entrepreneurship, innovation, creativity

ENTREPRENEURS + INNOVATION + CREATIVITY
Lecturer Monika Skaržauskaitė

PLAN
1. Articles from online blogs and magazines
2. Student presentations – entrepreneurs of
their choice
3. Who is entrepreneur?
4. Entrepreneurship and innovation
5. Creativity

Student

Site

Student

Site

Arrifah Ratna
Dewi

http://www.wired. Qusay Alobaidi
com/

http://www.wired.
com/

George-Teodor
Moțica

http://www.busin Konstantine
essweek.com/blog Gakharia
s/the-newentrepreneur

http://www.busin
essweek.com/blog
s/the-newentrepreneur

Kyunghwan Yoon

http://gigaom.co
m/

Mubashir Iqbal

http://gigaom.co
m/

Patrick-Eugen
Moraru

mashable.com

Keisha Laraine
Ingram

mashable.com

Emre Kaplan

http://under30ce
o.com/

Ehizojie Abdullahi
Haruna

http://under30ce
o.com/

Hamidullah Nasiri

http://www.inc.co Alexios Vasileiadis
m/

http://www.inc.co
m/

Min Sun Kim

http://www.young Ayaz Guliyev
upstarts.com/

http://www.young
upstarts.com/

DEMOGRAPHICS OF ENTREPRENEUR ARE
CHANGING

Students presentations:
ENTREPRENEUR OF MY
CHOICE

1. why you chose this person in particular?
2. why this businessmen can be held an
entrepreneur?
3. why his business is successful?
4. what factors provoked his creative thinking?
+ write down attributes which makes him/her
successful of your entrepreneur on the board

1. Min Sun Kim
11. Ehizojie Abdullahi
Haruna
2. Qusay Alobaidi
3. Konstantine Gakharia 12. Alexios Vasileiadis
13. Ayaz Guliyev
4. Mubashir Iqbal
5. Keisha Laraine Ingram
6. Arrifah Ratna Dewi
7. George-Teodor Moțica
8. Kyunghwan Yoon
9. Patrick-Eugen Moraru
10. Emre Kaplan

DISCUSSION
Entrepreneurs are born not made.
1.
2.
3.
4.

Pro and negative team-speakers must prepare speech of 5 minutes
Structure your argument - as if you were writing an essay, you need a
clear introduction, a middle and a conclusion.
Prepare questions for other team to answer (2-3)
Support your arguments with scientific research data, links to articles
of magazines, opinions of entrepreneurship thinkers

Time for research: 30 minutes, you can leave the classroom and discuss
your position in private

INNOVATION AND ENTREPRENEURSHIP

Why innovation is important when
studying entrepreneurship?

What is innovation?
variety of meanings
often associated with discoveries carried out by white-haired scientist-types
in high tech industry labs or universities or a small group within successful
company
much broader definition and wider functions

In 2002, listeners to the Today Programme on Radio 4 in a poll to mark
150 years of the UK Patent Office voted for their top ten inventions :
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Bicycle (Pierre Lallement, 1866)
Radio (Guglielmo Marconi, 1897)
Computer (Alan Turig, 1945)
Penicillin (Florey & Heatley, 1940)
Internal Combustion Engine (Nicolaus Otto, 1876)
World Wide Web (Tim Berners-Lee, 1989)
Light Bulb (Thomas Edison & Joseph Swan, 1829)
Cat’s Eyes (Percy Shaw, 1936)
Telephone (Alexander G. Bell, 1876)
Television (John Logie Baird, 1923)

KEY ELEMENTS
PROCESS: Innovation is a process (implying, among other things, that it can be
learned and managed)
INTENTIONAL: That process is carried out on purpose
CHANGE: It results in some kind of change
VALUE: The whole point of the change is to create value in our economy, society
and/or individual lives
OPPORTUNITY: Entrepreneurial individuals enable tomorrow's value creation by
exploring for it today: having ideas, turning ideas into marketable insights and
seeking ways to meet opportunities
ADVANTAGE: At the same time, they also create value by exploiting the
opportunities they have at hand

Using this conceptualization we are able to land on the following
definition of innovation:

A PROCESS OF INTENTIONAL CHANGE MADE TO
CREATE VALUE BY MEETING OPPORTUNITY AND
SEEKING ADVANTAGE.

INNOVATION VALUE CHAIN

very general sequence of activities that create value in our society and economy.

Key elements of innovation
KNOWLEDGE
CULTURE
PROCESS

The scientist or entrepreneur/innovator

http://www.youtube.com/watch?v=CYQ8FPqBa7k

Imagine that you were just hired to work for a very exciting company that recently received
a lot of press for its “groundbreaking” products and services. Your new boss, the VP of
Marketing, has made it her mission to instill a culture of innovation within one of the
company’s most successful businesses.
While reviewing the profiles of employees from across the company, she noticed that you
took a Entrepreneurship class in which you studied creativity, innovation and
entrepreneurship. She calls you into her office and asks you to lead a brainstorming session
with all of her employees.
The goal of the brainstorming session is to come up with practical definitions of the
following different but related concepts. She’s also interested in how they relate to each
other and whether you can come up with good examples of each:
1. What is creativity?
2. What is discovery?
3. What is invention?
4. What is innovation?

Can you help her out by finding reasonable definitions and examples of these?

THEORIES ON INNOVATION
1.
2.
3.
4.

Schumpeter – S-curves
Drucker – 7 sources of innovation
Kondratiev – waves of innovation
Rogers – diffusion of innovation

There is no dominant theory on the field and little agreement among managers
and academics alike regarding what affects a company’s ability to innovate.

(1) Kondratieff
innovation waves

K – WAVES
Attributes: change, entrance of radically new technology in leading economics
-> diffused unevenly around the globe, impact on power hierarchies, culture
and politics
In economics, Kondratiev waves (also called grand supercycles, surges, long
waves, or K-waves) are regular S-shaped cycles in the modern (Capitalist)
world economy.
Fifty to sixty years in length, the cycles consist of alternating periods between
high sectoral growth and periods of slower growth.

K-waves are not based on natural law that says innovation boom comes every
50 years, but only amplifies that there is a tendency of innovations to come
on line in clusters and it appears in lifecycles too.

Reading :
http://www.economist.com/node/186628

Most cycle theorists agree, however, with the
"Schumpeter-Freeman-Perez" paradigm of five waves so
far since the industrial revolution, and the sixth one to
come. These five cycles are”
–
–
–
–

The Industrial Revolution - 1771
The Age of Steam and Railways - 1829
The Age of Steel, Electricity and Heavy Engineering - 1875
The Age of Oil, the Automobile and Mass Production 1908
– The Age of Information and Telecommunications - 1971

According to this theory, we are currently at the turningpoint of the 5th Kondratiev.

Source: Feb 18th 1999 From The Economist print edition

• Schumpeter kept alive the Russian
Kondratiev's ideas on 50-year cycles, K-waves
• Schumpeter suggested a model in which the
four main cycles

Schumpeter
•
•
•

•
•
•

creative destruction
describes the way in which capitalist economic development arises out of the
destruction of some prior economic order
“the opening up of new markets, foreign or domestic, and the organizational
development [...] illustrate the same process of industrial mutation, that
incessantly revolutionizes the economic structure from within, incessantly
destroying the old one, incessantly creating a new one”.
“creative destruction” waves that restructure the whole market in favor of those
who grasp discontinuities faster
S-shaped rate of adoption
Schumpeter identified innovation as the critical dimension of economic change.[18]
He argued that economic change revolves around innovation, entrepreneurial
activities, and market power. He sought to prove that innovation-originated
market power could provide better results than the invisible hand and price
competition.

Examples
INTERNET has acted as a catalyst for creative
destruction. The internet has allowed businesses
to compete in markets outside of their
geographic location, reach more consumers,
create efficiencies and cut costs in manual
processes as well as pioneer new techniques for
doing business.

Kondratiev's ideas were not supported by the Soviet government. Subsequently he was sent
to the gulag and was executed in 1938. In 1939, Joseph Schumpeter suggested naming the
cycles "Kondratieff waves" in his honor.

What is entrepreneur for Schumpeter?
person willing and able to convert a new idea or
invention into a successful innovation
they employ "the gale of creative destruction" to replace
in whole or in part inferior innovations across markets
and industries, simultaneously creating new products
including new business models.

this way, creative destruction is largely responsible for the
dynamism of industries and long-run economic growth.

(3) Drucker
7 sources of innovation

Drucker extended Schumpeter’s definition of
entrepreneur’s as initiators of meta-events
For Drucker entrepreneurship is about taking
RISK. The behavior of the entrepreneur reflects
a kind of person willing to put his or her career
and financial security on the line and take risks
in the name of an idea, spending much time as
well as capital on an uncertain venture.

Drucker’s view that in turbulent times such as
recession, innovation is critical
In previous recessions, winners tend to be
innovators not cost reducers or downsizers

Entrepreneur systematically searches for
change, responds to it, and exploits opportunity
They look for opportunities!

ASSIGNMENT
7 sources for each student.
Reading + presenting of the material to the classmates
Duration: 30 min
1. What the source is all about?
2. Provide examples and case studies from the material
3. Why do you think this source is important?

SEVEN SOURCES FOR INNOVATIVE
OPPORTUNITY
“Systematic innovation consists in the purposeful and organised search for
changes and in the systematic analysis of the opportunities such changes
might offer for economic and social innovation”
Source
The unexpected

success (Apple), failure (Ford Edsel), outside event

Incongruities

between reality as it actually is and reality as it is assumed to be or as it
ought to be (overnight package delivery)

Process need

Source innovation based on process need (sugar free products, caffeine free
coffee, microwave owen)

Industry and market
structures

changes that catch everyone unawares (health care industry: changing to
home health care)

Demographics

changes in the population (retirement homes for older people)

Changes in perception

also changes in mood and meaning (exercise, health and green movement)

New knowledge

both scientific and non-scientific (video industry, robotics)

p95

By Drucker, P (1994) Innovation and Entrepreneurship, Elsevier and Drucker, P (2002) The Discipline of Innovation, Harvard Business Review, Aug
2002, Vol 80,

(4) Rogers
diffusion of innovation

Diffusion of innovations

HOW, WHY, AND AT WHAT RATE
new ideas and technology spread through
cultures?

http://www.youtube.com/watch?v=zU3fIEPfctQ

entrepreneurship, innovation, creativity

The diffusion of innovation curve is useful to
remember that trying to quickly and massively
convince mass of a new controversial idea is
useless.
It makes more sense in these circumstances to start
with convincing innovators and early adopters first.
All the categories and percentages can be used as a
first draft to estimate target groups for
communication process.

Why you need to know with what type of innovation
you are dealing with?
Understanding what type of innovation you are dealing with is of
critical strategic importance when it comes to you deciding how
you will react to an innovation, whether someone else has
introduced it or whether you plan to introduce it to the
marketplace.

TYPES OF INNOVATION (1)
4P’s of innovation

PRODUCT INNOVATION:
changes in the things (products or services) which an organization offers

PROCESS INNOVATION:
changes in the ways in which they are created an delivered

POSITION INNOVATION:
changes in the context in which the product or services are introduced, coffee
as premium product

PARADIGM INNOVATION:
changes in the underlying mental modes which frame what an organization
does, Ford cars
Source: Tidd, J., Bessant, J. and Pavitt, K. (2005), Managing Innovation – integrating technological, market and
organizational change, Wiley, 3rd edition

SOUTH WEST AIRLINES
Example: service innovation

– ‘no frills’
– low cost
– achieved by means of: a single aircraft type (then and now
the Boeing 737), smaller low cost airports, rapid
turnarounds (typically 15-20 minutes), high load factors
– diverted so me traffic away from existing carriers but more
significantly it generated a lot of new business, especially
leisure and business passengers who could be persuaded
to fly rather than drive. As Herb Kellner (Dogannis, 2001:
p128) put it:

‘we are not competing with airlines, we’re competing
with ground transportation’

TYPES OF INNOVATION (2)
Henderson & Clark

Source: Henderson and Clark (1990)

Incremental innovation
Incremental innovation refines and improves an existing design,
through improvements in the components. However it is
important to stress these are improvements not changes, the
components are not radically altered. Christensen (1997) defines
incremental innovation in terms of:

‘a change that builds on a firm’s expertise in component
technology within an established architecture.’
Most common type of innovation

Incremental innovation would be case of offering a machine with a more powerful
motor to give faster spin speeds. It leaves the architecture of the system unchanged
and instead involve refinements to particular components.

RADICAL INNOVATION
calls for a whole new design, ideally using new components configured (i.e.
integrated into the design) in a new way. In Henderson and Clark’s (1990) terms,

‘Radical innovation establishes a new dominant
design, and hence a new set of core design
concepts embodied in components that are linked
together in a new architecture.
comparatively rare
Radical innovation is often associated with the introduction of a new
technology. In some cases this will be a transforming technology, perhaps
even one associated with the transforming effect of a Kondratiev long wave.

MODULAR INNOVATION

• doesn’t involve a whole new design, but
involve new or at least significantly different
components.
• function remains the same

Clockwork radio

The same radio but does not use external source of energy
New technology but not as radical
Opened up new markets for people who do not have access to power source

smart walking stick with built-in sat-nav for
elderly by fujitsu
designed by egle ugintaite from
Lithuania, is a walking stick with
built-in sat-nav.
the next generation cane is designed
to help elderly people find their way,
as well as monitor things such as
heart rate and temperature.
its location can also be followed
online and can be set up to send
email alerts if it thinks the user may
have fallen over.

Source: http://www.designboom.com/design/smart-walking-stick-with-built-in-sat-nav-for-elderly-by-fujitsu/

Architectural
Reconfiguration of established system to link together
components in a new way
The function changes dramatically
There could be improved components, but they are not essential

http://www.ted.com/talks/lang/en/saul_griffith_on_ev
eryday_inventions.html

The innovation machine
http://www.economist.com/node/16888745
Where “more” creativity and innovation is happening in startup’s or in established companies?

innovation ≠ creativity
Creativity is about coming up with the big idea.
Innovation is about executing the idea —
converting the idea into a successful business.

Opportunity + successful implementation

EVERYTHING IS A REMIX
http://www.youtube.com/watch?v=coGpmA4saEk

Exploring creativity of the world where everything is a
remix
New media created from old meadia

As a group:
1. Define main problem
2. Discuss the problem using 6 thinking hats method

Director of Everything is a remix talks @ TED
http://www.ted.com/talks/kirby_ferguson_embr
ace_the_remix.html

Creativity and lead users

http://www.youtube.com/watch?list=ECF6C0319C607DEDC1&v=
PTKREnr2vLU&feature=player_detailpage#t=373s
Not doing something for money
Example of lead users importance in innovation and creativity
Shows importance of peers that is why entrepreneurs work in
hubs, valleys and teams

entrepreneurship, innovation, creativity

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