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M A R C U S. 7. INNOVATION AND ENTREPRENEURSHIP. Chapter Learning Objectives. Explaining the factors needed for successful innovation and entrepreneurship. Examining barriers to innovation and suggesting how to overcome these barriers.

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M a r c u s

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M a r c u s

7

INNOVATION AND ENTREPRENEURSHIP


Chapter learning objectives

Chapter Learning Objectives

  • Explaining the factors needed for successful innovation and entrepreneurship.

  • Examining barriers to innovation and suggesting how to overcome these barriers.

  • Understanding how to identify opportunities for innovation and entrepreneurship.


Chapter learning objectives continued

Chapter Learning Objectives(Continued)

  • Being aware of the role leading-edge industries and environmental challenges play in innovation and entrepreneurship.

  • Distinguishing risk from uncertainty and exploring different types of uncertainty.

  • Seeing innovation and entrepreneurship as a long-term process.


Invention and innovation

Invention and Innovation

A promising idea is an invention: It is the creation of an idea in a laboratory, a test of the principles involved, and an act of technical creativity where a concept may be suitable for patenting

Innovation entails actually delivering on the idea’s promise by creating distinctive value and paying attention to the needs of customers.


Ex 7 2 invention versus innovation

Ex. 7.2Invention Versus Innovation


Ex 7 3 types of entrepreneurs

Ex. 7.3Types of Entrepreneurs

  • Stubborn dreamers

    • Stick tenaciously to vision despite odds (less than 1 in 10 new ideas bear fruit)

    • Sometimes exhibit foolhardy optimism to overcome natural inclination to caution

  • Leaders of small companies

    • May not have access to capital, workforce, or other resources to complete the task

  • Refugees from large corporations

    • Have solid business experience, which may mean more success


Ex 7 3 continued

Ex. 7.3(Continued)

  • Women

    • Numbers are increasing

  • Classic inventors without conventional credentials

  • Well-connected individuals

    • Access to investment banks and venture capitalists


Sources of funding for new businesses

Sources of Funding for New Businesses

  • Own personal fortunes and contacts

  • Commercial banks

  • Venture capitalists

  • Initial Public Offering (IPO)

  • Large corporations


Business plan

Business Plan

A business plan describes the business. It has an external analysis that covers such essentials as suppliers, customers, and competitors; an internal assessment of the organization’s capabilities and its functional plans; an implementation schedule; an end-game strategy that indicates when the business will be viable; financial projections; and a risk analysis


Economic growth

Economic Growth

  • Economic growth – the capacity to produce the goods and services people desire

  • Economic growth depends on

    • Quantity and quality of labor and natural resources

    • Capital, machines, and equipment

    • Management

    • Values that encourage hard work, diligence/thrift

    • High level of technology


Ex 7 4 innovation waves

Ex. 7.4Innovation Waves


Ex 7 5 next innovation wave

Ex. 7.5Next Innovation Wave

Extension of Human Sensory Capabilities and Intellectual Processes

  • Genetic engineering

  • Advanced computers/ telecommunication

  • Robotics

  • Artificial intelligence

  • Alternative energy (solar, fuel cells, etc.)

  • Advanced materials (molecular design, new polymers, high-tech ceramics, fiber-reinforced composites)


Ex 7 6 environmental challenges as opportunities

Ex. 7.6Environmental Challenges as Opportunities

New Model

Win-Win

High

Compliance

Model (neutral)

Profits

Old Model

Win-Loss

Low

Bad

Good

Environmental Performance


Ex 7 8 enhanced efficiency via pollution prevention at novartis

Ex. 7.8Enhanced Efficiency via Pollution Prevention at Novartis


Ex 7 9 material balance model

Ex. 7.9Material Balance Model

T

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P

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product

1

T

O

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N

P

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Hazardous/

solid waste

2

Process

step

waste/

water

3

air

releases

4

Total inputs =

Total outputs

other


Ex 7 10 minimizing risk

Ex. 7.10Minimizing Risk

  • Focus on simple, well-trod areas

  • Establish new generations of existing products

  • Introduce new models

  • Differentiate product rather than create different ones

  • License others’ inventions

  • Imitate others’ product introductions

  • Modify existing processes

  • Make minor technical improvements


Types of uncertainty affecting new product development

Types of Uncertainty Affecting New Product Development

  • Technical uncertainty

  • Business condition uncertainty

  • Market uncertainty

  • Government uncertainty


Difficulties of successful innovation

Difficulties of Successful Innovation

  • The entities that make the discoveries are not always the ones that profit from them

  • Innovation rarely is instantaneous

  • Diffusion is very uneven

  • Since imitators face lower costs, the incentive to be innovative and entrepreneurial is not large


Ex 7 11 the innovation journey a typical path

Ex. 7.11The Innovation Journey – A Typical Path

  • Coincidental events initiate gestation of many years

  • Plans presented to resource controllers in form of sales pitches

  • At start, disagreement and lack of clarity abound

  • Ideas proliferate, making managing difficult

  • Lack of continuity among personnel creates problems

  • Emotions run high, leading to frustration, setbacks, mistakes, and blame

  • Problems snowball and patience of resource providers weakens

  • A struggle for power ensues

  • Resources may run out before dreams fulfilled


Ex 7 12 an augmented view of innovation

Ex. 7.12An Augmented View of Innovation


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