“Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.” Peter Drucker
By definition, innovation is the process of translating an idea or invention into a good or service that creates value or for which customers will pay. The actions required to create new ideas, processes or products which when implemented lead to positive effective change. While invention requires the creation of new ideas, processes or products, innovation moves one step further and requires implementation of the inventive act.
Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service. It is capable of being presented as a discipline, capable of being learned and practiced. Entrepreneurs need to search purposefully for the sources of innovation, the change and their symptoms that indicate opportunities for a successful innovation. And they need to know and to apply the principles of successful innovation.
One of the most common forms of innovation is the creation of new product. The new product may exploit an established technology or it may be the outcome of a whole new technology. This newer idea may also define the need of the people that has not been yet transferred into a business and an entrepreneurial mind may convert the existing need into a business that may benefit as basic rule of business is to fulfill the need of the customer.
Entrepreneurs through innovation may fulfill an already existing need or they may create a new need by innovating a unique inspiring idea that may appeal a lot of customers and can result into a profitable business.
Any new business has to define the new idea it is presenting in order to persuade its customers; how is it unique from the rest of its competitors. Once an entrepreneur would be successful in bringing forward the unique innovative aspects for which customers are willing to pay, it becomes an entrepreneurial idea.
Innovation starts with creativity. Creativity is the capability or act of conceiving something original or unusual. Innovation is the implementation of something new. Invention is the creation of something that has never been made before and is recognized as the product of some unique insight. Entrepreneurs are the people that innovate, and entrepreneurship is doing this through the vehicle of a new venture, hence innovation is the process of entrepreneurship.
Innovation is a dual process, it is invention and implementation and is an important characteristic of an entrepreneur. The entrepreneur sees new opportunities to exploit and is willing to bear calculated risk. Hoffman (1998) found that the entrepreneur’s innovation can be explained by his or her educational level.
" Everybody wants to be innovative; many companies and ideas are proclaimed to be innovative and no one doubts that innovation is a money spinner." James Dyson
Creativity leads to Newer Ideas:
Let us have a review of the process of creativity, innovation and entrepreneurship. Creativity is marked by the ability to create, bring into existence, to invent into a new form, to produce through imaginative skill, to make to bring into existence something new. Creativity is also an attitude, the ability to accept change and newness, a willingness to play with ideas and possibilities, a flexibility of outlook, the habit of enjoying the good, while looking for ways to improve it. The creative person realizes that there are other possibilities like peanut butter and banana sandwiches, or chocolate-covered prunes.
Creative thinking brings solutions to Problems:
Creative thinking is the art of generating solution to problems by the force of imagination and reasoning. It is an activity of the mind seeking to find answer to some of life’s questions. There are great business opportunities in applying creative thinking to solving mankind’s crying need for basic products and basic support services, better homes, better jobs, and a better way of life.
There are people who have converted their creative thinking into visible products; e.g. Bill Gate and the computer, Graham Bell and the telephone, Michael Faraday and electricity, Isaac Newton and physical law of science, etc.
Entrepreneurship and Creativity:
The entrepreneur is primarily concerned with developing new products, processes or markets, the ability to bring something new, product, processes into the market. The entrepreneur indulges in original thinking more than any other person thinks and he is able to produce solutions that fly in the face of established knowledge.
Creative outcomes begin with recognition of a problem or anticipation of an opportunity, and then, through understanding the situation and reflecting on the issues, new linkages are contemplated and possible new combinations of components are aired: From this emerge visible solutions or possibilities that are subjected to valuation, which may be continuous with judgment being suspended while the search process is prolonged in pursuit of genuine newness. Entrepreneurs take bold creative steps but situations encourage creativity.
Creativity and Innovation:
Innovation is the process of bringing the best ideas into reality, which triggers a creative idea, which generates a series of innovative events. Innovation is the creation of new value. It is the process that transforms new ideas into new value- turning an idea into value.
Innovation requires a fresh way of looking at things, an understanding of people, and an entrepreneurial willingness to take risks and to work hard. An idea doesn’t become an innovation until it is widely adopted and incorporated into people’s daily lives.
A key part of innovating is convincing other people that your idea is a good one – by enlisting their help, and, in doing so, by helping them see the usefulness of the idea- Art Fry.
Entrepreneur, Entrepreneurship and Innovation:
Entrepreneurs have been described as people who have the ability to see and evaluate business opportunities, gather the necessary resources to take advantage of them and initiate appropriate action to ensure success. Creative entrepreneurs possess high levels of energy and great degrees of perseverance and inauguration, which combined with a willingness to take moderate, calculated risk, enable them to transform what began as a very simple ill- defined idea or hobby into something concrete.
Entrepreneurship the whole process whereby individuals become aware of the opportunities that exist to empower themselves, develop ideas, and take personal responsibility and initiative. In a broader sense, entrepreneurship helps young men and women develop new skills and experiences that can be applied to many other challenges in life. Entrepreneurship is therefore a key priority area with the potential to stimulate job and wealth creation in an innovative and independent way.
Innovation is the key to entrepreneurship. The entrepreneurs are the “dreamers”, who take hands on responsibility for creating innovation. It is the presence of innovation that distinguishes the entrepreneur from others.
Successful entrepreneurs require an edge derived from some combination of a creative idea and a superior capacity for execution. The entrepreneur’s creativity may involve an innovation product or a process that changes the existing order. Or entrepreneur may have a unique insight about the course or consequence of an external change. Entrepreneurship is the vehicle that drives creativity and innovation.
Innovation creates new demand and entrepreneurship brings the innovation to the market. Innovation is the successful development of competitive edge and as such, is the key to entrepreneurship.
Entrepreneurship is all about an idea that creates differentiated business value to one's customers. N. R. Narayana Murthy