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Questions and Answers

What does innovation mean?

The use of imagination or original ideas to create something.

What is the innovation imperative?

The need to innovate or change is becoming more pressing and urgent.

What is the main driver of innovation?

Entrepreneurship.

Why is it so hard for firms to manage innovation?

Because most firms fail to recognize the need to learn and their past experiences. Signup and view all the answers

The first-mover advantage is always a better strategy.

False Signup and view all the answers

Incremental innovation is more valuable than radical innovation.

False Signup and view all the answers

What is ‘social entrepreneurship’?

Entrepreneurs seeking to create social value rather than profit. Signup and view all the answers

What are the primary drivers of globalization for firms?

Technological innovation, global value chains, international trade and the ability to identify and exploit external sources of innovation. Signup and view all the answers

What are the key factors affecting a firm’s ability to capture value from innovation?

The national system of innovation where the firm is embedded, its power and market position in the international value chain, its capabilities in research, design, development, production, marketing and distribution, and its ability to identify and exploit external sources of innovation. Signup and view all the answers

What is a significant challenge for innovation in emerging economies?

They tend to focus on incremental innovation. Signup and view all the answers

What is “frugal innovation”?

Innovation which is designed to serve the needs of the ‘bottom of the pyramid’ – the majority of the world’s population. Signup and view all the answers

What are the key elements of a successful innovation strategy?

It must incorporate a clear sense of vision, a sense of understanding the customer, a process for innovation, an awareness of the market, and the ability to adapt and change. Signup and view all the answers

What are the essential ingredients of a successful innovation strategy?

A clear strategic vision, the commitment of resources and a supportive organizational culture in which creativity, innovation and collaboration are encouraged and supported. Signup and view all the answers

What is ‘absorptive capacity’ and why is it so important?

The ability to recognize the value of new knowledge, assimilate it and apply it. Signup and view all the answers

What are the key elements of good ‘knowledge management” in an organization?

Identifying, codifying, storing, retrieving, making use of all types of knowledge. Signup and view all the answers

What is a community of practice?

A group of people who share a common task or process. Signup and view all the answers

How does the ‘open innovation’ approach differ from traditional approaches?

Open innovation is about building rich and extensive linkages with potential sources of innovation. Signup and view all the answers

Where is 'collective innovation' being most widely adopted?

At the ‘bottom of the pyramid’ and in fast growing, emerging markets. Signup and view all the answers

Most entrepreneurial ventures fail to grow successfully.

True Signup and view all the answers

Study Notes

Part I: Entrepreneurial Goals and Context

National, regional, and sectoral contexts significantly influence the rate and direction of innovation and entrepreneurship through resource availability, talent, opportunities, infrastructure, and support. However, context does not determine outcomes. Individual factors - education, training, experience, and aptitude - also greatly impact goals and outcomes in innovation and entrepreneurship.

Part II: Recognizing the Opportunity

Innovative ideas can arise from a wide range of sources, such as inspiration, customer needs, frontier research, and combining existing ideas.
Innovation is not just a flash of inspiration; it's a process with several phases.
Recognizing an opportunity involves identifying a need, exploring different possibilities, and potentially altering established ideas in new contexts.
Understanding which opportunities to pursue depends on how well they fit the organization's overall strategic direction.

Part III: Finding the Resources

Developing a robust business plan is crucial to securing the necessary resources for an innovation project.
Forecasting future needs and demands in markets and technologies is critical for planning,
Factors influencing success in a new venture include strong leadership, experience, clear goals, and access to resources.
Appropriate choices of financing sources depend on the specific venture and its stage of development
Identifying, evaluating, and adapting to external sources of risk and uncertainty are crucial parts of the overall process.

Part IV: Developing the Venture

Developing new products or services is a structured process with phases like idea generation, assessment, development, test marketing, and commercialization.
Product and organizational factors affect the success or failure of innovation.
Applying lessons from diffusion research helps predict adoption rates and inform strategies for bringing a new product or service to market.
Choosing the appropriate organizational structure (e.g., internal venture teams, separate divisions, spin-offs) can impact a new venture's success.

Part V: Creating Value

Creating value from an innovation involves more than simply developing a new product or service.
Business models are frameworks for making explicit how value is created, captured, and shared between customers, suppliers, and the organization.
Understanding and analyzing the various inputs to a business model is critical to ensuring its viability and success, encompassing elements like value proposition, target market, supplier relationships, and cost structures.
Maintaining a focus on sustainability throughout the innovation process can create new opportunities and enhance value over the long run.

Chapter 15: Exploiting Knowledge and Intellectual Property

Knowledge management involves systematically gathering, storing, sharing, and using knowledge within an organization,
Different types of knowledge exist (explicit and tacit), and methods for codifying information and expertise should be employed.
Managing intellectual property – including patents and copyrights – is essential for protecting innovations and enabling the return on R&D investments.
Patent strategies for licensing and commercialization can affect companies' access to new markets, technologies, and funding.

Chapter 16: Business Models and Capturing Value

Business models describe how value is created, used by businesses, and captured across diverse sectors.
Models describe the value proposition, the target market, the key activities to create value, the key resources needed to make it happen, and the channels to reach those who will value the product or service – along with how the revenue is structured and captured.
Business Model innovation extends to considering where and how to generate revenue streams, and includes changing existing business models or creating completely new ones.

Chapter 17: Learning to Manage Innovation and Entrepreneurship

Managing innovation requires a structured understanding of processes, tools, and techniques, and specifically identifying what works well and what doesn't,
Learning occurs by reflection, experimentation, and taking advantage of the experiences of others.
Key factors which help guide the process include clear strategy, vision, leadership qualities, and suitable organizational structure.