Lecture Note: Innovation Management & Entrepreneurship
Chapter 1: The Innovation Imperative
The distinctions between innovation, creativity, invention, and entrepreneurship:
Innovation: The implementation of new ideas, processes, products, or services to create value
or improve existing ones. Creativity: The ability to generate original ideas, insights, or
solutions that are novel and valuable. Invention: The creation of a completely new product,
process, or system that did not previously exist. Entrepreneurship: The process of identifying,
creating, and pursuing opportunities to bring innovations, inventions, or creative ideas to the
market.
In summary, innovation involves the practical application of new ideas to create value,
creativity is about generating original and valuable ideas, invention is the creation of
something entirely new, entrepreneurship is the process of turning ideas into viable and
successful business ventures.
Innovation matters
What is innovation?
Innovation simply means create something new. In a business context, innovation is create
something new and of value that generates profitable growth and improves competitive.
Innovation is the introduction of something new. Innovation is defined as exploiting new ideas
leading to the creation of a new product, process or service. It is actually bringing new idea to
market, putting into practice and exploiting it in a manner that leads to new products, services or
systems that add value or improve quality. It refers to the process that an individual or
organization undertakes to conceptualize brand new products, processes, and ideas, or to
approach existing products, processes, and ideas in new ways. Innovation means using new
technology and using new ways of thinking to add value to an existing idea or product and to
make substantial changes in society. Innovation is the process of translating ideas into useful
new products, processes or services
Today’s competitive landscape heavily relies on innovation. Innovation is an ongoing process,
constantly shaping and reshaping our lives. Business leaders must constantly look for new ways
to innovate because you can't solve many problems with old solutions. Innovation is a product,
service, business model, or strategy that's both novel and useful. Innovation has become an
imperative for society at large. Whether it is entrepreneurs starting new ventures, large
established corporations trying to defend their market position, or countries facing increased
Department of Management Page 1
, Lecture Note: Innovation Management & Entrepreneurship
global competition, everyone is attempting to innovate. What does this mean? It means they turn
new ideas into widely used practice. The reasons are clear: the benefits from innovation are
highly promising. Innovation is a main driver of economic progress and social well-being. It is
an imperative in the corporate world. Innovation is a key source of current and long-term
competitive advantage. An innovation could be a new process, business model or organizational
practice. The purpose of innovation is to come up with new ideas and technologies that
increase productivity and generate greater output and value with the same input. Whereas,
invention is coming up with a new idea.
Types of Innovation
Innovation in business can be grouped into two categories: sustaining and disruptive.
Sustaining innovation: it enhances an organization's processes and technologies to improve
its product line for an existing customer base. It's typically pursued by incumbent businesses
that want to stay atop their market.
Disruptive innovation: it occurs when smaller companies challenge larger businesses. It can
be classified into groups depending on the markets those businesses compete in. Low-end
disruption refers to companies entering and claiming a segment at the bottom of an existing
market, while new-market disruption denotes companies creating an additional market
segment to serve a customer base the existing market doesn't reach.
The Importance of Innovation
Unforeseen challenges are inevitable in business. Innovation can help to stay ahead of the curve
and grow the company in the process. Innovation is crucial for customers, shareholders,
businesses, and the future. Here are three reasons why innovation is crucial for business:
1. It allows adaptability: Innovation is often necessary for companies to adapt and overcome
the challenges of change.
2. It fosters growth: Achieving organizational and economic growth through innovation is key
to staying afloat in today’s highly competitive world.
3. It separates businesses from their competition: Innovation can distinguish business from
others.
Innovation does make a huge difference to organizations of all shapes and sizes. Innovation is
strongly associated with growth. Innovation has a substantial impact on organizations of all sizes.
Department of Management Page 2
, Lecture Note: Innovation Management & Entrepreneurship
New business is created by new ideas, by the process of creating competitive advantage in what a
firm can offer. 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 a
bright idea forward against the potential gains if they succeed in doing something different.
Where innovation makes a difference
Innovation is about:
Identifying or creating opportunities
New ways of serving existing markets
Growing new markets
Rethinking services
Meeting social needs
Improving operations- doing what we do but better
Innovation & Entrepreneurship
Innovation matters - but it doesn’t happen automatically. It is driven by entrepreneurship - a
mixture of vision, passion, energy, enthusiasm, insight, judgment and plain hard work which
enables good ideas to become reality. Entrepreneurship is the powerful mixture of energy, vision,
passion, commitment, judgment and risk taking which provides the motive power behind the
innovation process. The power behind changing products, processes and services comes from
individuals -whether acting alone or embedded within organizations - who make innovation
happen. Innovation is the specific tool of entrepreneurs, the means by which they exploit change
as an opportunity for a different business or service. It is capable of being presented as a
discipline, learned, and practiced.
Entrepreneurship plays out on different stages in practice. One is the start-up venture in which
the lone entrepreneur takes a calculated risk to bring something new into the world. But
entrepreneurship matters just as much to the established organization which needs to renew itself
in what it offers and how it creates and delivers that offering. Internal entrepreneurs - often
labelled as ‘intrapreneurs’ or working in ‘corporate entrepreneurship’ or ‘corporate venture’
departments - provide the drive, energy and vision to take risky new ideas forward within that
context.
The passion to change things may not be focused on creating commercial value but rather on
improving conditions or enabling change in the wider social sphere or in the direction of
Department of Management Page 3
, Lecture Note: Innovation Management & Entrepreneurship
environmental sustainability - a field which has become known as ‘social entrepreneurship’. This
idea of entrepreneurship driving innovation to create value - social and commercial - across the
lifecycle of organization.
Innovation: As a process which can be organized and managed, whether in a start-up
venture.
Entrepreneurship: As the motive power to drive this process through the efforts of
passionate individuals, engaged teams and focused networks
Creating value: As the purpose for innovation, whether expressed in financial terms,
employment or growth, sustainability or improvement of social welfare. Creating value is
implementing an idea which makes an economic or social difference.
Innovation Isn’t Easy!
Coming up with good ideas is what human beings are good & already fitted as standard
equipment in our brains! But taking those ideas forward is not quite so simple, and most new
ideas fail. It takes a particular mix of energy, insight, belief and determination to push against
these chances. New ventures often fail, but it is the ventures which are failures rather than the
people who launched them. Successful entrepreneurs recognize that failure is an intrinsic part
of the process. They learn from their mistakes, understanding where and when timing, market
conditions, technological uncertainties. Many SMEs fail because they do not see or recognize
the need for change. They are inward looking, too busy dealing with today’s crises to worry
about the horizon. Organizations need entrepreneurship at all stages in their lifecycle, from
start-up to long lived survival. The ability to recognize opportunities, pull resources together in
creative ways, implement good ideas and capture the value from them are core skills.
Managing Innovation & Entrepreneurship
The dictionary defines ‘innovation’ as ‘change’; it comes from Latin ‘in and novare’, meaning
‘to make something new’. A more useful definition would be ‘the successful exploitation of new
ideas’. Innovation does not necessarily imply the commercialization of only a major advance in
the technological state of the art (a radical innovation) but it includes also the utilization of
small-scale changes in technological know-how (an improvement or incremental innovation).
Whatever the nature of the change the key issue is how to bring it about (how to manage
innovation). Radical innovation is significantly different changes to products, services or
Department of Management Page 4
Chapter 1: The Innovation Imperative
The distinctions between innovation, creativity, invention, and entrepreneurship:
Innovation: The implementation of new ideas, processes, products, or services to create value
or improve existing ones. Creativity: The ability to generate original ideas, insights, or
solutions that are novel and valuable. Invention: The creation of a completely new product,
process, or system that did not previously exist. Entrepreneurship: The process of identifying,
creating, and pursuing opportunities to bring innovations, inventions, or creative ideas to the
market.
In summary, innovation involves the practical application of new ideas to create value,
creativity is about generating original and valuable ideas, invention is the creation of
something entirely new, entrepreneurship is the process of turning ideas into viable and
successful business ventures.
Innovation matters
What is innovation?
Innovation simply means create something new. In a business context, innovation is create
something new and of value that generates profitable growth and improves competitive.
Innovation is the introduction of something new. Innovation is defined as exploiting new ideas
leading to the creation of a new product, process or service. It is actually bringing new idea to
market, putting into practice and exploiting it in a manner that leads to new products, services or
systems that add value or improve quality. It refers to the process that an individual or
organization undertakes to conceptualize brand new products, processes, and ideas, or to
approach existing products, processes, and ideas in new ways. Innovation means using new
technology and using new ways of thinking to add value to an existing idea or product and to
make substantial changes in society. Innovation is the process of translating ideas into useful
new products, processes or services
Today’s competitive landscape heavily relies on innovation. Innovation is an ongoing process,
constantly shaping and reshaping our lives. Business leaders must constantly look for new ways
to innovate because you can't solve many problems with old solutions. Innovation is a product,
service, business model, or strategy that's both novel and useful. Innovation has become an
imperative for society at large. Whether it is entrepreneurs starting new ventures, large
established corporations trying to defend their market position, or countries facing increased
Department of Management Page 1
, Lecture Note: Innovation Management & Entrepreneurship
global competition, everyone is attempting to innovate. What does this mean? It means they turn
new ideas into widely used practice. The reasons are clear: the benefits from innovation are
highly promising. Innovation is a main driver of economic progress and social well-being. It is
an imperative in the corporate world. Innovation is a key source of current and long-term
competitive advantage. An innovation could be a new process, business model or organizational
practice. The purpose of innovation is to come up with new ideas and technologies that
increase productivity and generate greater output and value with the same input. Whereas,
invention is coming up with a new idea.
Types of Innovation
Innovation in business can be grouped into two categories: sustaining and disruptive.
Sustaining innovation: it enhances an organization's processes and technologies to improve
its product line for an existing customer base. It's typically pursued by incumbent businesses
that want to stay atop their market.
Disruptive innovation: it occurs when smaller companies challenge larger businesses. It can
be classified into groups depending on the markets those businesses compete in. Low-end
disruption refers to companies entering and claiming a segment at the bottom of an existing
market, while new-market disruption denotes companies creating an additional market
segment to serve a customer base the existing market doesn't reach.
The Importance of Innovation
Unforeseen challenges are inevitable in business. Innovation can help to stay ahead of the curve
and grow the company in the process. Innovation is crucial for customers, shareholders,
businesses, and the future. Here are three reasons why innovation is crucial for business:
1. It allows adaptability: Innovation is often necessary for companies to adapt and overcome
the challenges of change.
2. It fosters growth: Achieving organizational and economic growth through innovation is key
to staying afloat in today’s highly competitive world.
3. It separates businesses from their competition: Innovation can distinguish business from
others.
Innovation does make a huge difference to organizations of all shapes and sizes. Innovation is
strongly associated with growth. Innovation has a substantial impact on organizations of all sizes.
Department of Management Page 2
, Lecture Note: Innovation Management & Entrepreneurship
New business is created by new ideas, by the process of creating competitive advantage in what a
firm can offer. 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 a
bright idea forward against the potential gains if they succeed in doing something different.
Where innovation makes a difference
Innovation is about:
Identifying or creating opportunities
New ways of serving existing markets
Growing new markets
Rethinking services
Meeting social needs
Improving operations- doing what we do but better
Innovation & Entrepreneurship
Innovation matters - but it doesn’t happen automatically. It is driven by entrepreneurship - a
mixture of vision, passion, energy, enthusiasm, insight, judgment and plain hard work which
enables good ideas to become reality. Entrepreneurship is the powerful mixture of energy, vision,
passion, commitment, judgment and risk taking which provides the motive power behind the
innovation process. The power behind changing products, processes and services comes from
individuals -whether acting alone or embedded within organizations - who make innovation
happen. Innovation is the specific tool of entrepreneurs, the means by which they exploit change
as an opportunity for a different business or service. It is capable of being presented as a
discipline, learned, and practiced.
Entrepreneurship plays out on different stages in practice. One is the start-up venture in which
the lone entrepreneur takes a calculated risk to bring something new into the world. But
entrepreneurship matters just as much to the established organization which needs to renew itself
in what it offers and how it creates and delivers that offering. Internal entrepreneurs - often
labelled as ‘intrapreneurs’ or working in ‘corporate entrepreneurship’ or ‘corporate venture’
departments - provide the drive, energy and vision to take risky new ideas forward within that
context.
The passion to change things may not be focused on creating commercial value but rather on
improving conditions or enabling change in the wider social sphere or in the direction of
Department of Management Page 3
, Lecture Note: Innovation Management & Entrepreneurship
environmental sustainability - a field which has become known as ‘social entrepreneurship’. This
idea of entrepreneurship driving innovation to create value - social and commercial - across the
lifecycle of organization.
Innovation: As a process which can be organized and managed, whether in a start-up
venture.
Entrepreneurship: As the motive power to drive this process through the efforts of
passionate individuals, engaged teams and focused networks
Creating value: As the purpose for innovation, whether expressed in financial terms,
employment or growth, sustainability or improvement of social welfare. Creating value is
implementing an idea which makes an economic or social difference.
Innovation Isn’t Easy!
Coming up with good ideas is what human beings are good & already fitted as standard
equipment in our brains! But taking those ideas forward is not quite so simple, and most new
ideas fail. It takes a particular mix of energy, insight, belief and determination to push against
these chances. New ventures often fail, but it is the ventures which are failures rather than the
people who launched them. Successful entrepreneurs recognize that failure is an intrinsic part
of the process. They learn from their mistakes, understanding where and when timing, market
conditions, technological uncertainties. Many SMEs fail because they do not see or recognize
the need for change. They are inward looking, too busy dealing with today’s crises to worry
about the horizon. Organizations need entrepreneurship at all stages in their lifecycle, from
start-up to long lived survival. The ability to recognize opportunities, pull resources together in
creative ways, implement good ideas and capture the value from them are core skills.
Managing Innovation & Entrepreneurship
The dictionary defines ‘innovation’ as ‘change’; it comes from Latin ‘in and novare’, meaning
‘to make something new’. A more useful definition would be ‘the successful exploitation of new
ideas’. Innovation does not necessarily imply the commercialization of only a major advance in
the technological state of the art (a radical innovation) but it includes also the utilization of
small-scale changes in technological know-how (an improvement or incremental innovation).
Whatever the nature of the change the key issue is how to bring it about (how to manage
innovation). Radical innovation is significantly different changes to products, services or
Department of Management Page 4
