164763391 Entrepreneur

8/13/2019 164763391 Entrepreneur

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IMPORTANCE OF INNOVATION IN ENTREPRENEURSHIP

ABSTRACT

Initially when Peter Drucker wrote about innovation andentrepreneurship in the mid 1980s (Innovation andEntrepreneurship Principles and Practices, 1985) the same wasbased on the then prevailing business practices andenvironment. In the past twenty seven years, there has beentremendous change in the way business is done, as a result owhich the nature and concept o Innovation and

!ntrepreneurship too have been inluenced.

"ith the new innovations # progress in business practices themindset o entrepreneurs have also changed, theentrepreneurs o today are more conident than theentrepreneurs o earlier period # look or somethingchallenging intellectually. $he companies today have very goodopportunities but at the same time, they are aced withe%ceptional challenges and threats that need to be tackled.

$oday, innovation and entrepreneurship have changed. $hereare dierent ways o breeding, e%ecuting and practicing thoseconcepts around the world. $his paper makes an attempt tolook # review at Drucker&s theory, to see what&s applicable ortoday and what is not.

Innovation involves problem solving and an entrepreneur is a problem solver. Anentrepreneur does things in a new and a better way. A traditional businessman working in a

routine manner is not entrepreneurial.Innovation leads to the dynamics that governs the interaction between science, industry, andsociety. Innovative organization wants must have to prepare for renewing the offerings anditsdelivery process to its stakeholders to survive in today’s globalised world. In the present

paper,concept of innovation and entrepreneurship has been studied by the authors. The paper willalsoinclude examples of innovative entrepreneurs and how the innovation in productsserviceshelpsthe business in survival and growth in present globalised market place.

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1. INTRODUCTION

"hat is meant with entrepreneurship and how does this relateto innovation' !ntrepreneurship and innovation are conceptsthat have been given multiple meanings. Innovation andentrepreneurship are oten regarded as overlapping concepts.

$his can be traced back to probably the most well knowndeinition o entrepreneurship, by (chumpeter who deinesentrepreneurs as individuals that carry out new combinations)i.e. innovations*. (chumpeter distinguishes our roles in theprocess o innovation+ the inventor, who invents a new ideathe entrepreneur who commerciali-es this new idea thecapitalist, who provides the inancial resources to the

entrepreneur )and bears the risk o the innovation proect* themanager, who takes care o the routine day/to/day corporatemanagement. $hese roles are most oten e%ecuted by dierentpersons. $he literature on entrepreneurship recogni-es avariety o entrepreneurial roles in economic change, such as+

1. the person who bears uncertainty )night 191*. an innovator )(chumpeter 1923*2. a decision maker )4asson 002*3. an industrial leader )(chumpeter 1923*

5. an organi-er and coordinator o economic resources)6arshall 1890*

7. an arbitrageur, alert to opportunities )ir-ner 192 199*. an allocator o resources among alternative uses )(chult-

195*.

1.1 ENTREPRENEURSHIP

$he word !ntrepreneurship: has been derived rom the ;renchword !ntreprendre: which means $o <ndertake:.!ntrepreneurship can be viewed as a creative and innovativeresponse to the environment and an ability to recogni-e,initiate and e%ploit an economic opportunity. =n entrepreneuris aninnovator who introduces something new in an economy.!ntrepreneurship is doing things that are generally not done inthe ordinary course o business.

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In summary, entrepreneurship is the process o providing valuethrough establishment o a uni>ue comple% o resources inorder to enoy opportunities.

!ntrepreneurship is not a ?personality trait& it is a eature to beobserved in the actions o people or institutions. !ntrepreneursin health, education or business work basically the same way.!ssentially, they do not ust do something better, but do itdifferently .

Despite the long record o investigation o entrepreneurship aswell as much eort o researchers, like other concepts ohuman science, it is diicult and even impossible to provide acertain deinition or that. =ddressing the evolutionary processo this concept includes interesting points. (everal elementssuch as risk susceptibility, innovation, etc. have been added tothe entrepreneurship concept during its evolutionary process.Drucker&s deinition o entrepreneurship has a speciic ocus+innovation. $hus, he distinguishes between entrepreneurialbusinesses, which involve innovation, and other smallbusinesses, which do not. ;or e%ample, a person who developsand markets a new product is an entrepreneur, whereas thetypical corner grocer is not. @ikewise, a restaurant ranchisee

may not be an entrepreneur, while an independent restaurantowner may be.

!ntrepreneurs are deined as individuals )or groups oindividuals* who act independently or as part o a corporatesystem, who create new organisations, or who initiate renewalor innovation within an e%isting organisation.=n entrepreneur is a person who develops a new idea andtakes the risk o setting up an enterprise to produce a product

or service which satisies customer needs. =ll entrepreneursbusiness persons, but not all business persons areentrepreneurs. !ntrepreneurship is the activity which is beingcarried out by the !ntrepreneur. Aenerally !ntrepreneur is theconcerned authority o the business, without their permission,not single changes or decisions are made. In other words, =n!ntrepreneur: is an owner or manager o the businessenterprise who makes money through risk or initiative. $heyare responsible or any changes happened in the business or in

the organi-ation.

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$hink o a woman who sits by the roadside leading to yourhome and who has been selling the same type o ood, rom thesame si-e o saucepan or pot, rom the same table top, andmay not have been able to change her standard o living to any

appreciable e%tent. (uch a woman may be a business personbut not an entrepreneur. $he entrepreneur on the other hand isthe business person who is not satisied with hisBherperormance and thereore always inds ways to improve andgrow.Cence, we see Arowing o a business concern is a veryimportant part o entrepreneurship development. Arowing bysi-e, level o activities and operations conducted number opeople involved, etc accounts or growth o an enterprise but

this growth cannot occur until the entrepreneur himsel is readyto IEF=$!G Hes, until the entrepreneur is ready to take therisk to innovate new things he cannot grow his business.

1.2 INNOVATION

Innovation means to renew or change:. "ikipedia deinesinnovation as simply, a new way o doing something.: JyInnovation:, it is meant to provide a new and useul idea and

its immediate transer to market and to use it in theorgani-ation in order to produce cheaper and better products orto obtain more eicient support o customers. In act,innovation means to make practical those thoughts arising romcreativity and creativity is to use mental capabilities to providea new thought.

Innovation may be in introducing a new manuacturing processthat has not yet been tested and commercially e%ploited,introduction o a new product with which the customers are notamiliar or introducing a new >uality in an e%isting product,locating a new source o raw material or semi inished productthat was not e%ploited earlier, opening a new market, hithertoune%ploited, where the company products were not sold earlier,developing a new combination o means o production.

Although the term is broadly used, innovation generally refers to the creation of better or more effective products, processes, technologies, or ideas that areaccepted by markets, governments, and society. Innovation differs from

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invention or renovation in that innovation generally signifies a substantial positive change as compared to incremental changes.

=ccording to Drucker, innovation is Kwhatever changes the

wealth/producing potential o already e%istingresources:. Peter Drucker viewed innovation as the tool orinstrument used by entrepreneurs to e%ploit change as anopportunity. Ce argued that innovation, as a discipline, iscapable o being learned, as well as practiced.

$he best innovations can be alarmingly simple, and oten havelittle to do with ?technology& or ?inventions&. ;or e%ample, therewas nothing technically remarkable about creating a metalcontainer that could be easily oloaded rom a truck onto aship, but the advent o container shipping as a standardi-edsystem o moving things around the globe was an innovationthat >uadrupled world trade.

6any o the greatest innovations are some kind o social valuecreation, such as insurance, the modern hospital, buying byinstalment, or the te%tbook. "ere it not or the humblete%tbook, which emerged in the mid/seventeenth century,universal schooling would not have been possible, and i

=merican armers had not had access to instalment purchasing,the surge in agricultural productivity would not have happened.

$his inancial innovation allowed them to become much moreproductive today , instead o having to wait years to aord apurchase.

Innovation is the speciic tool o entrepreneurs, the means bywhich they e%ploit change as an opportunity or a dierentbusiness or a dierent service. It is capable o being learned,capable o being practiced. !ntrepreneurs need to searchpurposeully or the sources o innovation, the change and theirsymptoms that indicate opportunities or a successulinnovation. =nd they need to know and to apply the principles

o successul innovation. E these actors+ natural rawmaterials, physical and mental labor and capital. =n innovation

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is a new combination o these three things. !ntrepreneurs, asinnovators, are people who create new combinations o theseactors and then present to the market or assessment byconsumers. $his is a technical conceptuali-ation o what is

innovation is about. it does not give the practicing entrepreneurmuch o a guide to what innovation to make, or how to make it,but it should warn that innovation is a much broader conceptthen ust inventing new products. It also involves bringing themto market.

1.2 IMPORTANCE OF INNOVATION IN ENTREPRENEURSHIP

Any business is integral to the economy. !ithout it, our economy would not survive. "ut a business must also sustain itself, be able to constantly evolve to fulfill the demands of thecommunity and the people. In every business, it is imperative to be industrious, innovativeand resourceful.

#ntrepreneurship produces financial gain and keeps the economy afloat, which gives rise tothe importance of innovation in entrepreneurship. #ntrepreneurs are innovators of theeconomy. It is not $ust the scientist who invents and come up with the solutions.

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In the context of this chapter we are especially interested in this second socialreality (‘entrepreneurship’) and less so in the first. In order to narrow down thediscussion we would like to propose a working definition of entrepreneurshipas the introduction of new economic activity by an individual that leads to

change in the marketplace (cf. Sarasvathy 2000 !avidsson 200"). #his $eansthat we exclude so$e other interpretations of entrepreneurship (as non%innovative self%e$ploy$ent) and parts of the innovation pheno$enon (seefigure &). 'or exa$ple we exclude non%$arket activities such as not%for%profitendeavours changes in contract (e.g. fro$ e$ployee to self%e$ployed) andinternal organiational innovations. *e also exclude $ere conte$plation overnew ideas or introduction of fatally flawed ones that do not change the $arket(directly or indirectly via learning $echanis$s). *e thus do not includenovelty and creativity in any do$ain of hu$an +ehaviour in our concept ofentrepreneurship (see also ,hapter &). Inclusion of all this novelty andcreativity would $ake the events of Septe$+er && 200& an entrepreneurship$asterpiece- #o conceive of a fully fuelled passenger /et as a $issile and to

co$+ine the idea of hi/acking with that of ka$ikae attacks is certainlyinnovative and in ter$s of i$pact econo$ic and otherwise it has fewparallels. 1owever regarding these attacks as driving $arket processes is far%fetched (!avidsson 200"- 3). #his exa$ple also shows that innovations canhave devastating effects on society.'igure &. 4ntrepreneurship innovation and self%e$ploy$entIn line with our definition of entrepreneurship as the introduction of newecono$ic activity +y an individual that leads to change in the $arketplace wecan for$ulate several necessary conditions for entrepreneurship (cf. Shane200"- 5)-

&. existence of entrepreneurial opportunities (environ$ental changes-technological political6regulatory social6de$ographic)

2. difference +etween people (in their willingness and a+ility to act upon anopportunity)

7. risk +earing uncertainty until the entrepreneur pursues the opportunity(does de$and exist8 can the entrepreneur co$pete with others8 can the value chain +e created8 etc.)

". organiing (exploiting the opportunity) either creating a fir$ or usingthe $arket $echanis$ (for exa$ple licensing)

9. innovation- reco$+ination of resources into a new for$ that is +yi$plication not a perfect i$itation of what has +een done +efore andthus involves a change in the $arketplace.

These are necessary conditions for entrepreneurship. It is however

contingent whether the individuals discovering an opportunity areemployees or independent individuals, and whether new firms orincumbent firms are used for the exploitation of the opportunity.

Entrepreneurial opportunities

:ecause the range of options and the conse;uences of exploiting new things areunknown entrepreneurial decisions cannot +e $ade through an opti$iationprocess in which $echanical calculations are $ade in response to a given set ofalternatives (:au$ol &<<7). =eople $ust +e a+le to identify new $eans%endsrelationships that are generated +y a given change in order to discoverentrepreneurial opportunities. 4ven if a person possesses the prior infor$ation

necessary to discover an opportunity he or she $ay fail to do so +ecause of an ina+ility to see new $eans%ends relationships. >nfortunately visualiing these

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relationships is difficult. 1istory is rife with exa$ples in which inventors failedto see co$$ercial opportunities (new $eans%ends relationships) that resultedfro$ the invention of i$portant technologies % fro$ the telegraph to the laser.4very entrepreneur who starts a new +usiness has ideas. #he real challenge isto discover an opportunity that is $ore than /ust a good idea. #heseopportunities can have a radical nature (Schu$peterian) or +e relativelyincre$ental (?irnerian). Schu$peterian opportunities originate fro$changes in the environ$ent (Shane 2007). #hese can +e technological social 6de$ographic and political 6 regulatory changes. 'irst technological changeoften +ased on progress in the research +ase of society is a pri$e source ofentrepreneurial opportunities for new technology%+ased fir$s (for exa$ple inthe I,# and +iotech industries). See section 9.2 for the i$plications of this onecono$ic growth. Second social and de$ographic changes can +e ;uantitativechanges like an ageing population that offers new opportunities forentrepreneurs. It $ay also involve $ore ;ualitative changes- changingpreferences or wants for exa$ple reflected in the rise the creative industriesthat satisfy new wants (e.g. 4nde@ol productions) or in the trend towardhealth and nutrition and the supply of diet and ecological food. In that sensepeople’s necessities are few +ut their wants are endless. #hird deregulationprivatiation and li+eraliation have opened up $any opportunities forentrepreneurship. 7 An exa$ple of deregulation is la+our $arket flexi+ilitypolicy. 'lexi+ilisation of the la+our $arket has opened up several opportunitiesfor entrepreneurship. Bne the one hand $any e$ployees have +eco$e self%e$ployed partly lured +y the lower tax rates in co$parison to wage%la+our. Bnthe other hand there have +een high%growth start%ups that have used this newtrend of la+our flexi+ility to specialie in te$porary staffing. Bther exa$ples ofprivatiation as sources of entrepreneurial opportunities are the downsiing of$unicipal services and the privatiation of the care $arket which haveprovided opportunities for high%growth start%ups.

So$e of the exa$ples /ust given a+out deregulation as a source of opportunitiescan also +e characteried as ?irnerian. Celated to that the fourth ?irnerian source of opportunities can +e for$ulated na$ely opportunities provenelsewhere that can +e pursued in a new context (filling a gap in the $arket). An exa$ple of such a ?irnerian opportunity is the i$itation of the Italiancoffee +ar +y Star+ucks- the founder of Star+ucks was alert enough to see thatthe coffee +ar culture in Italy and its social role $ight translate to the >S. #hese?irnerian opportunities $ost often do not involve straightforwardreplications as the +usiness idea has to +e adapted to the new local context (see‘differentiation’ in ,hapter 7). #hus although conceptually it is an i$itationthe i$ple$entation can +e seen as an exa$ple of (innovative)entrepreneurship.

'inally custo$ers can the$selves +e a source of entrepreneurialopportunities involving so%called user%entrepreneurship (see also user%innovation in ,hapter D).

#he $ountain +ike industry e$erged out of a group of hippies that constructed$ountain +ikes out of existing +ike parts in order to fulfil their want to ride the +ike on off%the%road single track downhills. Eary 'isher one of those hippies started to produce these $ountain +ikes in &<3<" and stood at the cradle of whatturned out to +e a huge industry (:uenstorf 200&). Another exa$ple of user%entrepreneurship is the online co$$unication platfor$ 1yves started out of apersonal need to have a co$puter%$ediated social network that connects people.Initially (in 200") only friends and ac;uaintances of the founders /oined their we+site in 2003 1yves has $illions of $e$+ers has grown into an enterprise with 70 e$ployees and has an esti$ated $arket value of 90 $illion euros

(Inter$ediair 2003- 25). Entrepreneurship as an organizational product

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Figure 2 showed that the discovery of an entrepreneurial opportunitycan be made by an employee (i.e. a paid organization member or anindependent individual. The latter situation is reflected in so!calleduser!entrepreneurship" i.e. a personal need as a consumer is the sourceof the opportunity. #mpirical research has shown that the priorsituation occurs much more often, as most founders start a newbusiness in an industry that is similar or related to their priorexperience ($lepper 2%%&. 'roducer!entrepreneurship) is thus a much

The basic %uestion which we ask ourselves whenever we are talking about entrepreneurshipdevelopment are &!hat is entrepreneurship'

!ho is an entrepreneur'And the answers to these %uestions are even easier than the %uestions itself.

LET US NOW THINK OF WHY ALL BUSINESS PERSONS ARE NOT

ENTREPRENEURS?

Think of a woman who sits by the roadside leading to your home and who has been sellingthesame type of food, from the same size of saucepan or pot, from the same table top, and maynothave been able to change her standard of living to any appreciable extent. (uch a woman may

bea business person but not an entrepreneur. The entrepreneur on the other hand is the business

person who is not satisfied with hisher performance and therefore always finds ways toimproveand grow.)ence, we see *rowing of a business concern is a very important part of entrepreneurshipdevelopment. *rowing by size, level of activities and operations conducted number of peopleinvolved, etc accounts for growth of an enterprise but this growth cannot occur until theentrepreneur himself is ready to I++-AT# /es, until the entrepreneur is ready to take therisk to innovate new things he cannot grow his business.

1.2 INNOVATION

Innovation means 0to renew or change1.Although the term is broadly used, innovation generally refers to the creation of better or

more

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effective products, processes, technologies, or ideas that are accepted by markets,governments,and society. Innovation differs from invention or renovation in that innovation generallysignifiesa substantial positive change as compared to incremental changes.

The following diagram is referred to as an Innovation -alue 2hain because it represents theverygeneral se%uence of activities that create value in our society and economy. (imply put3discoveries result in new ideas in the form of knowledge and concepts, inventions result innewtechnologies and business models, and innovation exploits inventions to allow for thecreation of value through commodities, goods, services and experiences.I*+International +ournal of -areting, Financial /ervices 0 -anagement *esearch1ol.& Issue , 3ugust 2%&2, I//4 2255 6722

www.indianresearchournals.com 198(ource3 http3resources.talcie.orgtopics&andactivitiescreativity&innovation&andentrepreneurshiptopic&notescreativity, discovery, invention, innovation. png' altredirects45Innovation is the specific tool of entrepreneurs, the means by which they exploit change as anopportunity for a different business or a different service. It is capable of being learned,capableof being practiced. #ntrepreneurs need to search purposefully for the sources of innovation,thechange and their symptoms that indicate opportunities for a successful innovation. And theyneedto know and to apply the principles of successful innovation. f these factors3 natural rawmaterials, physical and mental labor and capital. An innovation is a new combination of thesethree things. #ntrepreneurs, as innovators, are people who create new combinations of thesefactors and then present to the market for assessment by consumers. This is a technicalconceptualization of what is innovation is about. it does not give the practicing entrepreneur much of a guide to what innovation to make, or how to make it, but it should warn thatinnovation is a much broader concept then $ust inventing new products. It also involves

bringingthem to market.1.3 IMPORTANCE OF INNOVATION IN ENTREPRENEURSHIP

Any business is integral to the economy. !ithout it, our economy would not survive. "ut a business must also sustain itself, be able to constantly evolve to fulfill the demands of thecommunity and the people. In every business, it is imperative to be industrious, innovativeandresourceful.#ntrepreneurship produces financial gain and keeps the economy afloat, which gives rise totheimportance of innovation in entrepreneurship. #ntrepreneurs are innovators of the economy.It isnot $ust the scientist who invents and come up with the solutions.I*+

International +ournal of -areting, Financial /ervices 0 -anagement *esearch1ol.& Issue , 3ugust 2%&2, I//4 2255 6722

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www.indianresearchournals.com 199The importance of innovation in entrepreneurship is shown by coming up with new way to

produce a product or a solution. A service industry can expand with another type of service tofulfill the ever changing needs of their clients. 6roducers can come up with another product

fromthe raw materials and by&products.The importance of innovation in entrepreneurship is another key value for the longevity of a

business. #ntrepreneurs and businesses began with a need. They saw the need within thecommunity and among themselves that they have come up with a solution. They seize theopportunity to innovate to make the lives more comfortable. And these solutions keptevolving tomake it better, easier and more useful. #ntrepreneurs must keep themselves abreast with thecurrent trends and demands. 7anufacturers are constantly innovating to produce morewithoutsacrificing the %uality.

2ompanies and enterprises keep innovation as part of their organization. Innovationscontributeto the success of the company. #ntrepreneur, as innovators, see not $ust one solution to aneed.They keep coming up with ideas and do not settle until they come up with multiple solutions.Innovation is extremely important that companies often see their employees’ creativity as asolution. They come up with seminars and trainings to keep their employees stimulated tocreatesomething useful for others and in turn, financial gain for the company.ther factors that raises the importance of innovation in entrepreneurship is competition. Itstimulates any entrepreneur to come up with something much better than their competition in

alower price, and still be cost&effective and %ualitative.(mall businesses see the importance of innovation in entrepreneurship. They were able tocompete with large industry and see their value in the economy. (mall businesses areimportantas they are directly involved in the community and therefore, contribute to their financial andeconomic gain. These small businesses know exactly what community needs and fulfill them.All things start small.Innovation is important not $ust in entrepreneurship. As individuals, we are innovators byadapting well to our needs and create our own solutions. #ntrepreneurs are the same. Theinnovation in entrepreneurship helped the country by changing with the times and producingnew

products and service from ones that already exists. And, being innovative has helped us becomesuccessful in all our endeavors.In business and economics, innovation is the catalyst to growth. !ith rapid advancements intransportation and communications over the past few decades, the old world concepts offactor endowments and comparative advantage which focused on an area’s uni%ue inputs areoutmodedfor today’s global economy. +ow, competitive advantage, or the productive use of any

inputs,

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which re%uires continual innovation is paramount for any specialized firm to succeed.#conomist8oseph (chumpeter, who contributed greatly to the study of innovation, argued that industriesmust incessantly revolutionize the economic structure from within, that is innovate with

better or

more effective processes and products, such as the shift from the craft shop to factory. )efamously asserted that 9creative destruction is the essential fact about capitalism.1 Inaddition,I*+International +ournal of -areting, Financial /ervices 0 -anagement *esearch1ol.& Issue , 3ugust 2%&2, I//4 2255 6722

www.indianresearchournals.com 00entrepreneurs continuously look for better ways to satisfy their consumer base with improved%uality, durability, service, and price which come to fruition in innovation with advancedtechnologies and organizational strategies.

1.4 THE FACE OF THE INNOVATIVE ENTREPRENEUR

Albert 2annella, professor of management at the !. 6. 2arey (chool, says that sometimes thedifference between an innovative venture and a replicative one is subtle. 0Innovativeentrepreneurship may cover what:s been tried and has failed in the past, for example.There are really two parts that go into innovative entrepreneurship; one is the invention&comingup with a new idea for a good or service. "ut the other is successfully converting that ideainto a

product or service and commercializing it.In that sense, an electric car that really worked and was well&adopted by consumers would beaninnovation. #ven though electric cars have been produced <invented= before, they have yet to

besuccessfully commercialized.Innovators also might look %uite different from one another; there are innovators whodevelopnew technologies, like we:re seeing right now with biotechnology. There are innovators like7ichael >ell who pair existing technologies with a creative business model. And there areentrepreneurs who find innovative ways to improve applications of new and existingtechnologies, as Innovative (olutions ? (upport Inc. did when designing flat&screen displaysfor airplane cockpits.

The common thread among each type of innovator is that they all continue to innovate tosustaintheir business. 07otorola began by making converters and has transitioned from there to car radios, to mobile radios for !orld !ar II, to T-s, to stereos, and to cell phones. @aced withnewlow cost producers for its existing product line, the company would have failed had it notcontinuously innovated.0"ut for the entrepreneur looking to innovate, whether by developing a new good or service,employing a new business model, or applying existing technologies in new ways.0The 6hoenix 2ompany T*en, for example, %uite consciously pursues innovation throughstateof&

the&art research. ight now they:re trying to take the latest developments in medicine andtransfer them to the bedside to serve a global population.

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In contrast, Another 6hoenix 2ompany, 8>A (oftware, was created when its founder realizedthat then&available supply chain management software for retail companies wasn:tsophisticatedenough. )e took that realization and turned it into an innovation, which now serves a global

population.

I*+International +ournal of -areting, Financial /ervices 0 -anagement *esearch1ol.& Issue , 3ugust 2%&2, I//4 2255 6722

www.indianresearchournals.com 012. RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

a= To study entrepreneurship and innovation b= To study role of the innovative entrepreneur in economy.c= To study and present examples of innovative entrepreneurs.I have used descriptive research design. >ata has been collected from secondary sources.

3. FINDINGS OF THE STUDY

3.1 THE ROLE OF THE INNOVATIVE ENTREPRENEUR IN THE ECONOMY

Innovative entrepreneurship impacts the economy at three levels3 at the aggregate level, at theconsumer level, and at the firm level. The positive effects of innovation percolate through theeconomy.At the aggregate level, innovative entrepreneurship, like its replicative cousin, benefits theoverall economy by creating new $obs and increasing income, raising the potential for newinvestments. In fact, new research demonstrates that it is the gazelles &innovative companiesthathave experienced annual growth rates greater than B5 percent for four or more years & thatcreatethe largest number of new $obs.At the consumer level, the effect of innovation is the added value for consumers & theimproved

products or services available to them at lower costs.At the firm level, innovators can out&compete other companies that are not innovators,

becauseof the cost advantages that innovation produces. @urthermore, firms that produce innovativegoods and services are also more likely to adopt new innovations.(teve 8obs was the greatest innovator and entrepreneur, who created game&changinginnovationsincluding the Apple II, 7acintosh, +eCT, i7ac, i"ook, i6od, 7ac"ook, ( C, i6hone and

thei6ad, and made Apple the most valuable company in the world. (teve 8obs was the co&founder,chairman and chief executive officer of Apple Inc.3.2 CULTIVATING INNOVATIVE ENTREPRENEURSHIP

If innovative entrepreneurship is the key to increasing standards of living, then the %uestionis3how do you cultivate innovation'Arthur "lakemore, professor and chairman of the !. 6. 2arey (chool:s economicsdepartment,says that minimal regulations, a competitive and economically efficient tax system capable of

I*+International +ournal of -areting, Financial /ervices 0 -anagement *esearch1ol.& Issue , 3ugust 2%&2, I//4 2255 6722

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www.indianresearchournals.com 0supporting an appropriately competitive infrastructure, openness to trade and competition,andfacilities for ?> are all necessary factors in an innovative economy.

It:s not likely that policymakers can directly guide innovation, but they can provide the kindof environment that fosters it1. @urthermore, ?> is very important. 2learly all of the mostfamousclusters of innovation && (ilicon -alley, oute DBE in "oston, the esearch Triangle in +orth2arolina && they all have universities in proximity producing basic ?> that can ultimately

becommercialized.The famous clusters of innovation have another factor in common3 a critical mass ofcompaniesinvolved in innovation. 0(ilicon -alley became the innovation mecca it is today almost by

accident. )6 started there in a rented&out garage, and its presence attracted other companies,which attracted others, and so on.This type of clustering produces is called network externalities. Innovative firms accrue

production advantages from their proximity to other innovators. The clustering providessynergy,a knowledge base, a talent base and an efficient means of transferring information.The presence of large innovating companies is important. If you want to cultivate innovativeentrepreneurship, you have to have large innovative companies, because they spawn start&ups. Alot of innovative entrepreneurs get their technical experience working for a large company.nce

they come up with the innovative idea, they leave the company to go out on their own.The presence of a well&funded university involved in ?> is also a critical factor for aninnovative economy. A highly trained labor force and a culture of lifelong learning areimportantfactors in the cultivation of innovative entrepreneurship.In addition to serving as centers for ?>, universities also must do well at educatinginnovativeentrepreneurs. There are two types of education that innovative entrepreneurs need to besuccessful3 on one hand, they need a really solid technical understanding; and on the otherhandthey need an education that stimulates creativity and imagination.0Innovation involves changing the status %uo with respect to customer experiences, product

performance, business processes, alliances, and the channels of distribution or the way the product or service is ultimately delivered to consumers. Thus, teaching innovation is not $ustabout teaching students how to develop new goods or services, but how to explore their ideas,and develop their latent potential for innovation.3.3 SOME OF THE FAMOUS INNOVATIVE ENTREPRENEURS

3.3.1 BILL GATES

!illiam *ates the III, the former 2# of 7icrosoft, for short period of time, had assetsworthover D55 billion dollars, making him the world’s first centibillionaire. Today his assets are

half I*+International +ournal of -areting, Financial /ervices 0 -anagement *esearch

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1ol.& Issue , 3ugust 2%&2, I//4 2255 6722

www.indianresearchournals.com 02that but he remains, as he has for the past decade and then some, the world’s wealthiest manaccording to @orbes.*ates was born on BE ctober, DFGG in (eattle, !ashington to a successful family and wasableto attend a (eattle private school. )is mother was a schoolteacher and his father a (eattleattorney. )e developed interest in software and began programming at age DH when theschoolac%uired an A(&HH teletype terminal from a mother’s rummage sale."ecause of their exploits of bugs in the school’s second computer3 a >#2 6>6&D5, owned by2omputer 2enter 2orporation, *ates and a number of other students, including 6aul Allen&7icrosoft’s co&founder, were offered unlimited computer time in exchange for debugging thecompany’s computers. After 222 went out of business, the students were hired by (ciencesInc.

to write a payroll program. The students were successful and were received royalties on the program.

3.3.2 RATAN NAVAL TATA

atan +aval Tata <born BE >ecember DFH= is the present chairman of Tata sons andtherefore,Tata *roup. )e is also the chairman of ma$or Tata companies such as Tata steel,Tata7otors, Tata 6ower, T2(, Tata Tea, Tata 2hemicals, The Indian )otel 2ompany and Tatateleservices. atan Tata was adopted by +aval Tata and (oonoo 2ommisariat in the Tata@amilya prominent family belonging to the 6arsi community. )e is the great&grandson of Tata groupfounder 8amshed$i Tata. After his parents separated in DFJJ, he was brought up by his

grandmother Kady +ava$bai and did his schooling in 7umbai from 2ampion (chool. Kater,heenrolled in 2ornell Lniversity, where he earned a ".( in architecture with structuralengineeringin DFMB, and has also completed the Advanced 7anagement 6rogram at )arvard businessschool<2lass of DFG=.3.3.3 VIJAY MALLYA

<"orn DE >ecember DFGG= is an Indian li%uor baron anda$ya (abha 76. The son of industrialist-ittal 7allya, he is the 2hairman of the Lnited "reweries *roup and Ninfisher Airlines, which draws its name from Lnited "reweries *roup:s flagship beer brand,

Ningfisher.)e also co&owns the @ormula ne team @orce India, the Indian 6remier Keague team"angaloreoyal 2hallengers, and the I&Keague team #ast "engal @2.According to @orbes.com, as of 7arch B5DD, 7allya, is worth L( OD.J billion. )e is rankedEFin The @orbes !orld "illionaires anking <B5DD=, and HEth in India. )e receives substantial

press coverage that focuses on his lavish parties, villas, automobiles, @orce India, oyal2hallengers "angalore and his yacht, the Indian #mpress. 7allya was born into a Nonkani*oud(araswat "rahmin family which originally from the town of "antawal, near 7angalore inNarnataka. )e is the son of -ittal 7allya and Kalitha amaiah. )e was educated at Ka

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7artiniere for "oys (chool, 2alcuttaP and completed his degree at (t. Cavier’s collegekolkataI*+International +ournal of -areting, Financial /ervices 0 -anagement *esearch1ol.& Issue , 3ugust 2%&2, I//4 2255 6722

www.indianresearchournals.com 03)e later set up business ventures in >ubai, Lnited Arab #mirates. 7allya:s first wife was(ameera and they have a son together, named (iddharth 7allya. (idhartha was educated at!ellington 2ollege in 2rowthorne followed by Queen 7ary:s 2ollege in the Lniversity of Kondon. Kater on, 7allya married ekha with who he has two daughters Kaila is engagedwithloganathan and Tanya 7allya and one son.3.3.4 RAGHAV BAHL

)e is an Indian "usinessman best known for his ownership of several television channels,including T-&DE India. )e received schooling from (t. Cavier’s (chool >elhi and attained a7asters in "usiness Administration from @7( >elhi. )e is responsible for directing most of

thework of T-&DE and channels like 2+"2&Awaaz, +ickelodeon and colors. ecently he haswritten a book :(uper 6ower': which compares the two developing countries 2hina and India.aghav 9earned1 his B55 #ntrepreneur of the year award of #rnst and young. Around G5, heis afirst generation #ntrepreneur. )e started +ewtwork&DE as a television software house in themidnineties. )e developed the India (how and The India "usiness eport for ""2 verysuccessfully. )e saw hard times for many years but he and his team were able to comethroughthe agni pariksha very well. +ow he has in his media house three of the best global properties2+"2, 2++ and -IA27. aghav was born in IA( family and his grandfather was

principalof a government college. )e studied at (t. (tephen college 7"A from >L and went to2olumbiafor his doctorate on scholarship but decided to come back to do what he loved to do.3.3.5 JAWED HABIB

8awed )abib who was 9#ntrepreneured1 into BB5 8awed )abib (alon and JB TrainingAcademies not $ust in India but across Asia, from 7alaysia to +epal and beyond. Kast yearhelaunched )air #xpress outlets, offering hair cut at $ust s FF each. 8awed, is a post *raduate

in@rench Kiterature from 8+L, +ew >elhi. )e went to Kondon’s 7orris (chool of )air>ressingand Kondon (chool of @ashion for a B year course in the art and science of hair style andgrooming. )e is already there in the Kimca "ook of world ecord with @eatof JD5 nonstophaircuts in a day.3.3. KIRAN MA!UMDAR"SHAW

::The stud lady from India: <7anaging >irector of "iocon Kimited a biotechnology company based in "angalore <"angaluru=, India. Niran 7azumdar&(haw was born on 7arch BH, DFGH<ageGE= in "angalore, India. Niran 7azumdar&(haw completed her schooling from the city’s

"ishop

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2otton *irl’s )igh (chool <DFME=. (he wanted to $oin medical school but instead took up biologyand completed her "(c Roology )onors course from 7ount 2armel 2ollege, "angaloreLniversity <DFH=. (he later did her post&graduation in 7alting and "rewing from "allarat2ollege, 7elbourne Lniversity <DFG=. (he worked as a Trainee "rewer in 2arlton and

Lnited"reweries, 7elbourne and as a Trainee 7alster at "arrett "rothers and "urston, Australia.(healso worked for some time as a Technical 2onsultant at 8upiter "reweries Kimited, 2alcuttaandas a Technical 7anager at (tandard 7altings 2orporation, "aroda between DFG and DF.I*+International +ournal of -areting, Financial /ervices 0 -anagement *esearch1ol.& Issue , 3ugust 2%&2, I//4 2255 6722

www.indianresearchournals.com 05(he started "iocon in DFE and spearheaded its evolution from an industrial enzymes

manufacturing company to a fully integrated bio&pharmaceutical company with a well& balanced business portfolio of products and a research focus on diabetes, oncology and auto&immunediseases. (he also established two subsidiaries3 (yngene <DFFJ= to provide developmentsupportservices for discovery research and 2linigene <B555= to cater to clinical developmentservices.)er pioneering work in the sector has earned her several awards, including the prestigious6adma (hri <DFEF= and the 6adma "hushan <B55G= from the government of India.(he wasrecently named among TI7# magazine’s D55 most influential people in the world. (he isalso onthe @orbes list of the world’s D55 most powerful women, and the @inancial Times’ top G5womenin business list.

4. CONCLUSION

!ith rising population of the world, the world’s need and necessities pattern had also evolvedthrough the years. To sustain the ever increasing demand and supply of products, rightentrepreneurship skills and innovation are much more needed. !ithout new business ideasandtechnology to support it, no consumer demand will be fulfilled completely. Thus, innovationand

entrepreneurship is the need of hour and needs to be adopted by one and all businessenterprises.Innovation and #ntrepreneurship is a good resource for categorizing and identifying sourcesof innovation. #ntrepreneur does an excellent $ob of organizing the key elements involved ininnovation and there is a fair amount of real world examples that help others understand theconcepts. Innovation and #ntrepreneurship is more about creating a framework for innovationthat can be used to compartmentalize current practices and shed light on their origins. Toaccurately point out, the least likely sources of innovation are from new knowledge and

brightideas. The insight into this alone, makes the concept well worth understanding.

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