BS2402 Innovation & Entrepreneurship Module Teaching Objectives · To introduce students to the concept of innovation · To explain why it is important for all types of firm or organisation and country economies · To learn how to innovate and the role of ‘entrepreneurial management’ in this context 1
Module Teaching Objectives. To introduce students to the concept of innovation To explain why it is important for all types of firm or organisation and country economies To learn how to innovate and the role of ‘entrepreneurial management’ in this context. Module Learning Outcomes. - PowerPoint PPT Presentation
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
BS2402 Innovation & Entrepreneurship
Module Teaching Objectives
· To introduce students to the concept of innovation· To explain why it is important for all types of firm or
organisation and country economies· To learn how to innovate and the role of
‘entrepreneurial management’ in this context
1
BS2402 Innovation & Entrepreneurship
Module Learning Outcomes
· Understand what is meant by innovation· Understand what is meant by entrepreneurship · Assess why innovation and entrepreneurial
management are important for wealth and value creation
· Evaluate the potential importance of innovation and entrepreneurial management in your own organisation by using what you have learnt
Sat 8th Sept Entrepreneurial/ innovation mgt processContext for Innovation. Factors supporting/ hindering. Managing the processOvercoming barriers
Units 4,5,6
Behaviours that impede or facilitate entrepreneurial management .Critical factors/barriers?Making the innovation happen
4
BS2402 Innovation & Entrepreneurship
“There’s nothing quite like doing it…”
Entrepreneur
Teaching innovation and entrepreneurship...
Tension“This is how it should be done…”
University
BS2402 Innovation & Entrepreneurship
Unit1: Introduction to Innovation & Entrepreneurship Unit Learning Outcomes
· Understand broadly what is meant by innovation· Understand broadly what is meant by entrepreneurship · Understand broadly why innovation and entrepreneurial
management are important for the creation of social and financial value
· Introduction to a basic organisational process model· Recognise the potential importance of innovation and
entrepreneurial management in your own organisation
6
BS2402 Innovation & Entrepreneurship
What is innovation?
What is your understanding of the term?
Brief class discussion
7
BS2402 Innovation & Entrepreneurship What is innovation? Participants in
the EC Lisbon Council's 2010 Innovation Summit
Listen to this video clip: What is innovation? http://www.youtube.com/watch?v=2NK0WR2GtFs Afterwards –
1) Write down as many of the innovation descriptions as you can!
2) Just who are these people? Where do they come from
Evolutionary “Creative Destruction” Joseph Schumpeter“This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in….”
• introducing new commodities or qualitatively better versions of existing ones;
• finding new markets; • new methods of production and
distribution; • new sources of production for existing
commodities; • introducing new forms of economic
organisations” (Schumpeter, 1942)
Schumpeter's Innovation Definition:
BS2402 Innovation & Entrepreneurship
• Innovation is the process by which new ideas are successfully exploited to create economic, social and environmental value.BIS (2011) http://www.bis.gov.uk/innovation
• ‘innovation is the process of successfully bringing something new into use, to a market or community, that satisfies need or latent demand’ (Gurling, 2010, Unit 1)
• ‘A process starting with an invention or an idea, proceeds with the development of the invention/idea and results in the introduction of a new product, process or service to the market place” (Acs and Audretch, 1998)
• Companies achieve competitive advantage through acts of innovation. They approach innovation in its broadest sense, including both new technologies & new ways of doing things’ (Michael Porter 2009)
• At most simple level “Something new of value to the world, made to happen!”
“Design” links creativity and innovation Shapes ideas to become practical and attractive
propositions for users or customers Design may be described as creativity to point to a
specific end (Cox review on Creativity in Business: building on the UK’s strength 2005)Design
ApplicationPrototyping
Piloting
Idea/Invention Innovation
BS2402 Innovation & Entrepreneurship
Innovations can be classified (or categorised) in many different ways
All to help think about what you can do to achieve successful innovation
So.....here are some categorisations ..
BS2402 Innovation & Entrepreneurship
Dimensions of innovations space
Transformational
Radical
Incremental
Product Service ProcessPerc
eive
d ex
tent
of c
hang
e
What is changed(Tidd, Bessant and Pavitt)
BS2402 Innovation & Entrepreneurship
Tidd,Bessant & Pavitt’s: Definition of Innovation Incremental Innovation – small improvements to
existing products, services or processes- “do what we do but better”
Radical Innovation – Significantly different changes to products, services or processes - “ do what we do differently”
Transformational Innovation – Offering something that provides the platform on which other variations and generations can be built. (e.g. The wheel, printing press, internet – one thing, wide impact)
BS2402 Innovation & Entrepreneurship
Tidd,Bessant & Pavitt’s: Definition of Innovation Product innovation – change in the things that
(products/services) which an organisation offers
Process innovation - changes in the ways in which they are created and delivered
Position innovation-changes in the context in which the product for services are introduced ( Market)
Paradigm innovation which frame what the organisation does ( Strategic / Domain Transformation)
BS2402 Innovation & Entrepreneurship
Finnegan's Fish Bar: Video clip applying Bessant & Tidd’s innovation model to a Fish & Chip shop
Innovation: the OECD Definition - 4 types of innovation identified in the Oslo Manual for measuring innovation:
Product Innovation: a good or service that is new or significantly improved. Process innovation: involves a new or significantly improved production or delivery methodMarketing Innovation: Marketing innovation involves a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing.Organisational Innovation : Organisational innovation involves introducing a new organisational method in the firm’s business practices, workplace organisation or external relations. These innovations can be new to the firm/educational institution, new to the market/sector or new to the world 26
BS2402 Innovation & Entrepreneurship
Plus...... Service Innovation A new or significantly improved service concept
put into practice. e.g. can be a new customer interaction channel, distribution system or a technological concept or a combination of them.
Service innovation always includes replicable elements that can be identified & systematically reproduced in other environments.
Service innovation benefits both the service producer and customers
Competitive edge for the service provider can be based based on some technology or systematic method.
27
BS2402 Innovation & Entrepreneurship
Technical / technological innovation
…a mix of physical appliances and human ways of doing things involving:
1. Creating new knowledge
2. Generating technical ideas aimed at new and enhanced products, manufacturing processes and services
3. Developing those ideas into working prototypes; and
4. Transferring them into manufacturing, distribution and use
Sources: Scarborough and Corbin (1992); Roberts, E.B. (1988)
28
BS2402 Innovation & Entrepreneurship
Social Innovation – Mulgan and Albury 2003
• “New ideas that meet unmet needs, social innovations – are all around us.
• Include Fair trade and restorative justice, hospices and kindergartens, distance learning and traffic calming.
• Over last two centuries, innumerable social innovations, from cognitive behavioural therapy for prisoners to Wikipedia, have moved from margins to the mainstream.
• As this has happened, many have passed through the three stages identified by Schopenhauer for any new ‘truth’:
‘First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident” “
29
BS2402 Innovation & Entrepreneurship
Watch and listen: Skoll Foundation Video
An example of a social entrepreneurship starting with - Mohammed Yunus
Individuals in independent new ventures – new venture entrepreneurship
Working inside organisations – intrapreneurs as individuals or teams
Organisational level – corporate entrepreneurship - many different types depending on the organisation characteristics and what needs to be done
BS2402 Innovation & Entrepreneurship
32
“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, capable of being
learned, capable of being practiced.”
32
Peter Drucker on the relationship between Innovation & Entrepreneurship
Drucker 1991 HBR The Discipline of Innovation
BS2402 Innovation & Entrepreneurship
33
Innovation & Entrepreneurship
Different sides of the same coin!
InnovationEntrepreneurship
BS2402 Innovation & Entrepreneurship
34
So what is it entrepreneurs do?
Class Discussion...
BS2402 Innovation & Entrepreneurship
35
Definition of Entrepreneurship: Individual ‘A Human Creative Act that builds something of value from practically nothing.
It is the pursuit of opportunity regardless of resources….to hand.
It requires vision, passion and the commitment to lead others in the pursuit of that vision.
It also takes a willingness to take calculated risks’
Source: Timmons New Venture Creation 3rd Edition
BS2402 Innovation & Entrepreneurship
36
‘Entrepreneurship is process by which individuals - either on their own or inside organisations - pursue opportunities without regard to the resources they currently control’
Stevenson, Roberts and Grousebeck 89
Individual or Corporate entrepreneurship
BS2402 Innovation & Entrepreneurship
37
Stevenson and Gumpert 1990“the process of discovering innovative opportunities, evaluating them and managing the innovation process to bring the innovation successfully into use”
Sharma and Chrisman 1999“ a process whereby an individual or a group of individuals in association with an established company, creates a new organisation or instigates renewal or innovation within the current organisation”
Corporate Entrepreneurship Definitions
BS2402 Innovation & Entrepreneurship
38
A pattern of management behaviour that produces innovation (individual, group or firm level)
• Perceives and Identifies innovative opportunities
• Takes ‘Risk’ in pursuing this opportunity
• Finds and Gathers scarce resources into appropriate combinations to create an organisation, which delivers innovation and value to customer, founder, investor and stakeholder
• Continually ‘reaches’ for the necessary resources to solve problems and foster firm growth (Baumol)
Entrepreneurship:
BS2402 Innovation & Entrepreneurship
39
Fitting the entrepreneurial management process onto innovation using Robert’s innovation model
Successful Exploitation and Implementation
INNOVATION =+
INPUTSGroup memberKnowledge, skills, effort
Entrepreneurial/ Innovation
Management Process
OUTPUTS adding or creating value
39
BS2402 Innovation & Entrepreneurship
Unit 2: Role of Innovation & Entrepreneurship in the Economy
BS2402 Innovation & Entrepreneurship
Why is entrepreneurship & Innovation so important?
Class Discussion
• National Level
• Organisation Level
• Individual Level
41
BS2402 Innovation & Entrepreneurship
National Level - The impact of entrepreneurship / new firm starts / innovation on economic performance• Number of new enterprises linked to overall GDP
performance ( Link of TEA / global entrepreneurship monitor to economic performance / OECD Audretsch & Thurik
• I.e. positive effect of start-ups on economic growth.
In Developed Economies
1. Industry structure is generally shifting towards an increased role for small enterprises.
2. Extent and timing of this shift not identical across countries.
3. Shift in industry structures towards a greater role for SMEs heterogeneous / shaped by country-specific factors. 42
BS2402 Innovation & Entrepreneurship
UK “Innovation Nation” White Paper Mar. 2008
“Innovation is essential to the UK’s future economic prosperity and quality of life. To raise productivity, meet the challenges of globalisation and to live within our environmental and demographic limits, the UK must excel at all types of innovation.”
UK Coalition Government 2011
Innovation is the process by which new ideas are successfully exploited to create economic, social and environmental value. http://www.bis.gov.uk/innovation 2011 43
Why innovate? EU Commission considers http://ec.europa.eu/enterprise/sme/innovation_en.htm#
“Innovation is now widely understood to be the driving force in economic growth. ( Addition CG- in a free market economy)It is new products and services, and new methods for making or delivering them which add value to our economy, and enable us to improve standards of living. SMEs are responsible for much of the innovation which leads to new higher value products and services (even if ultimately larger firms may take on production and mass marketing of such innovations), and so the European Commission seeks to promote innovation to SME’s and all organisations across Europe”
• Entrepreneurship & firm creation long been recognised as a vital force driving innovation.
• With globalization & co-incident shift towards a knowledge-based economy, link between entrepreneurship policy & innovation received renewed attention.
• By underpinning firm creation & firm expansion, entrepreneurship policies strengthen innovation, increasing productivity in the enterprise sector.
• In return, policies fostering innovation will tend to spur firm creation as the results of R&D are commercialized.
OECD Fostering Entrepreneurship
BS2402 Innovation & Entrepreneurship
Individual level: The Organisation for Economic Co-Operation and Development Towards an Enterprising Culture. (OECD (1989) - • "An enterprising individual has a positive, flexible & adaptive
disposition to change, seeing it as normal and as an opportunity rather than a problem.
• To see change in this way, an enterprising individual has a security born of self-confidence, & is at ease when dealing with insecurity, risks & the unknown.
• An enterprising individual has the capacity to initiate creative ideas & develop them into action in a determined manner.
• An enterprising individual is able, even anxious to take responsibility, is an effective communicator, negotiator, influencer, planner & organiser. An enterprising individual is active, confident and purposeful — not uncertain & dependent“
46
BS2402 Innovation & Entrepreneurship
1. Economic renewal / rejuvenation within the business environment (see J. Schumpeter, 1934) and enterprise
2. Response to accelerating pace of technological change, shorter life cycles, globalisation of markets (Krondatiev Waves) (Tidd, Bessant & Pavitt)
4. Socio - political cohesion improvement in communities as a means of furthering economic development through the third sector (Mort, Weerawardena & Carnegie 2003)
3. Value Creation and Competitive Advantage for those able to mobilize knowledge , technological skills and experience to create new products processes and services (Barney 91)
Reasons for intense focus on Innovation
47
BS2402 Innovation & Entrepreneurship
48
Recognise opportunity Find Resources
Develop Venture by picking and deploying resources
Create ValueEntrepreneurial Goals and Innovation Context
Strategic Vision and direction
Learning
CG Adapted Innovation and E’ship Management Model: Bessant and Tidd 2nd Ed 2011
BS2402 Innovation & Entrepreneurship
Dyson Case Study: see electronic manual p 8 Unit 1
A pattern of management behaviour that produces innovation (individual, group or firm level)• Perceives and Identifies innovative opportunities• Takes ‘Risk’ in pursuing this opportunity (link to self-confidence)
• Finds and Gathers scarce resources into appropriate combinations to produce an organisation to deliver that innovation(s)
• Continually ‘reaches’ for the necessary resources to solve problems and foster firm growth (Baumol)
Management approach
• Decision-making based on bias and heuristics; networking; opportunism
BS2402 Innovation & Entrepreneurship
Sharon Wright - Magnamol• Where did Sharon get the idea?• Which roles is Sharon currently fulfilling and what
does she want from the Dragon/ Dragon to fund?• What risks has/ is she taking? (you may have to infer).
What do you think spurred her on to take the risks?• What resources is Sharon using currently?• What characteristics does Sharon have that have
helped her succeed, and so impressed the Dragons?
BS2402 Innovation & Entrepreneurship
70
Recognise opportunity Find Resources
Develop Venture by picking and deploying resources
Create ValueEntrepreneurial Goals and Innovation Context
Strategic Vision and direction
Learning
CG Adapted Innovation and E’ship Management Model: Bessant and Tidd 2nd Ed 2011