Innovation Management

Topics: Innovation, Entrepreneurship, Joseph Schumpeter Pages: 49 (15401 words) Published: January 2, 2014
Innovation, Entrepreneurship & CSR Summary

Chapter 1: The Innovation Imperative

Innovation matters – the logic is simple, if we don’t change what we offer the world and how we create and deliver them, we risk being overtaken by others who do. At the limit it is about survival – and history is very clear on this point; survival is not compulsory.

Innovation is strongly associated with growth. New business is created by new ideas, by the process of creating competitive advantage in what a firm can offer. Virtually all of the economic growth that has occurred since the 18th century is ultimately attributable to innovation. One person’s problem is another’s opportunity and the nature of innovation is that it is fundamentally about entrepreneurship.

Entrepreneurship: the skill to spot opportunities and create new ways to exploit them is at the heart of the innovation process. Entrepreneurs are risk-takers, but they calculate the costs of taking an idea forward against potential gains if they succeed in doing something different – especially if that involves upstaging the players already in the game.

Innovation is driven by the ability to see connections, to spot opportunities and to take advantage them. Equally important is the ability to sport where and how new markets can be created and grown. Innovation isn’t just about opening up new markets, it can also offer new ways of serving established and mature ones. Innovation can also be found in services!

Innovation offers huge challenges and opportunities for the public sector. Pressure to deliver more and better services without increasing the tax burden is a puzzle likely to keep many civil servants awake at night. It doesn’t happen automatically, it is driven by entrepreneurship: a potent mixture of vision, passion, energy, enthusiasm, insight, judgment and plain hard work which enables good ideas to become a reality. The power behind changing products processes and services comes from individuals, whether acting alone or embedded within organizations that make innovation happen.

Peter Drucker Definition of Entrepreneurship: a human characteristic which mixes structures with passion, planning with vision, tools with the wisdom to use them, strategy with the energy to execute it and judgment with the propensity to take risks.

Different types of entrepreneurs:
Internal entrepreneurs: also called intrapreneurs, corporate entrepreneurs or corporate venture departments, provide the drive, energy and vision to take risky ideas forward inside that context; Social entrepreneurship: the passion to change things may not be around creating commercial value but rather in improving conditions or enabling change in the wider social sphere or in the direction of environmental sustainability

The idea of entrepreneurship is driving innovation to create value, social and commercial, across the life cycle of organizations. It contains 3 main concepts: 1. Innovation: a process which can be organized and managed; 2. Entrepreneurship: the motive power to drive this process through the efforts of passionate individuals, engaged teams and focused networks; 3. Creating value: the purpose of innovation, whether expressed in financial terms, employment or growth, sustainability or improvement of social welfare.

It takes a particular mix of energy, insight, belief and determination to push against these odds, and even more judgment to know when to stop banging against the brick wall and move on to something else. Successful entrepreneurs are very often those who have recognized that failure is an intrinsic part of the process. Next to individual entrepreneurs, companies also encounter problems with innovation. Many SMEs fail because they don’t see or recognize the need for change. They are inward looking, too busy fighting fires and dealing with todays crises to worry about emerging storm clouds on the horizon.

A common problem for successful companies occurs...
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