Entrepreneurship: Creativity and Innovation - Essay Example

Entrepreneurship Creativity and Innovation Innovation is considered as one of the key functions of entrepreneurship as a process and Peter Druker went on to suggest that the "Innovation is the specific function of entrepreneurship It is the means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth" (Kuratko & Hodgetts, 1995, p65). Thus creativity and innovation are considered as essential for the development and creation of wealth in the nation. However the process of creativity and innovation requires sometimes a greater aptitude and certain strength of character to overcome the barriers to the process of creativity. The so called killer phrases are also sometime referred to as one of the real barriers behind the process of creative thinking. However in order to overcome these barriers to the creative thought process, resources are required which might include the right attitude adopted by the entrepreneur. Creativity and innovation are probably the two ways through which entrepreneurs make difference in the world. This assumption of having creative and innovative entrepreneurs is based on the fact that every entrepreneur has certain personal traits and motivations and key element of this is their ability to put their efforts and endeavors behind it. Probably the most innovative and creative endeavor of entrepreneur is his ability to create capital. (Thompson, 1999). By adding value and creating capital, entrepreneurs basically transform their business activities in the larger good of the society. It is largely believed that the success of entrepreneurship therefore base on the personal traits of the entrepreneur which include his ability to be an intuitive thinker and innovator. The notion of creativity and innovation is associated with the process of entrepreneurship because of the fact that creativity is often considered as the personality trait of the entrepreneur. (Thompson, 2004). This approach tends to focus on the role of people in developing creative and innovative enterprises. Many researches have suggested that the competitive advantages which entrepreneurs enjoy over their competitors are based on their internal resources. These internal resources are often linked with knowledge based resources which are ultimately linked with the innovation and creativity of the entrepreneurs. (Mosakowski, 1998). These knowledge based intangible resources flourish creativity and innovation in entrepreneurs. However these knowledge based intangible resources may also not foster creativity and innovation in the context of entrepreneurship if the intentions to implement these resources is missing. Until and unless the entrepreneurial intentionality is missing from the whole process, the creativity and innovation may not spring up through the use of knowledge based resources of entrepreneurs. (Bird, 1988). It is also believed that the creativity and innovation thus success of the entrepreneur will not be achieved until and unless there is a conducive economic system present in the society which provide opportunities to the entrepreneur and it is important that that economic system must not provide the holding of factors of production in the hands of government. Only private or capitalist economies provide the entrepreneur the necessary input to foster creativity and innovation. (Panglaykim, 1979) Creative Motivator Creativity underpins innovation and innovation underpins enterprise. Creativity is often based on the notion that it is based upon novel and useful ideas, regardless of the type of idea and the reasons behind its production. (Unsworth, 2001). In order to get motivated, an entrepreneur requires motivation both from her intrinsic part and extrinsic part. Some theorists maintain that there is only a single kind of intrinsic motivation, which can be described as a motivation to engage in activities that enhance or maintain a person's self-concept. Most theorists define the term more broadly. In its simplest sense, intrinsic motivation is something which entrepreneurs get without any external inducement. This may include like the stronger sense of personal achievement, internal satisfaction that a person is being utilizing her abilities to the fullest of her capabilities. Curiosity is another motivator which helps entrepreneurs to explore the various opportunities and convert them into profitable business ventures to succeed. Whereas extrinsically motivated behaviors of entrepreneurs are largely driven by the externally administrated rewards such as higher earnings, better life style and healthy and growing businesses. (Bateman & Grant). Creative Process The creative process can be developed and improved upon and the level of creativity in every individual largely depends upon their own individual capabilities and efficiency. However as a prelude to both of these concepts, Entrepreneurship is considered as central to this whole process of innovation and creativity. Creativity is thus considered as process which is developed as well as improved also. (Kuratko & Hodgetts, 1995, p67). It is often believed that technological changes prove themselves as the basis for the creative processes, designs, markets and products and behind this entire phenomenon entrepreneur plays the central role. (Shane, 2000). There are various studies which have empirically suggested the link between innovation and entrepreneurship. One such study conducted by Frang Zhao suggested that the entrepreneurship and innovation are positively related with each other and basically interact with each other to flourish the aims of the organization. (Zhao, 2005). This complimentary nature of innovation and entrepreneurship actually help organizations initiated by entrepreneurs to evolve and be more adoptive and flexible in nature. It is often believed that the process of creativity within the organizations follow a four staged process of creativity. (Kuratko & Hodgetts, 1995, p67). These four stages are: 1) Knowledge accumulation 2) The Incubation Process 3) The Idea experience 4) Evaluation and Implementation The first stage of creativity process requires that the entrepreneur gathers the required information. At this stage of creativity process, entrepreneurs mostly gather the requisite business intelligence to develop an opportunity into a budding business idea. This may be achieved through the extensive use of communication with those who are already in the field or reading available literature on the business to which the entrepreneur undertake to embark on. Further resources include the attending of various business seminars, extensive travelling of the places which can be the potential business places of the future. The next stage involves a real challenge on the part of the entrepreneur where her abilities to filter the relevant information is tested. The mind incubation process involves the filtering of important data and information. It must also be noted that this process of incubation may be involuntary in nature and can happen even in sleep where entrepreneurs mind continuously mull over the information gathered at the first stage of the process. The idea experience stage is often considered as the exciting point of the creativity process because it is where the ideas are solidify to get a final shape and are ready to be converted into a business idea. The last stage involves the process of evaluation and implementation of the thought process into a real life business venture. Though all these stages may be used in different contexts but there is a widespread acceptance of these stages and their relationship with each other as far as most of the researchers are concerned. Creative Organization It is often believed that the process of creativity is most likely to occur if the environment within which the entrepreneurs work should be conducive and helpful. In order for entrepreneurships to flourish, it is very important that a conducive economic environment exist first. After that a creative organization is necessary to flourish this. A creative organization allows creativity to flourish mainly due to the presence of a trustful management which allows communication to be open not only internally but to the outsiders also. A creative organization allows the accumulation of employees having a variety of personalities and who are willing to accept the change. It is also necessary that the entrepreneurs must enjoy experimenting with the ideas with very minimal fears for the consequences of the outcome. It is often believed that entrepreneurs are so certain about their entrepreneurial ability that they seldom fail therefore they never fear of being experimenting with the ideas and flourish a culture of merit and innovation. Innovation There is a very thin line of difference between Creativity and innovation. In fact they both are mutual in nature as one supposed to reinforcing the other. The process of creativity is what a human mind thinks and consider as a brilliant idea whereas innovation is the manifestation of this idea into reality. Bringing it into the life. Giving the idea the necessary form and substance is what innovation means. (Kuratko & Hodgetts, 1995, p164). Like creativity, innovation is also considered as a phased process. This process starts with the analysis of the sources of new opportunities. However there are various sources of innovation also which includes but not limited to unexpected occurrences, Incongruities, Process needs and Structural change. Innovation is the stage where the final refinement of the ideas takes place which actually help entrepreneurs to materialize these new ideas. The result of this materialization of the innovation often result into developing of a business plan, prototypes or patent registration by these entrepreneurs to start their ventures on more successful footings. Generally, an innovative process creates four types of innovations which includes 1) Invention which involves development of totally new products, services or processes. 2) Extension involves the use of products are services in different way of an already existing product, service or a process. 3) Duplication involves creative replication of an existing concept which may involve emulating an existing product or service. 4) Synthesis involves a combination of existing products or services to form a new and more innovative combination of offerings. The process of innovation requires that one become more innovative, has ability to learn from failures and must develop the capability of aiming high. Discussion Creative Motivators It is very important for an entrepreneur to get motivated. This motivation can come in the form of either the intrinsic motivation or extrinsic motivation. This kind of motivation involves both personal satisfaction as well as the money. However our entrepreneur, Mr. Benjamin Low considers that money was not really the basic motivator for being the entrepreneur as it was more of the interest and passion of what you like to do which forced him to undertake this entrepreneurial activity. [66] Creative Process The process of creativity is a phased process where it goes from the stage of data accumulation to converting the idea into a solid business model. Creativity in the entrepreneurship requires novel and workable ideas to be put in practice (Unsworth, 2001). According to Mosakowski (1998), the creativity and innovation of the entrepreneur largely depends upon the internal resources of the entrepreneur which provide them the competitive advantage over their competitors. Mr. Low while discussing about his competencies provided a novel insight into his ability to filter the companies in order to get the desired price. This ability to keep your stronger points secret besides having a blend of experience and related educational background suggest that Mr. Low has effectively utilized his own internal resources to get a competitive advantage over the competitors. [1]. Our entrepreneur Mr. Benjamin Low started his business by getting an idea during his National Service training where while meeting with sons of some rich man giving him the workable idea of putting his skills into the profitable venture. [6]. His company offered the services of developing online shopping carts, web designing, motion graphics and other e-Commerce solutions. Though the idea may not seem to be novel however it was workable and got the potential of converting it into an innovative service to be offered. As Shane (2000) defined that the creativity and innovation come with the changes in the technology therefore the impetus behind any change within the context of entrepreneurship is largely dependent on the technology. Mr. Low and his friends were good at using the new technology of internet and through which they have developed the business of providing online marketing solutions.[6]. This creative step, as Shane (2000) has discussed was behind putting in the combination of information technology and business acumen into action. Shane's basic idea that before unleashing any creative entrepreneurship, entrepreneur also needs to spot the opportunities also and in case of Mr. Low, the sweet combination of IT, Marketing as well as the degree in Arts provided him an enough reasons to look for opportunities which combine all these ingredients to make the entrepreneurship started by him a success. [20]. Business established in 1999 and was started at a time when the bubble created by dot.com companies was mostly over therefore spotting an opportunity in such a crucial period and converting it into a budding idea is hallmark of entrepreneurship process. Creative Organization Zhao (2005) was of the opinion that the innovation and entrepreneurships are positively related and provide necessary flexibility within the organization. Mr. Low though started his business along with his childhood friends however slowly these people left and what remained was the necessary character of Mr. Low behind the business who ran the management of the firm during these critical periods and despite directors being leaving the organization, the business has developed such flexibility that their departure did not caused problems for the business.[5]. It was mainly because of the fact innovative business provided the flexibility to Mr. Low's business. Besides the notion that the entrepreneurship creates the results even beyond the capabilities of the entrepreneur (Thompson, 1999). Mr. Low seems, our entrepreneur, seems to be transferring that idea into the reality. As discussed during the interview that with the background in IT, Marketing and Arts, he is not only an HR manager, finance manager and quality control guy but he is the one who delivers the training to the employees also. This suggests that Mr. Low has been able to generate results beyond the capabilities to make his business more flexible and innovative in nature. [20] Innovation Innovation is a point where the final refinement of the ideas took place and a final form of the idea emerge which gives rise to the process of creating the ideas into business ventures. A good entrepreneur should always like the change and challenge to face the new and shifting business environment. Mr. Low considers change as the only constant and believes that in order to be more creative and innovative you need to continuously think out of the box and continue to refine your ideas and business practices to evolve them into a clearer and challenging business ideas. [73] Panglaykim's (1979) view that for the success of entrepreneurship, the presence of conducive economic environment is necessary to make the entrepreneurship click. However, this may not seem to be the case as the business started after the dot.com bubble when people were going off the market and risk of doing the business was higher with more stringent economic conditions. The presence of the capitalist economy is considered as the essential for the success and fostering of the entrepreneurship therefore working in the capital economy in which it can thrive and succeed.[45] Conclusion Our interview with the entrepreneur Mr. Benjamin Low confirmed most of the theoretical framework outlined by the research on the entrepreneurship. Though it seems that the organization's internal mechanism of management may be not as flexible as its external outlook is concerned however its external orientation towards the business requirements are flexible as well as more adoptive in nature. Being the entrepreneur, though Mr. Low may be successful but there exist minor gaps between the theoretical framework of the entrepreneurship and what is practically happening within the practice. References: 1) Thompson, John. 1999.' The World of Entrepreneur- a new perspective', Journal of workplace learning, Vol.11, no.6, pp 209-224 2) Thompson, John, 2oo4.'Innovation through People', Management Decision, Vol.42,no.9,pp 1082-1094 3) Zhao, Feng,2005,'Exploring Synergy between entrepreneurship and innovation", International Journal of Entrepreneurial behavior and research" , Vol.11,no.1, pp 25-41 4) Mosakowski, Elaine. 1998.' Entrepreneurial resources, organizational choices and competitive outcomes', Organizational Science, Vol.9, no.6. pp 625-643. 5) Unsworth, Kerrie.2001.'Unpacking Creativity', Academy of Management Review, Vol.26, no.2, pp 289-297. 6) Shane, Scott.2000.'Prior Knowledge and the Discovery of Entrepreneurial Opportunities', Organization Science, Vol.11, no.4, pp 448-469. 7) Bird, Barbara.1988.'Implementing Entrepreneurial Ideas-The case for intentions' Academy of Management Review, Vol.13,no.3, pp 442-453 8) Panglaykim, J , 1979.'The entrepreneur and growth and development corporation', Asian Survey, Vol.19, no.7, pp 707-711. 9) Pillis, de Emmeline, Reardon, K Kathleen, 2007,'the influence of Personality traits and persuasive messages on entrepreneurial intention', Career Development International, Vol.12, no.4, pp 382-396. 10) Hornaday, Robert, 1992,'Thinking about entrepreneurship; a fuzzy set approach' , Journal of small business management, Vol.30,no.4.pp 12+ 11) Wilson, M Kerry, 2007, 'The controversial role of personality traits in entrepreneurial psychology', retrieved Jan 25, 2008 from http://www.leedsmet.ac.uk/business-start-up/documents/pdfs/Personality%20traits%20in%20entrepreneurial%20psychology.pdf. 12) Shane, Scott, Locke, A Edwin, 2003,'Entreprenurial motivation', Human Resource Management Review, Vol.13, pp- 257-279. 13) Collins, Lorna, Ram, Monder, 2003, 'Managing the entrepreneurial firm' retrieved Jan 25,2008 from http://209.85.135.104/searchq=cache:PLnno74QQikJ:www.mngt.waikato.ac.nz/ejrot/cmsconference/2003/proceedings/criticalrealist/collins.pdf+Managing+growth+of+the+entrepreneurial+firm&hl=en&ct=clnk&cd=7 14) Bateman, Thomas S, Crant, J Michael, ' Revisiting Intrinsic and extrinsic motivation' retrieved Jan 31, 2008 from http://www.commerce.virginia.edu/faculty_research/Research/Papers/IMOBHDP24.pdf. 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