Developing Creativity and Understanding Innovation

Topics: Creativity, Venture capital, Innovation Pages: 18 (4790 words) Published: May 10, 2012



I.Innovation and the Entrepreneur
A.Innovation is a key function in entrepreneurship
B.More than just a good idea

II.The Role of Creativity
A.The nature of the creative process:
1.Background or knowledge accumulation provides the individual with a variety of perspectives on the situation. This helps the entrepreneur develop a basic understanding of the product or venture to be undertaken. 2.The incubation process allows the individual to subconsciously mull over the information gathered during the preparation stage. The individual "sleeps on it." 3.The idea experience is the time when the idea or solution the individual is seeking is discovered. 4.Evaluation and implementation. Successful entrepreneurs must be able to identify workable ideas which they have the skills to implement. B.Developing your creativity:

1.Recognizing relationships: Many inventions and innovations are the result of the inventor's seeing new and different relationships. Example: Adding fruit juice to soft drinks to create "Slice." 2.Developing a functional perspective: You must begin to look at people and things in the environment in terms of how they complement your attempts to satisfy needs and complete projects. 3.Eliminating muddling mind-sets: Mental habits which block or impede creative thinking. They include: a.Either/or thinking

b.Security hunting
d.Probability thinking
C.The creative climate: he proper climate must exist for creative owners and managers. Some characteristics include: 1.A trustful management which does not over control personnel. 2.A large variety of personality types.

3.Enjoyment in experimenting with new ideas.
4.The selection and promotion of employees on basis of merit.

III.The Innovation Process
A.Types of innovation
B.Sources of innovation
1.Unexpected occurrences
a.Unexpected successes or failures which prove to be a major surprise. 2.Incongruities
a.Exist when there is a gap or difference between expectations and reality 3.Process needs
a.Exist whenever there is demand for the entrepreneur to innovate and answer a particular need. 4.Industry and market changes
a.There are continual shifts in the marketplace caused by advances in technology, industry growth, etc. The entrepreneur needs to be able to take advantage of any resulting opportunity. 5.Demographic changes

a.Arise from changes in population, age, education, occupation, geographic locations, etc. 6.Changes in perception
a.Occur in people's interpretation of facts and concepts. 7.Knowledge-based concepts
a.The creation or development of something new.
C.The major myths of innovation
1.Innovation is planned and predictable.
2.Technical specifications should be thoroughly prepared. 3.Creativity relies on dreams and blue-sky ideas.
4.Big projects will develop better innovations than small ones. 5.Technology is the driving force of innovation and success. D.Principles of innovation
1.Be action-oriented
2.Make the product, process, or service simple and understandable 3.Start small
4.Aim high
5. Learn from failures

IV.Financial Support for Innovation
A.Venture capital environment
1.The venture capital funds have increased dramatically during the last ten years. a.In 1987 there were 587 U.S. venture capital firms, a 148 percent increase...
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