Entrepreneurship and Innovation Entrepreneurship • Entrepreneurship is concerned with initiation of change. It challenges and perhaps destroys established order and traditions. It has no clear and fast rules. It has no rule book. As a consequence there are winners and losers from the process. It is not all outcomes of the process of entrepreneurship that are positive, even though this is the hope. • Schumpeter defined an entrepreneur as a “person who destroys the existing economic order by introducing new products and services, by creating new forms of organization or by exploiting new role materials. Factors that influence entrepreneurship • Personal Attributes- Most people who are entrepreneurial exhibit higher levels of the need to achieve and a higher locus of control than non entrepreneurs. This means that they have a higher desire to control their fate. • Environmental Factors- Within the environmental factors we should be able to include such factors as the role of culture and society in stimulating or stifling of entrepreneurship behavior. Such as Economic conditions, Accessibility to capital, Role models or examples of entrepreneurial action. • Sociological Factors- Other than role models there are other factors that influence entrepreneurship. These include family responsibilities. It is relatively easy for a young person to start a business than older people with school of college going children. The younger one is the more energetic they are also to run around for the business. Unfortunately young people normally have lesser access to resources than older people who also have the experience necessary to operate a company. Thus, there is a trade-off between youthfulness and inexperience but with energy and elderliness with experience but with low energy and family commitments. Characteristics of Entrepreneurs • There are many characteristics, features, attitudes and behaviors that are generally associated with entrepreneurs. The dominant ones include; • Determination- They are committed to their idea and apply themselves totally. They seldom give-up even when confronted with obstacles that may appear insurmountable. • Tolerance of Risk, ambiguity and uncertainty- successful entrepreneurs take calculated risks, minimize risks and have the ability to resolve problems • Committed. Building a successful business requires an absolute commitment. It takes a lot of work and there will be times when you become discouraged. It is during these times that you must be steadfast, faithful and committed to your vision. • Dependable. This should go without saying but I will say it anyway. There is a strong positive relationship between your perceived level of reliability and the success of your business. No matter what type of business you have, your customers expect you to be dependable. Characteristics of Entrepreneurs • Possess technical skills and knowledge. Every business requires unique technical skills and knowledge on part of the owner. You have to be good at what you do for your business to succeed. This often means getting additional education and training on an ongoing basis, sometimes for the purpose of obtaining specific credentials (e.g. Certifications, licenses). • Proactive and not reactive. Successful entrepreneurs anticipate problems in advance and deal with them before they occur. If you simply react to problems and issues as they arise, you may get overwhelmed. Characteristics of Entrepreneurs • Have a higher need to achieve. Successful entrepreneurs are achievement-oriented. They value accomplishment and the intrinsic rewards that go along with achieving difficult goals. It is a strong motivator for most business owners. • Resourceful. Most new businesses have limited resources such as money, information and time. Successful entrepreneurs figure out how to get the most out of these resources. They are masters at stretching a dollar and making a few resources go a long way. Types of Entrepreneurs • Innovative Entrepreneur: These are the ones who invent the new ideas, new products, new production methods or processes, discover potential markets and reorganize the company’s structure. These are the industry leaders and contributes significantly towards the economic development of the country. The innovative entrepreneurs have an unusual foresight to recognize the demand for goods and services. They are always ready to take a risk because they enjoy the excitement of a challenge, and every challenge has some risk associated with it. Types of Entrepreneurs The Imitator • These entrepreneurs try to play safe by copying a successful or going to a successful business model. They iterate a certain feature or innovation in a particular product or the business model to make it more appealing and have a competitive edge over the current market. The greatest advantage of copycat entrepreneurs is that they know the opportunities and shortcomings of the business and have a proven business model to work on. Characteristics of Imitators • They are risk takers • They are adamant about what they do. • They have an ability to build upon an existing idea • They are great researchers • They don’t follow or do things on other people’s terms. Types of Entrepreneurs The Researcher • These entrepreneurs not only believe in original ideas but also ideas which are viable. They believe in starting a foolproof business and spend a lot of time in choosing the right one. Characteristics of Researchers • These are the perfectionists • They are the problem solvers • They are critical thinkers • They are the visionaries. Types of Entrepreneurs The Buyer These entrepreneurs have huge pockets and are ready to invest in any promising venture. They might already have an experience in running a successful business and look for more opportunities. Characteristics of Buyers • They act as a guide to new ventures • Huge Pockets • They look for original & different ideas • They have a thirst for knowledge • They have a great network Types of Entrepreneurs The Solopreneur • These entrepreneurs choose to start a business on their own with no intention of ever adding staff. They are the chief cook and the sole person responsible for the fate of the business. Characteristics of Solopreneurs • They are passionate workaholics • They are versatile as they handle every aspect of their business. • They create their own schedule • Their personal and corporate brand is interlinked • They love adventure Innovation • An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations. • The minimum requirement for an innovation is that the product, process, marketing method or organizational method must be new (or significantly improved) to the firm. • Innovation activities are all scientific, technological, organizational, financial and commercial steps which actually, or are intended to, lead to the implementation of innovations. Innovation activities also include R&D that is not directly related to the development of a specific innovation. • An innovative firm is one that has implemented an innovation during the period under review. Types of Innovation • A product innovation is the introduction of a good or service that is new or significantly improved with respect to its characteristics or intended uses. This includes significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics. Product innovations can utilize new knowledge or technologies, or can be based on new uses or combinations of existing knowledge or technologies. • A process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software. Process innovations can be intended to decrease unit costs of production or delivery, to increase quality, or to produce or deliver new or significantly improved products. Types of Innovation • A marketing innovation is the implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing. Marketing innovations are aimed at better addressing customer needs, opening up new markets, or newly positioning a firm’s product on the market, with the objective of increasing the firm’s sales. • An organizational innovation is the implementation of a new organizational method in the firm’s business practices, workplace organization or external relations. Organizational innovations can be intended to increase a firm’s performance by reducing administrative costs or transaction costs, improving workplace satisfaction (and thus labor productivity), gaining access to non-tradable assets (such as non-codified external knowledge) or reducing costs of supplies. Drivers of Innovation Innovation is critical not only to business success but for survival. New ways of delivering ideas ,visual and content changes keep people interested and coming back. Innovation is driven by the following; • Technology- Advancement in technology keep people on their toes looking for ways to do things better and keep customers interested hence upgrade of products and services. • Demographics- these are the numbers and characteristics of the market, how many young people, elderly, students are depending on the products and services you are providing. The demographics will drive innovation to keep them or entice them by offering new products Drivers of Innovation • Resources. Does the group have what it needs to do the work? Or is a lot of time and energy going toward fighting for or juggling limited resources? Look at 2 areas: • Sufficient Resources: Access to appropriate resources, including funds, materials, facilities, and information. • Realistic Workload Pressures: Absence of extreme time pressures, unrealistic expectations for productivity, and distractions from creative work.
