Lesson 1: Innovation on
Entrepreneurial Endeavours
Innovation in Entrepreneurship
- Specific function of entrepreneurship,
deals with creating and implementing
new ideas, developing dynamic, products
and new services or improving existing
ones.
Drucker, 1985 - Developing good and
markable ideas that have undergone
various development stages, a product of
extensive thinking, research, experience,
and work.
Glossary of Terms
Approach - a means used in handling a
problem, job of work, etc.
Capital - the amount invested in a
business.
Customer - anyone who buys goods
from, or avail of services from another.
Development - an important event,
occurrence, or change. It could also
mean the production of new goods and
services using new techniques or
technology.
Idea - a product of mental exercise such
as a thought, notion, concept, opinion,
conviction, or plan.
Opportunities - conditions that are
conducive for the attainment of a goal or
a chance to achieve success or progress
like in business.
Process - continuous actions that
produce a change, development, or a
method applied to produce goods and
services.
Resources - something that is really
available for use. It could be human
resources such as knowledge, talents,
skills; or non-human like time, energy,
and money.
Routinary - a usual method or procedure
in doing things.
Solution - a well thought of answer to a
problem, issue, or concern.
Application - the act of putting
something to good use.
Competition – a series of action or steps
directed at trying to win something that
another person is also trying to win.
Conceptual – the ability to think
creatively, understand, and analyze
complicated and abstract ideas.
Exploit – to utilize something fully and
derive something or benefit from.
Gadgets – a small mechanical device,
instrument, or tool especially an
ingenious or novel one.
Influx – an arrival, entry, or coming of a
large number of goods, people, or things.
Opportunities – circumstances that
make it possible to do something. A
chance for greater success.
Perceptual – the ability to explain,
clarify, or become aware of something
using the senses.
Sustainable – ability to maintain at a
certain rate or level. Ability to continue
something with minimal long term effect
on the environment.
Wealth - riches, abundant possessions,
valuable resources, or material
possessions.
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Important Innovation Steps in
Business
1. Analyze the market environment, the
needs and wants of costumer, and the
nature of existing competitors. Be open
the new idea and learn to adapt to
change.
2. Plan a strategy and responsive
program, which includes innovation as a
key business process government the
entire business.
3. Develop employees from the top down
to become innovators. Inspiration
leadership drives innovation in business.
4. Establish connection with customer
and employees for idea generation and
for improving process, products, and
services both internally and externally.
5. Utilize available resources, business
consultant/advisors, grants and
assistance to ensure creativity and
innovation into the business.
Creativity: It’s Role in the Innovation
Process
(Matherly & Goldsmith, 1995)
- Creativity is the generation of ideas that
result in the improved efficiency or
effectiveness of a system.
(Kuratko & Hodgetts, 1989)
2 important aspects of creativity
1. Process - Is a goal-oriented and its
designed to obtain a solution to a
problem.
2. People - The resources that determine
the solution.
4 Phases of the creative process
1) Background or Knowledge
Accumulation
- This involves constant and
extensive reading, exchanging ideas w/
others and attending professional
gatherings and workshops successfully.
2) The Incubation Process
- Usually happens when people
are engaged in activities that are not
related to the subject or problem.
3) The Ides Experience
- A phase when one would simply
smile because of a bright idea that
suddenly comes to mind. This is also the
phase that other people mistake for as
the only component of a creativity.
4) Implementation and Evaluation
- This is the phase where
successful entrepreneurs identify ideas
that are practical, feasible, and doable.
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Diagram Presentation of the Creative Process

Knowledge Accumulation

Implementation/Evaluation Creative Process Incubation Process

Idea Experience

Types of Innovation

1. Invention - It refers to newly created products, services and processes which are often
novel and untried or have never been before.
2. Extension - It refers to existing products, services or processes that are expanded. A
different application of a current idea is tried.
3. Duplication - It refers to existing product, or processes that are replicated. An
entrepreneur’s own creative touch is added to improve/enhance the product.
4. Synthesis - It refers to existing concept and factors that are combined into a new
formulation it involves gathering numbers of existing ideas or items and finding ways to
make this from a new use or application.

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3 Modes of Innovation
1. Entrepreneurial Innovation - It pursues creative or novel solution to challenges
confronting a business organization such as developing new products and services, or
new administrative techniques and technologies that are geared towards the efficient and
effective performance of organization functions.
2. Technological Innovation - It occurs when business try to gain a competitive
advantage either by reducing costs or by introducing a new technology.
3. Strategic – Reflexive Innovation - It refers to how things are done (processes) instead
of giving much attention to the end product.

Sources of Innovation
1. Unexpected Occurrence
- Unanticipated or unplanned event, or incident.
2. Incongruity
- This happens whenever there is a gap between Expectation and reality.
3. Process Need
- Is a demand for the entrepreneur to innovate and answer a particular need, or to
answer a current consumer demand like the need to manufacture health food,
convenience food, or times saving devices.
4. Industry and Market Changes
- Consumers attitude, advancement in technology, industry growth etc. are
developments that cause continuous shifts in the market.
5. Demographic Change
- This occurs as a result of changes in population, education, occupation, age,
geographic location etc.
6. Change in Perception
- Opportunities for innovation can develop when a society’s general assumption,
attitudes and beliefs changes.
7. Knowledge – Based Concept
- This is used basis for the development or creation of a new idea or invention.

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