• Thinking (cognition) and passion
• remember, refers to all mental activities ● Creative environment - support group to support
associated with thinking, knowing, you in making a new idea
remembering and communication.
• Concepts keep things simple.
• For every concept, we create a prototype.
• Problem Solving
Ways to solve problems:
● Trial and error - guessing different
possibilities until we stumble on the correct
answer
● Algorithms - step-by-step procedure that
guarantees a solution
● Insight - sudden or new realization of the
solution to a problem
● Heuristics - make judgments and solve
problems efficiently
○ Availability heuristics - basing
judgments on how available mental
information is
○ Representative heuristic - judging
the likelihood of things in terms of
how well they represent particular
prototypes

OBSTACLES TO PROBLEM SOLVING

● Confirmation Bias - we seek only the evidence that
verifies our ideas and deny information that refute
them
● Fixation - inability to see a problem from a fresh
perspective
○ Mental Set - approaching a problem in a
similar way that has been successful in the
past
○ Functional fixedness - tendency to think of
things only in terms of their usual functions
○ Problem solving ability can be boosted with
more divergent thinking, in lieu of
convergent thinking, which leads us to be
more creative