Entrepreneurship
NREM 801.1
ENTREPRENEURSHIP
CREATIVITY, INNOVATION AND ENTREPRENEURSHIP
COURSE LECTURER: Prof. Ikechukwu O. AGBAGWA
Institute of Natural Resources, Environment & Sustainable Dev.,
University of Port Harcourt,
Rivers State, Nigeria.
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CREATIVITY AND INNOVATION
Richard Branson is a British entrepreneur, multi-billionaire, and the founder of “Virgin Records”. Since 1972, Branson has grown “Virgin” into a multi-billion dollar business empire that now includes Virgin Atlantic Airlines. His first business venture – as a sixteen-year old – was an opinion and interview magazine called “The Student”. Despite prominent guest authors like Jean-Paul Sartre and interviewees like Mick Jagger, it failed.
https://www.youtube.com/watch?v=UJYLe7qPNzY
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CREATIVITY AND INNOVATION
Creativity – the tendency to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.
Creativity – the ability to come up with new ideas and to identify new and different ways of looking at problem and opportunities.
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.
Examples and Discussion
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CREATIVITY
WHY ARE PEOPLE MOTIVATED TO BE CREATIVE?
Need for novel, varied, and complex stimulation
Need to communicate ideas and values
Need to solve problems
Note
– To be creative, you need to be able to view things in new ways or from a different perspective.
Among other things, you need to be able to generate new possibilities or new alternatives. Tests of creativity measure not only the number of alternatives that people can generate but the uniqueness of those alternatives.
The ability to generate alternatives or to see things uniquely does not occur by chance; it is linked to other, more fundamental qualities of thinking, such as flexibility, tolerance of ambiguity or unpredictability, and the enjoyment of things before now unknown.
Therefore, creativity is the development of ideas about products, practices, services, or procedures that are novel and potentially useful to an organization or the society at large
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CREATIVITY
THE CREATIVE PROCESS
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CREATIVITY
STEPS IN THE CREATIVE PROCESS
Opportunity or Problem Recognition: A person discovers that a new opportunity exists or a problem needs resolution.
Immersion: The individual concentrates on the problem and becomes immersed in it. He or she will recall and collect information that seems relevant, dreaming up alternatives without refining or evaluating them.
Incubation: The person keeps the assembled information in mind for a while. He or she does not appear to be working on the problem actively; however, the subconscious mind is still engaged. While the information is simmering, it is being arranged into meaningful new patterns.
Insight: The problem-conquering solution flashes into the person’s mind at an unexpected time, such as on the verge of sleep, during a shower, or while running. Insight is also called the Eureka Experience.
Verification and Application: The individual sets out to prove that the creative solution has merit. Verification procedures include gathering supporting evidence, using logical persuasion, and experimenting with new ideas.
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CREATIVITY
PERSONALITY TRAITS OF CREATIVE PEOPLE
Persistence
Self-confidence
Independence
Attraction to complexity
Tolerance of ambiguity
Intuitiveness – (sharp instinct)
Have broad interests
Are energetic
Drive to achieve
Love their work
Take risks
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CREATIVITY
BARRIERS TO CREATIVITY
Excessive focus on extrinsic motivation – e.g. external rewards such as money, fame, grades, and praise
Limits set by superiors
Critical evaluation
Close, controlling supervision
Competition in a win-lose situation – focus is on achieving immediate goals, with little or no regard for building the future
Control of decision making
Control of information
Blindly following the rules
Constantly being practical
Becoming overly specialized
Fearing looking foolish
Fearing mistakes and failure
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INNOVATION
Innovation is the implementation of new ideas at the individual, group or organizational level.
A process of intentional change made to create value by meeting opportunity and seeking advantage.
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.
Examples and Discussion – use examples right inside the class and others
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INNOVATION
There are four distinct types of innovation viz:
Invention – This is the creation of a new product, service or process. Something that has not been tried before.
Extension – The expansion of an existing product, service or process. This would mean that the innovator takes an existing idea and applies it differently (e.g. Gillette razors from single to double etc., Coca-cola – zero coke, coke with lime, etc.; cars – manual, automatic, keyless etc.)
Duplication – adaptation of an existing product or service and then adding the innovator’s own creative touch in order to improve it (e.g. in franchising).
Synthesis – A combination of more than one existing products or services into a new product or service. This means that several different ideas are combined into one new product or service (e.g. fax machine – telephone + photocopier = fax; printer, scanner, photocopier, etc.).
Examples and class discussion
TYPES OF INNOVATION
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INNOVATION
Analytical planning – Carefully identifying the product or service features, design as well as the resources that will be needed.
Resource organization – Obtaining the required resources, materials, technology, human or capital resources.
Implementation – Applying the resources in order to accomplish the plans
Commercial application – The provision of value to customers, reward employees, and satisfy the stakeholders.
THE INNOVATION PROCESS
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ENTREPRENEUR
Derived from French word Entreprendre which means ‘to undertake’.
Jean-Baptiste Say (1767 – 1832): A French economist and businessman defined entrepreneur as an economic agent who unites all means of production – land of one, the labour of another and the capital of yet another and thus, produces a product. By selling the product in the market he pays rent of land, wages to labour, interest on capital and what remains is his profit. He shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.
Peter Ferdinand Drucker (1909 – 2005): an Austrian-born American management consultant stated thus, “An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource”.
Ronald May (2013): An Entrepreneur is someone who commercializes his or her innovation.
Joseph Schumpeter – An Austrian American – Entrepreneurs are innovators who use a process of shattering the status quo of the existing products and services, to set up new products. They employ “the gale of creative destruction” to replace in whole or in part inferior offerings across markets and industries, simultaneously creating new products and new business models. Thus, creative destruction is largely responsible for the dynamism of industry and long-term economic growth.
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Creativity is thinking new things, and innovation is doing new things.
Creativity is the ability to develop new ideas and to discover new ways of looking at problems and opportunities.
Innovation is the ability to apply creative solutions to those problems and opportunities in order to enhance people’s lives or to enrich society.
Entrepreneurship = creativity + innovation
CREATIVITY, INNOVATION AND ENTREPRENEURS
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FROM CREATIVITY TO ENTREPRENEURSHIP
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Creativity is the ability to develop new ideas and to discover new ways of looking at problems and opportunities.
Innovation is the ability to apply creative solutions to those problems and opportunities in order to enhance people’s lives or to enrich society.
Entrepreneurship is the result of a disciplined, systematic process of applying creativity and innovation to needs and opportunities in the marketplace.
Entrepreneurs are those who marry their creative ideas with the purposeful action and structure of a business.
Researchers believe that entrepreneurs succeed by thinking and doing new things or old things in new ways.
CREATIVITY, INNOVATION AND ENTREPRENEURS
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SUMMARY AND CONCLUSION
The change that entrepreneurs bring about is through creativity and innovation. Therefore, it is not surprising to see that entrepreneurs are among the more creative and innovative players of organizational change.
Creativity requires someone (like an entrepreneur) to add value in the marketplace through the innovation process.
From the idea generation to the successful product development and launch, innovation is the seed-bed for change. Charged with the coordination of the innovation process are the entrepreneurs.
It is the job of the entrepreneurs to be creative in identifying the gap in the market and innovate a product to fill this gap.
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Top 15+ Richest Nigerian Entrepreneurs – some did not attend University
1. Late Alhaji Alhassan Dantata – Kolanut trader. He was the wealthiest man in West Africa during his time. He started the Dantata dynasty and his descendants are some of the richest people in Nigeria (Dangote / Dantata family).
2. Olorogun Michael Ibru – founder of the Ibru Organization and head of one of the richest families in Nigeria.
3. Orji Uzor Kalu – billionaire founder of Slok Group. He was rusticated from university for his participation in a student protest. Though he was later granted Amnesty by the school authority, he rejected it and chose to become an entrepreneur.
4. High Chief Olu Benson Lulu Briggs – silent billionaire founder of Moni Pulo.
5. Femi Otedola – Chairman of Forte Oil, SeaForce, etc (largest diesel importer in Nigeria, also owns the largest fleet of ships).
6. Rasaq Okoya – founder of Eleganza Group. Did not attend university
7. Cosmos Maduka – founder of Coscharis Group (sole distributor of BMW vehicles in West Africa), dropped out of elementary school
8. Cletus Madubugwu Ibeto – founder of the Ibeto Group (Petrochemicals, Cement manufacturing)
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9. Innocent Ifediaso Chukwuma – Founder of Innoson Group, manufacturers of IVM motors and Innoson Plastics.
10. Sir Tony Ezenna – CEO of Orange Drugs, Inherited a patent shop from his father and grew it into a conglomerate.
11. Vincent Obianodo – founder, The Young Shall Grow Motors (the largest transport company in Nigeria), RockView Hotels.
12. Emmanuel Isichei Ugochukwo Ojei – Nuel Ojei Holdings LTD (Sole distributor of Mazda, Nuel Autos, Emo Oil). Did not attend university
13. Ladi Delano – CEO of Bakrie Delano, (a $1billion investment firm). Did not attend high institution
14. Bode Akindele – (Modandola Group). Did not attend high institution.
15. Michael Collins Ifeanyi Enebeli Ajereh (aka Don Jazzy) – famous music producer and co-founder of defunct Mo’Hits Records. Now CEO of Marvin Records. Dropped out of Ambrose Ali University Ekpoma after his first year.
16. Mrs Folorunsho Alakija – (Famfa Oil) – Richest woman in Africa, did not attend university.
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ENTREPRENEURIAL PROCESS
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Steps in the Entrepreneurial Process
Discovery
Concept Development
Resourcing
Actualization
Harvesting
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Steps in the Entrepreneurial Process
Discovery: The stage in which the entrepreneur generates ideas, recognizes opportunities, and studies the market
An idea is a concept for a product or service that does not exist or is not currently available in a market niche. It may be a brand-new concept or an improvement of a current product or service.
In contrast, an opportunity is an idea for a new product or service with a market that is willing to pay for that product or service so that it can form the basis of a profitable business
Remember “Creativity and Creative Thinking”
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Steps in the Entrepreneurial Process
Opportunity –
An opportunity has four essential qualities
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Steps in the Entrepreneurial Process
Three Ways to Identify an Opportunity
Food/Fruits
Food/Fruits, Power Supply/Energy Issues
Alternative Fuel etc.
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Steps in the Entrepreneurial Process
Discovery –
In addition
Consider consumer needs and wants
Conduct Surveys and questionnaires – test the market
Study demographics/Market research
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Steps in the Entrepreneurial Process
2. Concept Development:
Develop a business plan: a detailed proposal describing the business idea
Clearly set out your –
Objectives
Mission Statement
Executive Summary
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Steps in the Entrepreneurial Process
Important Components of Business Plan Executive Summary Mission Company Overview Product The Market Marketing plan Competition/competitors Risk/Opportunity Employees Management Capital Requirements Conclusion
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Concept Development
Choose business location
Will a patent or trademark be required?
A trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others
A copyright protects works of authorship, such as writings, music, and works of art that have been tangibly expressed.
A patent for an invention is the grant of a property right to the inventor, issued by the Patent and Trademark Office
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Steps in the Entrepreneurial Process
3. Resourcing: The stage in which the entrepreneur identifies and acquires the financial, human, and capital resources needed for the venture startup, etc.
Start-up resources
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Resourcing
Identify potential investors
Apply for loans, grants and assistance
Hire employees
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4. Actualization: The stage in which the entrepreneur operates the business and utilizes resources to achieve its goals/objectives.
Steps in the Entrepreneurial Process
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Steps in the Entrepreneurial Process
5. Harvesting: The stage in which the entrepreneur decides on business’s future growth/ development, or demise
What is your 5-year or 10-year plan?
Consider adding locations or providing different products/services
Will you go public?
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You are collecting, reviewing, and interpreting surveys you distributed last week about your new business idea. What stage of the entrepreneurial process are you in?
Actualization
Concept Development
Discovery
Harvesting
Tasks
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2. You are currently seeking people and companies to invest in your business venture. What stage of the entrepreneurial process are you in?
Actualization
Concept Development
Discovery
Resourcing
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3. What is an example of an activity for a business
person who is entering the harvesting stage of
entrepreneurship?
Considering opening a second store
Gathering market research data about the product
Having a grand opening for the business
Seeking financial assistance from the Small Business Administration
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4. Preparing a business plan for a new business, renting a building for the new store, and copyrighting the website for the new business are all classified as which stage of the entrepreneurial process?
Actualization
Concept Development
Discovery
Resourcing
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5. Offering shares of stock to public investors and planning goals for the business during the next
five years are examples of activities in which stage of the entrepreneurial process?
Actualization
Concept Development
Harvesting
Resourcing
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Thank You
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