Innovation and Entrepreneurship Concepts
Core Concepts of Innovation and Entrepreneurship
Innovation and Creativity are two terms are used in your course, explain what they mean? And make a comparison between them discussing the main differences between them (400-500 words, 25 marks)
Innovation and entrepreneurship concepts can be understood by approaching each concept independently. Innovation is important, but it does not come about automatically as it is fueled by entrepreneurship. This is a strong mixture of visualization, passion, insight, energy, judgment, eagerness, and hard work to support the conversion of new problem-solving ideas into reality. Discussions about innovations are often difficult since the exact meanings of specific key terms are unclear. Notably, there exists confusion about the differences between creativity and innovation. First, innovation can be also be defined as the processes used in the translation of ideas into beneficial and useable new processes, products, or services. Innovation has also been defined as implementing a novel or considerably improved outcomes or processes, such as new marketing, business practices, and external relations. Secondly, creativity is defined as the act of the conversion of novel and imaginative ideas into realism. It can be characterized by an aptitude of perceiving our world in new and better ways, identifying hidden patterns, links between outwardly disparate phenomena, and producing solutions.
In understanding innovation and entrepreneurship concepts it is important to note that there is no innovation in the absence of creativity. Hence the two are interrelated. Creativity is a strong driving force behind innovations through the integration of viewing things from a different viewpoint coupled with freedom of precincts by rules and norms. There are some differences between the two concepts. First, creativity is the act or capability of conceiving unusual or original things. In contrast, innovation is implementing new things through the introduction of new ideas, solutions, processes, or products. Secondly, creativity consists of two main processes: thinking and producing. But, there are two main models used in the innovation process, namely the technology-push and need-pull. Besides, creativity is important as it helps enterprises manages tasks, improves staff performance, and creates quality products. On the other hand, innovation is important as it is the only way that an enterprise differentiates its distinctive and valuable products from the competitors. The innovation and entrepreneurship concepts difference are understood by explaining each concept separately.
Some nations are better than others in innovation and creativity. Explain this sentence and elaborate on the main barriers to creativity and innovation (400-500 words; 25 marks).
Some nations have more innovations and creativity due to the accessibility to robust scientific and technical infrastructure, including resources and research university systems that attract the talented, high-quality personnel that devise inventions and technologies. Besides, the bulk of innovations occurs at the edge of cultures, where cognitive differences are connected with identity differences to create better outcomes. Here, nations with more innovations and creativity have diverse groups offering varied ways used in the representation of issues and situations, classification and interpretation of information, devising solutions, and prediction of results.
Furthermore, these nations have young people who have a high likelihood of trying new things, thus, contributing to both the demand and supply sides of innovation. The youth tend to undertake more risks while challenging the status quo, which triggers innovation. Next, intellectual property protection also facilitates innovation and creativity in some nations by offering patent protection as well as honor contracts, which makes it possible for entrepreneurs to generate equitable returns on investments. While some Asia nations have surpassed the U.S. in terms of higher citizen educational achievement, the number of persons graduating as scientists and engineers, speed and diffusion of the Internet. But, they are still not as innovative as the U.S. since a risk-taking culture is a pivotal contributor to innovation and creativity.
There are three main barriers to involvement in creativity and innovations. The first barrier is the lack of motivation and trust, which are vital in the development of strong partnerships. Perhaps, the main factors in the creation and processing of new ideas are the lack of motivation and confidence by senior managers regarding employee involvement. Furthermore, the resistance towards change and willingness to maintain the status quo hinders the creative participation of employees in solving problems in organizations. The final barrier to creativity and innovation is decentralization. Though the decision to physically distinct departments offers autonomy over the work routine, some internal leaders can create barriers that block creativity.
Explain the importance of finance and the sources of finance for entrepreneurial ventures (400-500 words, 25 marks)
The decision to start an enterprise could be meaningless if one does one gets adequate cash for financing the enterprise. Securing the required financing is one of the most significant functions of starting an entrepreneurial venture. It is equally essential to comprehend the sources of funding that exist across the different phases of the development of entrepreneurial ventures. An individual entrepreneur’s capacity to utilize their personal networks to gain accessibility to varied sources is equally important as obtaining raw materials, information about opportunities, and navigating their enterprises through its life-cycle phases. Finance is important as it enables entrepreneurs to create new enterprises, expand into new and larger markets, and enhance production capacities, leading to economies of scale. Besides, finance is important as it ensures there are adequate funds for operations and prudent investments in capital expenditures. Therefore, the significance of finance lies in the capacity to maintain smooth operations without depleting their money while also obtaining funds needed for investments in the long-run.
The entrepreneurs or innovators have varied choices in terms of sources of raising funds for their entrepreneurial ventures. The sources of finance are broadly classified into internal and external sources. First, the internal sources of funding are generated from inside the business, including the owner’s capital and reinvested profits. Secondly, the external source outside the enterprise, like suppliers, investors, and lenders. The primary sources include personal resources, venture capital companies, commercial banks, microfinance, crowdfunding, philanthropic venture capital, government financing, and capital markets. Compared to the internal funding, raising funding from external sources requires additional efforts to adhere to stringent eligibility guidelines and other legal obligations. Next, the methods and sources chosen by an entrepreneur can also reflect the concerned time. Hence financing can either be short, medium, or long-term. Generally, as an entrepreneurial venture moves through the advanced stages of the life-cycle and grows its operations, more external sources and techniques of financing become available. The utilization of external sources has implications for the ownership, conduct, and structure of the enterprise. In summary, an in-depth understanding of the different issues linked to finance and issues of securing suitable types of financing is essential for entrepreneurs and innovators.
Explain five sources of innovation ideas (400-500 word, 25 marks)
Innovative ideas can be obtained from a wide variety of sources such as customers, marketing and sales, employees, leaders, competitors, and suppliers. First, the customers offer the most significant source for ideas as they provide the absolute evaluation of products and drive sales. Hence, customers are the most fruitful sources for innovative ideas. The innovation leaders use various techniques for garnering and collecting customer ideas to use the power of customers wholly. The information and any other feedback obtained from consumer surveys and test groups are used in deriving ideas for developing new and improved products. Secondly, the competing firms and leaders are underutilized sources for innovative ideas. Entrepreneurs can attend industry conferences, tradeshows, and exhibitions to gain more information and insights on the innovative ideas that have been developed or researched by the competitors. These ideas can then be appended or modified to create new products. An entrepreneur should strive to stay networked and well-connected with other persons in the same industry as an avenue for collecting ideas at a higher level.
Another source is the internal employees in collaboration with sales and marketing, which account for the most prominent sources for innovative ideas. The experience of employees, coupled with industry exposure and product knowledge is the most well-informed source of ideas that provide comprehensive and structured proposals for developing new products. Also, entrepreneurs can review the past to identify old ideas when collecting proposals for product development or improvements. In most cases, past ideas are not abandoned as they could have been assessed poorly, or the available technologies would not enable cost-effective product and process development. Lastly, just as the past holds an outstanding number of innovative ideas, the future could also prove to be fruitful. This involves partnering with young academic researchers in universities and research institutions who devise new concepts by thinking outside the box. The young researchers are more appropriate for asking questions, solving problems creatively, and devising ideas applicable to a broader demographic customer base.