entrepreneurship 02-Meeting - Intro to Innovation

8/9/2019 entrepreneurship 02-Meeting - Intro to Innovation

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Innovation


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What is innovation?

Innovation is the process and outcome of creating

something new,which is also of value.

Innovation involves thewhole process from

opportunity identification, ideation or invention to

development, prototyping, production marketing

and sales,whileentrepreneurship only needs to

involve commercialization (Schumpeter).


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What is innovation?

Today it is said to involve thecapacity to quickly

adaptby adopting new innovations (products,

processes, strategies, organization,etc)

Also, traditionally the focus has been on new

products or processes, but recently newbusiness

models have come into focus, i.e. theway a firm

delivers value and secures profits.


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What is innovation?

Schumpeter argued that innovation comesabout through new combinations made by

an entrepreneur, resulting in a new product,

a new process,

opening of new market,

newway of organizing the business

new sources of supply


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Dimensions of innovation

There are several types of innovation

Process, product/service, strategy,

which can vary in degree of newness:

Incremental to radical,

and impact:

continuous to discontinuous


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Drivers for innovation Financial pressures to reduce costs, increaseefficiency, do more

with less,etc

Incr eased competition

Shorter product life cycles Value migration

Stricter regulation

Industry and community needs for sustainable development

Incr eased demend for accountability

Demographic, social and maket changes Rising customerexpectations regarding service and quality

Changing economy

Gr eater availability of potentially useful technologies coupled witha need to exceed the competition in these technologies


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What is innovation?

Gary Hamel argued that todays market

place is hostile to incumbents,who now

needs to conduct radical business

innovation:

Radically reconceiving products and services,

not just developing new products and services Redefining market space

Redrawing industry boundaries


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New conditions for innovation

Small start-up entrepreneurs increasingly

depend on large firms:

as suppliers or customers

for venture finance,

forexit opportunites,

for knowledge (production, markets and R&D) and for opening new markets.


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New conditions for innovation

Large firms increasingly depend on small

start-ups for NPD,

as suppliers of new knowledge (which they cannot

develop themselves),

or organizational renewal, forexperimentation with

busienss models, for opening new markets,etc


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New developments in innovation

raises new issues and problems

Greateremphasis on commercializing scientific

discoveries, particularly in IT and the bio-sciences

Speed and potential value of scientific progress leads toemphasis on solid and well-designed portfolios of

research projects

Universites as active drivers of innovation: Academic

entrepreneurship and theentrepreneurial university

University-industry partnerships

Incr eased search forradical innovation and top-line

growth


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Types of Innovation

Invention has been described as the creation of anew product, service or process.

Extension is said to be theexpansion of a product,

service or process.

Duplication has been defined as replication of analready existing product, service or process.

Finally, the combination ofexisting concepts and

factors into a new formulation has been identified

as synthesis.


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Examples

3M is quite possibly the most innovative company. 3M is best known for its household brands such as Post-it Note, Scotchgard,

Scotch tape, and many more.

3M initially failed in its mining business, and eventually stumbled onto most of thesuccessful innovations that we know 3M for, including Post-It, Masking and Scotchtape.

3M institutionalized such mechanisms to drive Innovation as the "15 percent rule"

- tech

nical peopl

espend up to 15 p

ercent of t

heir tim

eon proj

ects of t

heir o

wnchoosing or initiative, "25 percent rule" - each division should produce 25 percent

of annual sales from new products and services introduced in the previous fiveyears (which later increased to 30 percent), "Golden Step" award - given to thosecreating successful new business ventures originated within 3M.

Mor e growth mechanisms were created to stimulate internal entrepreneurship, testnew ideas, create unplanned experimentation, share new ideas, develop newinnovation, cross-fertilize technology, ideas and innovation, stimulate innovation

via customer problems, speed product development and market introduction cycles,provide profit sharing, and promote "a small company within a big company feel"by creating small autonomous business units and product divisions -- over a dozenbusiness processes to stimulate creativity, innovation and growth -- in early 19903M had over sixty thousand products and over forty separate product divisions.

entrepreneurship 02-Meeting - Intro to Innovation

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