Creativity and innovation in entrepreneurship.pptx

Creativity and innovation in entrepreneurship Entrepreneurial creativity Creativity Creativity is defined as the tendency to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others. Cr...

Creativity and innovation in entrepreneurship Entrepreneurial creativity Creativity Creativity is defined as the tendency to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others. Creativity is the ability to come up with new ideas and to identify new and different ways of looking at a problem and opportunities. A process of assembling ideas by recombining elements already known but wrongly assumed to be unrelated to each other. This definition has several key elements that are worth considering: Process: Creativity is also a process (implying, among other things, that it is more like a skill than an attitude, and that you can get better at it with practice). Ideas: Creativity results in ideas that have potential value. Recombining: The creative process is one of putting things together in unexpected ways. Three reasons why people are motivated to be creative 1. Need for novel, varied, and complex stimulation. 2. Need to communicate ideas and values. 3. Need to solve problems. In order to be creative, you need to be able to view things in new ways or from a different perspective. Among other things, you need to be able to generate new possibilities or new alternatives. Tests of creativity measure not only the number of alternatives that people can generate but the uniqueness of those alternatives. the ability to generate alternatives or to see things uniquely does not occur by change; it is linked to other, more fundamental qualities of thinking, such as flexibility, tolerance of ambiguity or unpredictability, and the enjoyment of things heretofore unknown. Thus, creativity is the development of ideas about products, practices, services, or procedures that are novel and potentially useful to the organization. The creative process Steps in the creative process 1. Opportunity or Problem Recognition: A person discovers that a new opportunity exists or a problem needs resolution. 2. Immersion: The individual concentrates on the problem and becomes immersed in it. He or she will recall and collect information that seems relevant, dreaming up alternatives without refining or evaluating them. 3. Incubation: The person keeps the assembled information in mind for: a while. He or she does not appear to be working on the problem actively; however, the subconscious mind is still engaged. While the information is simmering it is being arranged into meaningful new patterns. 4. Insight: The problem-conquering solution flashes into the person's mind at an unexpected time, such as on the verge of sleep, during a shower, or while running. Insight is also called the Aha! Or Eureka! Experience. 5. Verification and Application: The individual sets out to prove that the creative solution has merit. Verification procedures include gathering supporting evidence, using logical persuasion, and experimenting with new ideas. Personality traits of creative people 1. Persistence 2. Self-confidence 3. Independence 4. Attraction to complexity 5. Tolerance of ambiguity 6. Intuitiveness 7. Have broad interests 8. Are energetic 9. Drive to achieve 10. Love their work 11. Take risks Barriers to creativity 1. Excessive focus on extrinsic motivation 2. Limits set by superiors 3. Critical evaluation 4. Close, controlling supervision 5. Competition in a win-lose situation 6. Control of decision making 7. Control of information 8. Blindly following the rules 9. Constantly being practical 10. Becoming overly specialized 11. Fearing looking foolish 12. Fearing mistakes and failure Innovation Innovation is the implementation of new ideas at the individual, group or organizational level. A process of intentional change made to create value by meeting opportunity and seeking advantage. 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. Types of innovations There are four distinct types of innovation, these are as follows: 1. Invention - Described as the creation of a new product, service or process. Something that has not been tried before. 2. Extension - The expansion of an existing product, service or process. This would mean that the entrepreneur takes an existing idea and applies it differently. 3. Duplication - Copying (replicating) an existing product or service and then adding the entrepreneurs own creative touch. In order to improve it. 4. Synthesis - A combination of more than one existing products or services in to a new product. or service. This means that several different ideas are combined in to one new product or service. The innovation process 1. Analytical planning – Carefully identifying the product or service features, design as well as the resources that will be needed. 2. Resource organization – Obtaining the required resources, materials, technology, human or capital resources. 3. Implementation – Applying the resources in order to accomplish the plans 4. Commercial application – The provision of value to customers, reward employees, and satisfy the stake holders. 5 Myths of innovation 1. Innovation is planned and predictable. 2. Technical specifications should be thoroughly prepared in advance. 3. Creativity relies on dreams and blue-sky ideas. 4. Big projects will develop better innovations than smaller ones. 5. Technology is the driving force of innovation and success. Entrepreneurship 1. Derived from French word Entreprendre which means „to undertake‟. 2. Richard Cantillon: Entrepreneurs are non-fixed income earners who pay known costs of production but earn uncertain incomes. 3. Jean-Baptiste Say: An entrepreneur is an economic agent who unites all means of production- land of one, the labour of another and the capital of yet another and thus produces a product. By selling the product in the market he pays rent of land, wages to labour, interest on capital and what remains is his profit. He shifts economic resources out of an area of lower and into an area of higher productivity and greater yield. 4. David McClelland: An entrepreneur is a person with a high need for achievement [N- Ach]. He is energetic and a moderate risk taker. 5. Peter Drucker: An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource. 6. Ronald May: An Entrepreneur is someone who commercializes his or her innovation. Entrepreneurship cont… 7. Schumpeter: Entrepreneurs are innovators who use a process of shattering the status quo of the existing products and services, to set up new products, new. They employs "the gale of creative destruction" to replace in whole or in part inferior offerings across markets and industries, simultaneously creating new products and new business models. Thus, creative destruction is largely responsible for the dynamism of industry and long-term economic growth. 8. Frank H. Knight: 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. Knight classified three types of uncertainty. Risk, which is measurable statistically (such as the probability of drawing a red color ball from a jar containing 5 red balls and 5 white balls). Ambiguity, which is hard to measure statistically (such as the probability of drawing a red ball from a jar containing 5 red balls but with an unknown number of white balls). True Uncertainty, which is impossible to estimate or predict statistically (such as the probability of drawing a red ball from a jar whose number of red balls is unknown as well as the number of other colored balls. Creativity, innovation and entrepreneurs Creativity is thinking new things, and innovation is doing new things. Creativity is the ability to develop new ideas and to discover new ways of looking at problems and opportunities. Innovation is the ability to apply creative solutions to those problems and opportunities in order to enhance people‟s lives or to enrich society. Entrepreneurship = creativity + innovation From creativity to entrepreneurship Creativity, innovation and entrepreneurs Creativity is the ability to develop new ideas and to discover new ways of looking at problems and opportunities. Innovation is the ability to apply creative solutions to those problems and opportunities in order to enhance people‟s lives or to enrich society. Entrepreneurship is the result of a disciplined, systematic process of applying creativity and innovation to needs and opportunities in the marketplace. Entrepreneurs are those who marry their creative ideas with the purposeful action and structure of a business. Researchers believe that entrepreneurs succeed by thinking and doing new things or old things in new ways.