Creativity, Innovation and Entrepreneurship


Topic highlights

 (What will I learn in this topic?)
  • How to define and distinguish between the terms discovery, invention, innovation, and creativity
  • How to provide, recognize and classify examples of each of the above
  • Why they are important to all fields of study, i.e. whatever your discipline might be from the sciences, to engineering, to technology, to nursing, to journalism, to business, to communications, to any other
  • What is meant by the term entrepreneurship
  • The basics of the new venture life cycle
  • What is a venture and what types of ventures we will consider in this course
  • Reasons why creativity and innovation are critical to the work of the entrepreneurial individual in any field
  (What kind of knowledge will I gain?)


  • As shown above this topic deals primarily with declarative knowledge, meaning that you are learning about discovery, invention, innovation and entrepreneurship
  • We're building a foundation here for later topics in which you will build the corresponding skills (procedural knowledge), learn the circumstances for using them (conditional), and put it all to work (functioning) in an experiential fashion

Introduction and motivation

(Why learn it?)

On one hand, the terms discovery, invention, innovation and creativity are often misused in the media and even in our own day-to-day conversations. On the other hand, it's becoming widely accepted that they are among the most important ingredients for successful entrepreneurial activity, the future competitive advantage of a new venture, and the sustainable growth of individuals, businesses and even nations.

Many courses on entrepreneurship teach students how to create value by exploiting their firm's existing competitive advantages, i.e. they teach elements of strategy. This topic sets the stage for a series of subsequent topics in which you will also learn the skills required to explore for tomorrow's value (whatever your entrepreneurial initiative or venture might be) through an understanding of the concepts of innovation and creativity.

Countless authors have written articles on these subjects in the news, on the web, and in journals, so there's a lot to sink our teeth into. We'll get to those later though. In the meantime, this topic is designed with three simple goals in mind:

  1. Challenging our own understanding of these concepts
  2. Providing a common vocabulary so we can have a conversation about their role in the work of creative and entrepreneurial individuals
  3. Starting to think about why they matter

Learning activities

(How will I gain the levels of understanding?)

 Type  Name
 Direction
Activity before class
  • Come to class with two examples of innovations that made an impression on you
 Self-directed
 In-class activity
 Peer-directed and
 instructor-facilitated
 In-class discussion
 and lecture
 Instructor-directed
Other activities
  • Start by reviewing what we did today
  • Then review the learning objectives below - can you answer the questions at a level you are comfortable with?
  • Then, when you are comfortable, have a look ahead at the next topic in the course: check out the topic schedule for your section
 Self-directed

Learning objectives

(How will I know I've learned it?)

 Level of understanding
 Objectives (presented as self-assessment questions)
 Very best
  • Do I have an informed opinion on whether the importance of creativity and innovation depends on the stage of the new venture life cycle?
  • Do I have an informed opinion on whether creativity and innovation are processes that can be learned
 Highly satisfactory
  • Can I explain why creativity and innovation are important to our economy and society? Can I explain the importance of creativity and innovation to the work of the entrepreneur?
  • Given an innovation can I classify it as either a technological or venture model innovation?
  • Can I explain whether it is possible to innovate without inventing? And why this is important?
 Satisfactory
  • Can I offer examples of how creativity can be encouraged in the workplace? On the flip side, can I identify common barriers to creativity?
  • With my notes open, can I name and describe the phases of the new venture life cycle?
  • The types of ventures?
 Maybe just enough to pass
  • Can I define and distinguish between the terms discovery, invention, innovation and creativity?
  • Can I explain the difference between a technological innovation and a venture model innovation?
  • Do I know what is the specific function of the entrepreneur? What does that mean?

Topic notes

(So what's the deal?)

What's Innovation?

The word itself gets used all the time in the news, in press releases made by governments and universities and in company boardrooms around the world – innovation, innovation, innovation! Not surprisingly, it can bring to mind a variety of meanings depending on the context. Although often associated with discoveries carried out by white-haired scientist-types in high tech industry labs or universities, innovation shouldn't imply only carrying out research and development. Nor is it usually the responsibility of only a small group within of a successful company. Rather, innovation has a much broader definition and considerably wider functions, and should touch all of us every day. It's important to understand that definition and how the concept is different from the concepts of discovery, invention and creativity. Let's start by taking a look at how all of these fit together.

Discovery, Invention, Innovation and Creativity

By now you'll have been through an in-class exercise about these topics, in which we'll have considered the following figure. This is referred to as an Innovation Value Chain because it represents the very general sequence of activities that create value in our society and economy. Simply put: discoveries result in new ideas in the form of knowledge and concepts, inventions result in new technologies and business models, and innovation exploits inventions to allow for the creation of value through commodities, goods, services and experiences.

This is based very loosely on the concepts presented in Cooger et al. (1990).

Innovation

Using this conceptualization we are able to land on the following definition of innovation:

 

Innovation: A process of intentional change made to create value by meeting opportunity and seeking advantage.

This short definition has several key elements that are worth considering:

  • 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



Innovation involves creating value by bringing together resources that are hard to come by. It applies to small businesses, existing businesses and a range of other types of entrepreneurial ventures such as non-profit ventures. It also applies to you as an individual.

Technological vs. venture model innovation

In a later topic we are going to look at ways of distinguishing between different types of innovations. Understanding what type of innovation you are dealing with is of critical strategic importance when it comes to you deciding how you will react to an innovation, whether someone else has introduced it or whether you plan to introduce it to the marketplace.

For now, let's just distinguish between two main types:

1. A technological innovation is a change made in response to a new or modified technology.

Classic examples of technological innovation are the internet, the digital camera and cell phones, to name but just a few. Whether you or someone else in your industry is responsible for a technological innovation, it can be a game-changer. And under the right circumstances it can provide remarkable opportunities for growth.

For those who wish to dig deeper (than required in this course), responding to this kind of innovation is dealt with in well-known works like Crossing the Chasm (Moore, 2002) and The Innovator's Dilemma (Christensen, 1997).

2. A venture model innovation is a change made in response to a new or modified venture model, or some component of a venture model (such as the value chain, the approach to distribution, the choice of mainstream customer and other such concepts that we will look at later).

Well-known examples of venture model innovation include Southwest Airlines, the Nintendo Wii and technologies like Apples' iTunes and iPhone.
While technological advances were required to enable the success of these examples, it was the unique changes to the venture models that made them successful.

For those who wish to dig deeper (than required in this course), this type of innovation is also known as strategic or value innovation. It is described in detail in Kim and Mauborgne (1997) and Kim and Mauborgne (2005).

Creativity

And by looking at creativity as the proverbial grease in the wheels of our Innovation Value Chain, we can define it as follows:


Creativity: 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


It is worth mentioning that being creative is not the same as being different.

Then what's entrepreneurship?

A simple definition

Given the concepts we considered above, what is entrepreneurship?

There are many definitions ranging from off-the-cuff statements made by once-successful businesspeople, to rigorous definitions developed by academics. To keep things simple we are going to borrow a simple statement made by Peter Drucker in which he says that ...


... innovation is the "specific function of the entrepreneur."



For the purposes of this course, that is enough said: entrepreneurs seek to innovate. And in keeping with our earlier definition of innovation as change, this means that the entrepreneur is an agent of change made to create value.

Perspectives on entrepreneurship

There are several commonly accepted perspectives of entrepreneurship.

One useful perspective views entrepreneurship as a combination of the right toolset and mindset. In other words, with the right tools in hand, the right approach to using them and enough practice, one can successfully innovate to create value.

It is also useful to view entrepreneurship from the perspective of the new venture life cycle. A simplified model of the new venture life cycle is shown below to demonstrate this perspective. This is also handy because it provides an opportunity to show you the design of some of the course that follow The Entrepreneurial Experience.

And what's a venture?

For the sake of completeness, it is worth defining a new venture:


New venture: An organizational vehicle through which the entrepreneurial team creates value.



In other words, formal value creation is done by teams through new ventures.

For the purposes of this course, new ventures can be:
  • new or existing;
  • small, medium or large;
  • profit or not-for-profit; and
  • corporations or other types of organizations (such as product development groups, professional associations, political parties, clubs, and communities of practice).
And finally, we will consider the following types of ventures defined by their orientation to growth (borrowed from Morris et al., 2001):
  • marginal ventures;
  • lifestyle ('mom and pop') ventures;
  • successful small ventures; and
  • high growth ventures.
While marginal and lifestyle ventures make up the majority, the high growth ventures produce the majority of new jobs, inventions and wealth creation (Morris et al., 2001).

And why is all this important?

The following provide some food for thought:

References

(You don't need to read these references to do well on this topic. They are provided to give proper credit where it's due and for anyone who wants to do further in-depth analysis.)

Couger, D., Higgens, L.F. and S.C. McIntyre (1990) Differentiating Creativity, Innovation, Entrepreneurship, Intrapreneurship, Copyright and Patenting for IS Products/Processes. Proceedings of the Twenty-Third Annual Hawaii International Conference on System Sciences. pp. 370-379.

Morris, M.H., D.F. Kuratko and M. Schindehutte (2001) Towards Integration: Understanding Entrepreneurship Through Frameworks. The International Journal of Entrepreneurship and Innovation. Vol. 2, No. 1. pp. 35-49.

Teaching Notes

Teaching notes have been created for this topic. These can be found by going to teachingnotes.talcie.org and logging in with your account. Search with the keyword "Creativity, Innovation and Entrepreneurship".

License

This work is made available to Mount Royal University students as part of their coursework to provide them with the current and relevant resources they need to succeed in their program of study.

The work and intellectual property contained within it are licensed under the Creative Commons in order to invite feedback and allow for further contributions. To view a copy of this Creative Commons Attribution-Noncommercial-Share Alike 2.5 Canada License, visit: http://creativecommons.org/licenses/by-nc-sa/2.5/ca. Under this license you are welcome to copy, distribute and build on this work for non-commercial uses, under the conditions specified in the license, and provided you give credit as follows:
  • Title of work: Creativity, Innovation and Entrepreneurship
  • Author of work: Dr. Alex Bruton
  • Attribute work to URL: http://resources.talcie.org/topics-and-activities/creativity-innovation-and-entrepreneurship
If you have any questions please contact licensing@talcie.org, or to provide feedback please contact Dr. Alex Bruton at abruton@mtroyal.ca.
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Alex Bruton,
Jan 18, 2012, 7:20 AM
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Alex Bruton,
Jan 14, 2011, 11:39 AM