Week 4-5: Creativity and Innovation in Entrepreneurship

Creativity

The tendency to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.

Creativity

A process of assembling ideas by recombining elements already known but wrongly assumed to be unrelated to each other.

Several Key Elements that are Worth Considering in Creativity

1. Process 2. Ideas 3. Recombining

3 Reasons Why People are Motivated to be Creative

1. Need for novel, varied, and complex stimulation 2. Need to communicate ideas and values 3. Need to solve problems

Creative Process

Step 1: Opportunity or Problem Recognition, Step 2: Immersion, Step 3: Incubation, Step 4: Insight, Step 5: Verification and Application

Step 1: Opportunity/Problem Recognition

A person discovers that a new opportunity exists or a problem needs to be resolved.

Step 2: Immersion

The individual concentrates on the problem and becomes immersed in solving it, collecting information, and considering alternatives and solutions.

Step 3: Incubation

The person keeps the assembled information in mind for a while.

Step 4: Insight

The person realizes a problem-conquering solution, often in a random moment or unexpected time.

Step 5: Verification and Application

The individual attempts to prove that creative solutions have merit and business viability.

Personality Traits of Creative People

1. Persistence 2. Self-Confidence 3. Independence 4. Attraction to Complexity 5. Tolerance of Ambiguity 6. Intuitiveness 7. Have Broad Interests 8. Are Energetic 9. Drive to Achieve 10. Love their Work 11. Take Risks

Barriers to Creativity

1. Excessive focus on extrinsic motivation 2. Limits set by superiors 3. Critical evaluation 4. Close, controlling supervision 5. Competition in a win-lose situation 6. Control of decision making 7. Control of information 8. Blindly following the rules 9. Constantly being practical 10. Becoming overly specialized 11. Fearing looking foolish 12. Fearing mistakes and failure

Innovation

The implementation of new ideas at the individual, group, or organizational level.

Innovation

A process of intentional change made to create value by meeting opportunity and seeking advantage.

Innovation

1. Process 2. Intentional 3. Change 4. Value 5. Opportunity 6. Advantage

Process

Innovation is a process (implying, among other things, that it can be learned and managed).

Intentional

That process is carried out on purpose.

Change

It results in some kind of change.

Value

The whole point of the change is to create value in our economy, society and/or individual lives.

Opportunity

Entrepreneurial individuals enable tomorrow’s value creation by exploring for it today: having ideas, turning ideas into marketable insights, and seeking ways to meet opportunities.

Advantage

At the same time, they also create value by exploring the opportunities they have at hand.

Types of Innovation

Invention, Extension, Duplication, Synthesis

Invention

Described as the creation of a new product, service, or process. (Types of Innovation)

Invention

Something that has not been tried before. (Types of Innovation)

Extension

The expansion of an existing product, service or process. (Types of Innovation)

Extension

This would mean that the entrepreneur takes an existing idea and applies it differently. (Types of Innovation)

Duplication

Copying (replicating) an existing product or service and then adding the entrepreneur. (Types of Innovation)

Synthesis

A combination of more than one existing products or services in to a new product or service. (Types of Innovation)

Synthesis

This means that several different ideas are combined in to one new product or service. (Types of Innovation)

Myths of Innovation

1. Innovation is planned and predictable. 2. Technical specifications should be thoroughly prepared in advance.

Myths of Innovation

3. Creativity relies on dreams and blue-sky ideas. 4. Big projects will develop better innovations than smaller ones.

Myths of Innovation

5. Technology is the driving force of innovation and success.

Entrepreneurship

Derived from the French word “Entreprendre”, which means “to undertake.”

Entreprendre

Entrepreneurship was derived from the French word _, which means "to undertake."

To Undertake

Entreprendre means __.

Richard Cantillon

Entrepreneurs are non-fixed income earners who pay known costs of production but earn uncertain incomes.

Jean-Baptiste Say

An entrepreneur is an economic agent who unites all means of production- land of one, the labor of another, and the capital of yet another, and thus produces a product.

David McClelland

An entrepreneur is a person with a high need for achievement. He is energetic and a moderate risk-taker.

Peter Drucker

An entrepreneur searches for change, responds to it, and exploits opportunities. Innovation is a specific tool of an entrepreneur; hence, an effective entrepreneur converts a source into a resource.

Ronald May

An Entrepreneur is someone who commercializes his or her innovation.

Schumpeter

Entrepreneurs are innovators who use a process of shattering the status quo of the existing products and services to set up new products.

Frank H. Knight

Entrepreneurship is about taking risks.

Knight's 3 Types of Uncertainty: Risk, Ambiguity, True Uncertainty

Risk

Type of Uncertainty: Measurable statistically (such as the probability of drawing a red color ball from a jar containing 5 red balls and 5 white balls).

Ambiguity

Type of Uncertainty: Hard to measure statistically (such as the probability of drawing a red ball from a jar containing 5 red balls but with an unknown number of white balls).

True Uncertainty

Type of Uncertainty: Impossible to estimate or predict statistically (such as the probability of drawing a red ball from a jar whose number of red balls is unknown as well as the number of other colored balls)

Creativity

Thinking new things, and innovation is doing new things.

Innovation

Ability to apply creative solutions to those problems and opportunities to enhance people's lives or to enrich society.

Entrepreneurship

Creativity + Innovation equals to ___.

Entrepreneurship: Creating value in the marketplace

Creativity: Thinking new things -> Innovation: Doing new things -> ____.