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Essential of Technology Entrep. & Innovation- Chapter two entrepreneurship and innovation

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In chapter two we are discussing the relation between entrepreneurship and innovation.
This course provide the students with a conceptual knowledge regarding the essentials for management practices of a technology-based organization, and the evolution of technology. The topics covered in this course would include: • Introduction to the concept of entrepreneurship. • What entrepreneurs do and their importance to economy • How to seize business opportunity; • Know the process of creativity and difference between invention and innovation • Know how innovation is important as a dimension of entrepreneurship • Critical factors in managing technology; including • The Time Factor (Osborn effect) • Technology Push and Market Pull • The S-Curve of Technology • Technology and Product Life Cycle • The Chain Equation of Technology Innovation • Price Knowledge Gape Relation • Difference between Entrepreneurship and Stewardship Management • Difference between technology leader and followers • Competition and Competitiveness Concepts. • The process of the technological innovation; • Who are the customers; and • How to optimize cost and find finance for your projects • Demonstrate the importance of business plan, including the marketing and financial plans and how to prepare it. • Know the structure and management of a technology organization

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Essential of Technology Entrep. & Innovation- Chapter two entrepreneurship and innovation

  1. 1. CS443 Course Introduction To Entrepreneurship p p Spring 2009, Modern Science & Arts University Chapter Two: Entrepreneurship and InnovationInstructor:Al-Motaz Bellah Alaa Al-AgamawiChapter Source, “chapter one: Entrepreneurship and Innovation” from “The Strategy ofManagement Innovation and Technology” book, by Murray R. Millson and David Wilemon,2008, Pearson Education Inc. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  2. 2. Definition of Creativity and Innovation2 Creativity: The ability to bring something new. Creativity is the ability not the activity of bringing something new. Innovation: Is the process of doing new things. The distinction is important. Id Ideas have littl value until th are converted i t new products, services, or h little l til they t d into d t i processes. Innovation, therefore, is the transformation of creative ideas into useful applications, but creativity is a prerequisite to innovation Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  3. 3. The Creative Process 3 Idea Preparation Incubation, Illumination, Verification, f Germination, , Conscious Subconscious Recognition Application The seeding search for assimilation of idea as or test to Stage of a Knowledge, of being prove ideas new idea, Rationaliza Information, feasible, has value, Recognition tion Fantasizing Realization Validation Isaac Newton, may have been hit on the head by a failing apple, but he discoveredgravity through a lifetime of scientific investigation. Id ll l h h i h b i i i l i Ideas usually evolve through a creative process whereby imaginative people germinateideas, nurture them, and develop them successfully. In each stage, a creative individual behaves differently to move an idea from the seedstage of germination to verification. f i i ifi i Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  4. 4. The Creative Process (Germination)4 Idea Preparation Incubation, Illumination, Verification,Germination, , Conscious Subconscious Recognition Application The seeding search for assimilation of idea as or test to Stage of a Knowledge, of being prove ideas new idea, Rationaliza Information, feasible, has value, Recognition tion Fantasizing Realization Validation Germination stage is a seeding process. Exactly how an idea is germinated is a mystery; it is not something that can be examinedunder a microscope. However most creative ideas can be traced to an individual’s interest in or curiosity abouta specific problem or area of study. For most entrepreneurs, ideas begin with an interest in a subject or curiosity about findinga solution for a particular problem. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  5. 5. The Creative Process (Preparation) 5 Preparation, Incubation, Illumination, Verification, Conscious Subconscious Recognition of Application or search for assimilation of idea as being test to prove Knowledge, Knowledge Information, feasible, ideas has value, Rationalizat Fantasizing Realization Validation ion Once a seed of curiosity has taken form as a focused idea creative people embark on a idea,conscious search for answers. Then they begin an intellectual journey, seeking information about theproblem and how others have tried to solve it. Inventors will setup a laboratory experiments designers will begin engineering new products experiments,ideas, and marketers will study consumer buying habits. In rare instances, the preparation stage will produce results. More often, consciousdeliberation ill onl o e loaddelibe ation will only overload the mind, but the effort is important in order to gather mind b t effo t impo tant o de gatheinformation and knowledge vital for an eventual solution Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  6. 6. The Creative Process (Incubation) 6 Incubation, Subconscious Illumination, Recognition Verification, Application assimilation of of idea as being feasible, or test to prove ideas has Individuals sometimes concentrate intensely on an idea, but more often, they simplyvalue, ideas time to grow Information, I f i Realization R li i allow Validation l V lid i Fantasizingwithout intension effort. Few great ideas come from thunderbolts (flashes of Genius). Most evolve in the mind of creative people whilethey go about other activities. The idea, once seeded and given substance through preparation, is put in a back burner, the subconscious mindis allowed time to assimilate information. Incubation is the stage of “mulling it over” while the subconscious intellect assume control of the creative mulling overprocess. When we consciously focus on a problem, we behave rationally to attempt to find systematic resolution. when we rely on subconscious process, our mind are untrammeled by the limitation of human logic. y p , y g The subconscious mind is allowed to wander and to pursue fantasies, and therefore open to unusual informationand knowledge that we can not assimilate in a conscious state. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  7. 7. The Creative Process (Illumination)7 Illumination, Recognition of Verification, Application or test to prove ideas has value, idea as being Validation feasible, Realization occurs when the idea resurfaces as a realistic creation. Illumination, The Fable of the thunderbolt is captured in a moment of illumination illumination. Illumination may be triggered by an opportunity incident. Most creative people go through many cycles of preparation and incubation, searching for that incident as a catalyst to give their idea full meaning meaning. Illumination is important for entrepreneurs because ideas, by themselves, have little meaning. Reaching illumination stage separates day dreamers from creative people who find a way day-dreamers to transmute value. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  8. 8. The Creative Process (Verification)8 Verification, Verification Application or test to proveideas has value, Validation V lid ti An idea once illuminated in the mind of an individual still has little meaning until verified as realistic and useful useful. Entrepreneurial effort is essential to translate an illumination idea into verified, realistic and useful application. Verification is the development stage of refining knowledge into application application. This often tedious and requires perseverance by an individual committed to finding a way to “harvest” the practical results of his/her creation. During this stage many ideas fall by the wayside as they prove to be impossible or to stage, have a little value. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  9. 9. Alexander Graham Bell, Case study 9 Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  10. 10. Alexander Graham Bell, Case study10 Alexander Graham Bell had been fascinated with the physics of sound since childhood. He wasinfluenced to study human hearing systems by his mother, who had a serious hearing problem. As a youngadult. Bell taught at a school for the deaf and hearing-impaired. and he set up a laboratory for testingnew hearing devices. Many of these devices were awkward mechanical "horns" that amplified, soundwaves. Bell realized the possibilities of altering sound waves i various t B ll li d th ibiliti f lt i d in i types of materials such as steel f t i l h t lwire during the 1870s, and he experimented for several years with magnetic devices in an effort toproduce a hearing aid. In 1875, his lab assistant, Thomas A. Watson, accidentally clamped amagnetized steel reed too tightly to a magnet, and when he plucked at it, the reed came loose with a"twang" that echoed, sending a signal along a wire to Bells magnet receiver. Bell heard the twang andrecognized that an electrical signal had relocated the vibration caused by Watsons steelreed. At that instant, the harmonic hearing aid became a feasible idea, but exactly when Bell conceivedof a harmonic telegraph (telephone) is unknown. It was several, years before he turned his attention tocommercial communications.Alexander Graham Bells example, research on harmonic sound transmission occupied a small percentageof hi ti d i a two-decade period. Perhaps the i b ti period f th telephone could be f his time during t d d i d P h th incubation i d for the t l h ld bexpressed as a three-decade, on-again-off again fascination with human hearing problems. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  11. 11. Innovation and Entrepreneurship11 Invention The creation of Results in new Something new knowledge The T Th Transformation f ti Result in a new of an idea or product, service or Innovation resource into useful processes application If creativity is the seed that inspires entrepreneurship, innovation is the process of entrepreneurship. Drucker “Innovation is the means by which the entrepreneur either creates new wealth- Innovation… producing resources or endows existing resources with enhanced potential for creating wealth” It is important to recognize that innovation implies actions, not just conceiving new ideas. When people have passed through the illumination and verification stage of creativity they creativity, may have become inventors, but they are not yet innovators. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  12. 12. Elements in the Innovation Process12 Translation of creative idea into a useful application pp Analytical Organizing Implementation Commercial Planning Resources Application • To Identify: • To Obtain: • To Accomplish: • To Provide: • Product Design • Materials • Organization • Value to Customers • Marketing Strategy • Technology • Product Design • Rewards for • Financial Need • Human Resource • Manufacturing employees • Capital • Services • Revenue for Investors • Satisfaction for Founders Innovation is the development process. It is the translation of an idea into an application It requires persistence in analytically working out the details of product design or service to service, develop marketing, obtain finance, and plan operations. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  13. 13. Key People in the Technological Innovation13 Creative Source Champion Sponsor • Inventor or Originator g • Entrepreneur or p • Person or organization g who creates something Manager who pursues that backs innovation with new through personal the idea, providing finance, advice and vision or effort. leadership for contacts application A number of industrial studies reveal that for a technology innovation to succeed, there are succeed three important people involved and seven important conditions to satisfy. The combination of these people and conditions satisfies the need for creativity and implementation. implementation Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  14. 14. Seven Conditions Required for Success in Technological Innovation14 An outstanding person in an executive leadership position to support strategic decision that encourage creativity and innovation development. An operational leader to carry out the essential tasks of converting knowledge into a application. commercial application A clear need for the application by sufficient potential consumers to warrant the commitment of resources to innovation. The realization of the product, process, or service as a useful innovation providing value to product process society. Good cooperation among the crucial players and among diversified functions in an organization all of whom together must bring the idea to fruition. organization, whom, together, fruition Availability of resources and the supporting technology to succeed in the endeavor. Cooperation and support from external source who can influence the success of an innovation, innovation including government agencies investors, supplier, and creditors. agencies, investors supplier creditors Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  15. 15. Seven Conditions continue,…15 Beyond the world of high-tech innovation, entrepreneurs take up the creative challenge of innovation new ideas daily. Many of those innovation we take for granted as we entered the 1990s, but more than half ago. of all our existing technologies applications did not exist two decades ago In each instant of innovation, there has been an entrepreneurial champion who persisted in developing a creative idea into marketable application. In each instance the entrepreneur has been able to recognize change and envision the instance, opportunity. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  16. 16. Opportunity Through Change16 Scientific Knowledge: Has been at the heart of many new enterprises and we can see how enterprises, important it is by tracing the development of computers. Process Innovation: Edison s Edison’s light bulb was only a curiosity until he developed an electrical system for supplying power to consumers. Early computers had little value until symbolic language, operating system and data storage techniques were developed developed. Industrial Change: can occur through natural events such as the discovery of oil or as a result of human events. Every industry is fragile and subject to sudden change New laws, the dissolution of old change. laws laws, economic influences, social changes and new technologies are all threats to industry stability, providing in their wake ample opportunities for entrepreneurs. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  17. 17. Opportunity Through Change (cont.)17 Market changes: The success of Henry Ford when he developed an inexpensive automobile automobile. Demographic Change: As a national’s demographic change, new opportunity to serve human needs arise. By tracking these changes, entrepreneurs can identify opportunities and them. react to them Social and Culture Change: Water Systems, Waste Collection, Police Services, Fire Brigades, and Schools began to evolve in the 19th century. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  18. 18. In Class Activity (Open discussion for Change & Opportunity)Data and information in the below video is not references, we are presenting it for the sake of discussing change and opportunity 18 Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  19. 19. Windows and Corridors19 A Window is a time horizon during which opportunities exist before something else happened to eliminate them. A unique opportunity, once shown to produce wealth, will attract competition, and if the industry is easy to enter, the industry will become rapidly saturated. Every successful product and service has had an optimal period of time for commercialization. Those introduced too early have usually failed, and those introduced too late suffered from crowded markets. Entrepreneurs, therefore, must not only recognize opportunities, but also take advantage of them E h f l b l k d f h while windows exist to be successful. The corridor principle suggest that opportunities evolve from entrepreneurs being positioned in similar work or h i h d experience with related venture so that when a window opens it is easy i il k having had i ith l t d t th t h i d i for them to move quickly into a new venture. A corollary is that as a venture becomes expert in one activity, related oppurtunities evolve, and many of them are more rewarding than the initial activity activity. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  20. 20. Windows and Corridors, Case Study20 Bicycles did not become viable commercial products until people needed them as transportation. When that need occurred, hundreds of bicycles manufacturers rushed to take advantage of the “Window of opportunity”. A brief period of opportunity opened for electronic spreadsheets when microcomputers hit the fast growth curve. Several entrepreneurs entered the market with a good spreadsheet products. The first, VisiCalc, which was quite successful. But IBM Lotus 1-2-3 and Microsoft Excel Program forget into the industry market. By 1986, Lotus had set the industry standard, then Microsoft excel takeover. William G W ll Gates of M f Microsoft, f example, was firstly approached by IBM in 1980 to prgram an f for l f l h db operating system for the PC. This is a corridor. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  21. 21. Myths- Fantasies Not Facts21 Luck is for Gamblers: More often successful individuals have been nourshing a concept for often, some time or working on closely related projects when a breakthrough occurs. Presistence and determination played greater roles than luck. Make or Break on the First Venture: Entrepreneurs is not a “boom or bust” process even boom bust process, though many new firms succeed brilliantly and others do not survive for long. The point is that too much distortion exists on both issues. Entrepreneurs Are Mavericks and Misfits: Most successful entrepreneurs, however, are from entrepreneurs however the rank of above average students, and they are relatively unlikely to have drugs or alcohol problems or to run afoul of the law. Entrepreneurs are mavericks in the sense that they instigate change and challenge the status quo but they are not “misfits”. quo, misfits Are Entrepreneurs Born or Made?: If the environmental theme has credence, then learning as much as possible about the entrepreneurial process will better prepare students to succeed in business business. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  22. 22. Success Factors For Entrepreneurs22 The Entrepreneurial Team: The term team is used because more often than not, because, not entrepreneurs do not start business by them selves; they have teams, partners, close associates, or extensive network of advisers. We can infer that success is closely tied to a solid knowledge endeavor. base and substantial experience in related filed of endeavor Venture Products and Services: Nearly all successful ventures start small and grow incrementally; few “gear up” with substantial organizations for a big-bang start. Positive Cash Flow, Flow Profit Margins Cost Control and Overhead monitoring, are all a key success factors. Margins, monitoring factors Marketing and Timing: Successful entrepreneurs tend to have a clear vision of both existing and potential customers. Charismatic Entrepreneur loaded with talent and great idea will not convince investor that a venture is viable without valid market research There are not shortcuts; research. innovation requires market demand, not simply a good idea. Business Ideology: Business ideology is defined as a system of beliefs about how one conducts an enterprise. These beliefs include a commitment to providing customers with value enterprise value, the ability to take calculated risk, the determination to grow,… Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  23. 23. Bonus Activity…23 Nolan K. Bushnell (born February 5, 1943) is an American engineer and entrepreneur who founded both Atari, Inc and the Chuck E. Cheese s Pizza-Time Theaters chain Bushnell has been inducted into the Video Game Hall of Fame and E Cheeses Pizza Time chain. the Consumer Electronics Association Hall of Fame, received the Nations Restaurant News “Innovator of the Year” award, and was named one of Newsweeks "50 Men That Changed America." Bushnell has started more than twenty companies and is one of the founding fathers of the video game industry. He is currently the founder and CEO of uWink, a game- based t b d restaurant startup, and th Ch i t t t d the Chairman of th b d at N Ed N t f the board t NeoEdge Networks, an advertising-based video game k d ti i b d id company. Through Searching the internet, prepare a presentation about Nolan K. Bushnell… Describe his journey in one paragraph using your own words. List the most important milestones which made his in the list, from your own point of view. Describe his journey through the creativity process, Use videos, diagrams, photos in your presentation as much as possible Include your references, be sure that it is trust worthy reference By doing this activity you will take bonus (same weight of assignment) Else you will not loose score Activity Deadline: Next Week lecture. Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  24. 24. Extra Resources for Entrepreneur of the Chapter…24 For Henry Ford you can visit: // / / / / Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi
  25. 25. 25 Q&A… Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi