Innovation and entrepreneurship are essential ingredients in building a successful commercial venture. It’s clear that innovation and entrepreneurship are closely linked; sometimes the terms are even used interchangeably. But, as two distinct yet interrelated concepts, it can be tricky to pinpoint the exact relationship between them.
The process of translating an idea or invention into a good or service that creates value or for which customers will pay.
For businesses, this could mean implementing new ideas, creating dynamic products or improving your existing services. Innovation can be a catalyst for the growth and success of your business, and help you to adapt and grow in the marketplace.
Being innovative does not only mean inventing. Innovation can mean changing your business model and adapting to changes in your environment to deliver better products or services. Successful innovation should be an in-built part of your business strategy, where you create a culture of innovation and lead the way in innovative thinking and creative problem solving.
Innovation can increase the likelihood of your business succeeding. Businesses that innovate create more efficient work processes and have better productivity and performance.
To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products. In business, innovation often results when ideas are applied by the company in order to further satisfy the needs and expectations of the customers.
In a social context, innovation helps create new methods for alliance creation, joint venturing, flexible work hours, and creation of buyers’ purchasing power.
Being innovative means to be open to change and not just open to change but proactively seeking change so it is always asking the question of what is next, what can we do better, what can we do differently and not just for the sake of doing it differently but to create more value than it’s currently created.
Innovation is synonymous with risk-taking and organizations that create revolutionary products or technologies take on the greatest risk because they create new markets.
Imitators take less risk because they will start with an innovator’s product and take a more effective approach. Examples are IBM with its PC against AppleComputer, Compaq with its cheaper PC’s against IBM, and Dell with its still-cheaper clones against Compaq.
What motivates innovative entrepreneurs are materializing new ideas/developing new technologies, which satisfy needs in the market, and being financially independent but making more money than paid jobs.
As an entrepreneur, you are also an innovator. Why? Simply, because you must innovate if you want to succeed. You solve problems on a better or much more innovative way for your customers. You create a company that means something for you, your employees and your customers from nothing. Simply, you need to be an innovative entrepreneur.
Who are innovative persons? I think that every person has enough creativity, dreams, and desires that can lead him to become an innovative entrepreneur. An innovative person is a person who doesn’t only innovate but also builds systems to support the innovation in his company.
Walter adds – “Turning invention into innovation relies on how an entrepreneur positions themselves, gets funding and manages their venture to become successful. Innovation is about the process and organisation needed to generate ideas in any context.”
Entrepreneurship has more to do with attitude, perseverance and focus. An entrepreneur can be a good innovator but an innovation manager is not necessarily a good entrepreneur. The ability to innovate in this sense isn’t just a vital component of a thriving business, but can be seen as an essential aspect of entrepreneurship itself.
Walter observes that today’s advancing tech, such as big data, IoT and machine learning, is now empowering whole networks of entrepreneurs to develop interconnected idea.
The distinguishing feature of new technology is that it enables open innovation in innovation ecosystems. Philips IoT-enabled light bulbs are now part of a platform that, next to giving light, provides opportunities for others to create software that controls it.
And what about the influence of digital channels? It’s difficult to think of a business idea without any digital presence nowadays.
However, a digital strategy should always be based on solving a real job for the customer, not just used for its own sake. You can build a perfect entrepreneurial business without a clue about digital though. Then again, a lot of digital ideas come to market through strong entrepreneurs, and not because they’re digital.
Entrepreneurship is new entry which can be accomplished mostly through launching a new venture. But not every new small business is entrepreneurial or represents entrepreneur.
Firms are more likely to succeed within healthy innovation ecosystems. These ecosystems are made up of human capital, research and development institutions, financial capital, the industrial base, the legal and regulatory environment, business and innovation culture and the quality of networks. Comprehensive innovation policy considers all these different elements and the interaction among them.