Entrepreneurship Development PDF

Department of Commerce Faculty of Management Studies and Commerce University of Jaffna Programme : Second year – Second Semester : Bachelor of commer...

Department of Commerce Faculty of Management Studies and Commerce University of Jaffna Programme : Second year – Second Semester : Bachelor of commerce degree Course Title : Entrepreneurship Development Course code : COMC 22062 Handout : 02 CREATIVITY AND INNOVATION Learning outcomes After studying this lesson, you will be able to:  differentiate the terms creativity and innovation  describe the factors that obstruct creativity  discuss the ways for improving creativity  explain the methods of innovation  describe the basic sources of innovation Specific Importance of Entrepreneurship Entrepreneurship is the ability of individuals to convert innovative ideas into tangible activities. Entrepreneurs create new ideas that evolve into innovations, which are essentially new goods and services produced for the market. Entrepreneurship is vital for economic development, job creation, and societal advancement. Entrepreneurs play a significant role in shaping industries by creating innovative solutions that meet market needs and improve people's lives. Creativity in Entrepreneurship Creativity is crucial for entrepreneurs, enabling them to develop novel solutions to modern problems. In a competitive world, creativity isn't just a source of competitive advantage but a survival tool.  Creativity as a Necessity: Entrepreneurs must not only think creatively but must also move beyond conventional solutions that have worked in the past. Creativity helps in 1  finding innovative ways to address challenges and brings fresh perspectives into problem-solving.  Definition of Creativity: Creativity is the ability to generate new ideas and explore new ways of solving problems using the available opportunities. Factors That Obstruct Creativity Several barriers can stifle creativity. Overcoming these obstacles is key to fostering innovation: 1. Relying firmly on beliefs and attitudes: Rigid adherence to fixed beliefs can hinder creative thinking. For example, believing women can't perform certain tasks restricts opportunities for creative input. 2. Thinking there is only one solution: Creativity thrives when multiple solutions are considered for a given problem. Thinking there's only one way to solve an issue limits the scope of creativity. A small Sri Lankan hotel always uses the same menu, not considering adding new dishes to attract more customers 3. Anticipating instant results: Creativity is often a long-term process. Instant results are unrealistic. For example, the journey to the moon was a result of many years of research and failure. 4. Not acting on a logical basis: Creativity thrives on logic. In the past, people believed that banking transactions could only happen in person, but today digital banking has revolutionized the industry. 5. Thinking certain things are impractical: Disregarding new ideas because they seem impractical can stifle innovation. For example, airplanes were once thought impossible, but they are now a reality. 6. Following rules and traditions ignorantly: Blindly following societal norms without questioning them can alternatives restricts flexibility in lifestyles. 7. Fear of mistakes and criticism: Fear of failure can prevent creative breakthroughs. Entrepreneurs like Thomas Edison faced countless failures, but their ability to learn from mistakes led to groundbreaking inventions. Improving Creativity Creativity can be enhanced through several methods: 1. Absorbing diversity: Exposure to different perspectives, ideas, and environments fosters creative thinking. 2. Accepting failures: Embracing failure as a learning experience is vital. Failures often provide the necessary lessons for innovation. 3. Encouraging curiosity: Curiosity is the driving force behind new discoveries. Entrepreneurs should nurture their curiosity to drive innovation. 4. Perceiving issues as challenges: Viewing problems as opportunities rather than obstacles encourages creative solutions. 5. Creative training opportunities: Formal and informal education can significantly enhance one's creative abilities. 6. Appreciation of creativity: Financial incentives, recognition, and rewards encourage creative endeavors. 7. Creative behaviors as a model: Observing and emulating successful entrepreneurs' creative behaviors can inspire others to innovate. 2 Innovation in Entrepreneurship Innovation is about doing new things or redoing things in new ways. It is essential to entrepreneurship, as it enables the creation of new products, services, processes, and markets.  Definition of Innovation: Innovation refers to the introduction of new methods, products, services, or business models that improve or replace existing ones. It includes inventing new technologies, discovering better organizational forms, and creating new industries. Methods of Innovation 1. A New Invention: Creating something that didn’t exist before, such as the telephone, electric bulb, or digital camera. 2. Extension of a Core Product: Enhancing existing products by adding new functionalities or uses, such as electric trains or smartphone apps. 3. Duplicating: Introducing a product that is similar to existing ones but with improvements or adaptations, such as mobile ice cream vending or bakery item distribution. 4. Combination: Combining existing concepts or resources to create a novel product or service, such as LED-lit Vesak pandals or rice flour-based bakery items. Basic Sources of Innovation Innovation is often driven by various forces in society, including unexpected events, market changes, and evolving technologies. 1. Unexpected Events: Unplanned discoveries can lead to innovations, such as penicillin or the gramophone. 2. Process Requirements: Innovations often arise when existing processes are adapted to meet emerging needs, such as assembly line production or bakery production using electric equipment due to fuel shortages. 3. Changes in the Market: Changes in consumer behavior, technology, or income can drive innovation. For example, e-banking and sugar-free food emerged due to changes in consumer preferences. 4. Changes in Demography and Lifestyle: Shifts in age, job types, and education levels lead to innovations like day-care centers, elder homes, and online degree programs. 5. Change of Perception or Understanding: New interpretations of concepts can result in innovation, as seen in the health care and beauty culture industries. 6. Concepts Based on Knowledge: Innovations often arise from research and testing. Examples include mobile phones with advanced features, computer hardware, and robotics. 3