Demystifying entrepreneurship ,

Conceptualizing creativity, innovation

By

Dr Ngorora-Madzimure
Expectations??
Learning outcomes

By the end of this lecture you should be able to:

Define entrepreneurship, entrepreneur
Outline the difference between an entrepreneur and a businessman
Define and explain creativity and innovation
Outline common mistakes entrepreneurs make
Introduction:

Entrepreneurship
education

Entrepreneurship
skills
development

Economic
development
Introduction;

• entrepreneurship is a desirable and important mechanism for:

 creating opportunities,
helping firms adapt to change, and
driving national economies.
Introduction:
¾ of American Businesses=1/2 of
American’s GDP (US Dpt of
Labour, 2002)
Asian continent

United States of America

Japan entrepreneurship
education -
Namibia

China
Introduction;

• Organisations need to grapple with a number of forces e.g

Accelerated product and technological change
Global competition
Deregulation
Political instability
Demographic changes
Trends towards a service society and the information age
Definition:

• there is no consensus on the definition of entrepreneurship (Peters

et al.,2009; Bagheri and Pihie, 2010) .

• How do you define Entrepreneurship??

Definitions:

• Entrepreneurship is discovering and utilizing opportunities for

making money
Definition:

• The set of practices involving the creation or discovery of

opportunities, evaluation, exploitation and their enactment (Dante,
2005; Lee and Williams, 2007; Morris et al., 2009; Harbi and
Anderson, 2010)
Definition:

 Entails alertness to opportunities, that is, the discovery of

knowledge previously unknown (Boettke and Coyne, 2003).
 The art, science and act of generating business ideas, developing
them and managing them successfully to earn a profit
Definition:

• “Entrepreneurship is the act of initiating, creating, building and

expanding an enterprise or organisation and gathering other
resources to exploit an opportunity in the market place for long-term
gain” (Rautenbach, 2009:186)
Definition:

• “a set of practices involving the creation or discovery of

opportunities, evaluation, exploitation and their enactment to create
value” (Ngorora & Mago, 2013).
Concept of Entrepreneur:

• An entrepreneur is someone who builds a venture or an enterprise,

producing and serving the market (Kllimo Endlevu Africa, 2009)
• Determined and creative leaders constantly looking for opportunities
to start, improve and expand their businesses (Boettke and Coyne,
2003)
Concept of entrepreneur:

Risk Taker

entrepreneur

Creativity/
innovator
Entrepreneur:
 Difference between Entrepreneur and
Businessman:
BASIS FOR BUSINESSMAN ENTREPRENEUR
COMPARISON
Meaning A businessman is someone who sets An entrepreneur is a
up a business with an existing idea person who starts an
offering products and services to the enterprise with a new
customers. idea or concept,
undertaking commercial
activities.

Nature Calculative Intuitive

Market Creates place in existing markets Creates new market

Risk factor Less Comparatively high

Approach Holistic/Conventional Atomistic/Unconventional

Orientation Profit People

Competition Very high Low

Any example of entrepreneurs??

• ?????
E.g of entrepreneurs:

• Bill Gates of Microsoft Fame

• The Steve Jobs of Apple computers fame
• Mark Zuckerberg of facebook fame
• Strive Masiiwa
• Divine Ndlukula (Queen of the security industry)
• Tsitsi Masiyiwa
• Fiona Mavhinga (Founding member of CAMFED)
• Betty Makoni (Girl child network)
• Hope Sadza
• Jackie Chimhanzi
• Mai Chisamba (mai Chisamba show
Conditions to promote entrepreneurship
development :

• financial support
• Government policies
• Financial support
• Access to finance
• Access to international markets
• Government programmes
• Education and training
• Research and development transfer
• Commercial, professional infrastructure
• Internal market openness
• Access to physical infrastructure
• Cultural and social norms
• Intellectual Property Rights protection
Common mistakes entrepreneurs make

• Group work in 2s: Discuss 5 mistakes that make entrepreneurs fail in

the business
Common mistakes entrepreneurs make:

• Inadequate knowledge (special skills to help them)

• Fear of failure (risk averse)
• Poor management (running finances, business planning, human
resources
• Failure to manage growth
• Lack of focus- (clear on what wants to be achieved)
Common mistakes entrepreneurs make:

1. Wanting to quit in the first year or season

2. Becoming a CEO too soon
3. Trying to take advice from too many people
4. Not knowing how to ask for advice
5. Forcing versus influencing
6. Living the dream too early
7. Trying to sell or involved with too many products. (ref to the blue
ocean strategy – get leaner and sharper)
Common mistakes entrepreneurs make:

8. Thinking I know it or I knew it all

9. Not knowing the value of adequate and good to look infrastructure
e.g farm structures.
10. Acting like a boss
11. Not having a schedule
12. Not knowing or appreciating the value of a business plan in form of
a model (BMC)
Personal traits and characteristics
of entrepreneurs.
Five main attributes that distinguish
Entrepreneurship
1.Autonomy:
Independent action of an individual to develop an idea and seeing
through till completion
2.Innovativeness:
 eagerness to engage in new ideas or processes that might lead to
the invention of new products, services or technological processes
Attributes continued:

3.Risk-Taking:
sense for uncertainty,
 willingness to face the probability of loss or negative outcome
4. Proactiveness:
Taking initiative by anticipating and pursuing new opportunities and
by participating in emerging markets
Attributes continued:

5.Competitive Aggressiveness:
 tendency to directly challenge competitors in order to enter a
market or improve position on the market
Knowledge economy;

• Characterise today’s economy

• Emphasis on importance of creativity and innovation in the
knowledge economy
• the creation of new or enhanced resources to produce wealth
through innovation, an essential characteristic of high-performance
firms.
ENTREPRENEURSHIP IN TIMES OF CRISIS:

• skill in finding new opportunities when things look bleak is a

characteristic of an entrepreneur.
• some of the highest rates of entrepreneurial activity occur during
financial crisis and economic dislocation caused by natural
catastrophes.
Crises seem to spur innovation, not stifle it
e.g:
• General Electric introduced the fluorescent light bulb
Great Depression • Has twice the lifespan of the incandescent lighting but uses half the power

Eisenhower Recession • Ray Kroc Opened the first McDonalds during

Vietnam war and

• Bill Gates and Paul Allen Formed Microsoft
1973 Oil Crisis

Reagan Recession early 1980s • Microsoft Introduced Word

First Gulf War • World Wide Web and Apple Power Book Debuted

Dot Coms Crashed and 9/11 • Ipod came to the market

attacks

GFC 2007-09 • Facebook and Twitter grew global giants

Definition of Key Terms:

• Creativity and innovation involve the creation of something new

which
• “is central to the entrepreneurial process”
• Every individual is creative but
• can be enhanced or suppressed
Definition:

• How do you understand creativity???

Creativity:

• a process through which an individual or a small group engages in the

creation of:
an idea,
that they and an organization consider novel, original, useful and
remarkable
• Ability to see what others cannot see
• Reengineering
• It is non-conformity to tradition e.g Richard Brownstone (Conceived
in 1970 the Virgin Group- grown successful businesses in sectors
including mobile telephony, travel and transportation, financial
services, leisure and entertainment and health and wellness.
• Push boundaries, break rules, and seek new frontiers — even after
launching a dozen billion-dollar businesses and hundreds of other
companies).

• Thinking outside the box

• Creativity can be defined as “the production of novel and useful
ideas” (Amabile et al., 1996, p. 1155),
• Evident in the early stages of innovation processes or cycles-
Origins of creative ideas:

• Normative (being based on what is considered to be the normal or

correct way of doing something)
• Exploratory
• Serendipity (linked more to discovery than to creation; seeing
meaningful relationships where others see only meaningless
coincidences).
Level of Exercising Creativity:

• Individual
• Team
• organisational
Creative people tend to:

1. have knowledge of their specialty and be more or less intelligent,

2. be extravert, sensitive to problems and highly motivated,
3. be independent, persistent, self-confident and sceptical, and
tolerate isolation,
4. take risks, be open to new ideas and tolerate ambiguity,
5. be flexible in combining things and synthesize information.
• Creativity spurs innovation
• Innovation enables creativity
Objectives of creativity:

•Awake curiosity
•To break away from rational, conventional
ideas and formalised procedures
•Managers need to develop creative
solutions and action-based strategies to
solve problems as they allow to increase
understanding of problematic situations,
 Objectives of creativity:

• to expand the opportunity, horizon and

competence base of firms
• to find multiple problems,
• to produce new combinations,
• to generate multiple solutions that are different
from the past,
• to consider alternatives in various situations that
could occur in the future and
Factors that increase/encourage
creativity work climate in a company:

• A secure environment with minimal administrative

interference
• An organizational culture that makes it attractive
and easy for people to discover and solve problems
• Rewards employee performance and enhancement
of intrinsic motivation
• Managerial willingness to take risks for creativity
and innovation
• An open and flexible attitude on the part of
management
Factors that increase/encourage
creativity:
• Providing people with formal and informal
training to enhance creativity
• Keep channels of communication open
• Trust
• Tolerance of mistakes and failure
Why is it important to tolerate mistakes?
• Learn the right way
• Improve work
• Creativity
• Promote initiatives
• Give an environment for being creative
• Confidence
• Room for improvement
• Learn new things
• Sense of belonging to the organization
• Increase motivation or staff morale
What do people learn from mistakes?

•Risk taking
•Efficiency
•Critical thinking
•Research
•Advice
•Improved communication
•restrategise
 Benefits of creativity

Important to solve concrete problems

Easy adaptation to change
Optimizes the performance of the
organization
Change the attitude of the staff of the
organization
Innovation through new product and
process ideas
Innovation:

•Originates from the latin word “innovare”

meaning
•To make something new
Innovation:

Process of turning opportunity into ideas

and of putting ideas into widely used practice

Successful implementation of creative ideas

process of creating a commercial product

from an invention.
Definition of Innovation:

Process of translating an idea or invention into a

good or service that creates value for which
customers will pay
To be an innovation an idea must be replicable at
an economic cost and it must satisfy a specific need
Includes all processes by which new ideas are
generated and converted into useful products
Definition Continued....

•In business innovation often results

when ideas are applied by the company
in order to further satisfy the needs and
expectations of the customers
 Innovation:

•implies novelty but not necessarily

absolute novelty
•Varies from minor to great significance
•Ranges from 1 hour to several years
Can be:

Technological
Non-technological e.g institutional and
organisational
How do invention and innovation differ?

a) Invention brings something new into being—

technical criteria determine its success.
b) Innovation brings something new into use—
commercial criteria determine its success.
For example:
Technological changes: new products, new
production processes
Introduction of advanced manufacturing
technology
Introduction of new computer support services
within an organisation
Administrative changes
New human resources (HRM) strategies,
organisational policies on health and safety or
the introduction of teamwork are all examples
of administrative innovations (not a linear
process) within organisations
Introduction of teamwork in a government
 Types of Innovation:

• Product innovation
• Service innovation
• Process innovation
• Marketing innovation
• Technological innovation
• Radical innovation
• Incremental innovation
• Disruptive innovation
• Imitation
Product Champion:

• individual with an entrepreneurial vision of a new

good or service who seeks to create support in the
organization for its commercialization.
 Innovation has 5 manifestations:

•The introduction of a new or improved goods

•Introduction of a new method of production

•Opening of a new market

•The exploitation of a new source of supply

 Characteristics of innovative or
successful entrepreneurs.
They tend to:
1. have a high level of knowledge,
2. be sociable, embrace challenges and be energetic,
3. be independent, persistent, self-confident and
optimistic,
4. take calculated risks and be open to new ideas,
5. be flexible and creative,
6. desire responsibility, need achievement, value money
and have a future orientation,
7. be a dynamic leader, take initiative and have organizing
skills.
Actions established firms who are successful at
internal innovation take:
a. Encourage people to discuss new ideas and
take risks.
b. Tolerate failure, and encourage learning
from mistakes.
c. Establish reward systems that encourage
innovation.
d. Establish processes and structures to
effectively integrate the innovative process
across functions.
•
 Differences-Creativity and Innovation
CREATIVITY INNOVATION
Idea generation Subsequent stage of
implementing ideas toward
better procedures, practices,
or products.
concerned with absolute, “true” innovation also involves ideas
novelty that are relatively novel—ideas
that have been adopted and
adapted from other
organizations but that are new
to the unit of adoption
(Anderson et al., 2004).
ideas can be reliably assessed that innovation may also
 Comparison

CREATIVITY INNOVATION
involve primarily mainly represents interindividual
intraindividual cognitive social processes in the workplace
processes, (Rank et al.).
centers on idea generation innovation emphasizes idea
and creativity is often seen as implementation
the first step of innovation
(Amabile, 1996; Mumford &
Gustafson, 1988; West,
2002a, 2002b).
As long as an employee
intentionally introduces and
applies a new idea, method, or
 Hence:

•whereas creativity and innovation are

related constructs, they are by no means
identical
From Creativity, Innovation to
Entrepreneurship:
Questions??? Comments!!!

•Thank you