ENTREPRENEURSHIP, INNOVATION AND CREATIVITY

The entrepreneurs bring about change by persuasion thereby shifting economic resources away from settled endeavors into areas of higher yield and increased productivity. Entrepreneurship is the process of wealth creation rather than wealth accumulation. A very important dimension of wealth creation and every new venture is innovation. A blend of innovation and the creative endeavor leads to entrepreneurship. Entrepreneurs build new ideas from which they establish new enterprises that increase value to society.
All new small businesses have several features in common. However, to be entrepreneurial an enterprise should possess special features in addition to being new and small. In truth, entrepreneurs are a smaller number among new businesses who originate something new, something different; they transmute values. Creativity is the seed that inspires entrepreneurship, innovation establishes the process. Innovation is the way by which the entrepreneur either creates new wealth or endows existing resources with increased potential for creating wealth. Motivation is the process of doing new things. Innovation requires action and not just conceiving new ideas. When people have gone through the illumination and verification phases of creativity, they may become inventors, but not innovators.  Inventors are not confined to those who create new products. They envelope those who find out new technological processes, new forms of plant life, and bring out new designs. Each of these by the way can lead to new patents. Inventors usually are people who deal with "things," such as new products, but most inventions deal with new processes or new technical knowledge. Nevertheless, for an idea to have value, it must be useful or be marketable, and to achieve either status, the idea must be developed. Innovation is the development process. It is the translation of an idea into an application and requires persistence in analytically working out the details of product design or service, to develop marketing, obtain finances, and plan operations. If the entrepreneur is going to manufacture a product, the process includes obtaining materials and technical manufacturing capabilities, staffing operations, and establishing an organization. Thus entrepreneurs create wealth by creating something new or different giving rise to opportunities.

Creativity as a prerequisite to innovation

Creativity is "the ability to bring something new into existence. This  emphasizes the "ability," not the "activity," of bringing something new into existence. A person may therefore conceive of something new and envision how it will be useful, but not essentially take the necessary action to make it a reality. Innovation is the process of doing new things. This distinction is important. Ideas have little value until they are converted into new products, services or processes. Innovation, therefore, is the transformation of creative ideas into useful applications, but creativity is a prerequisite to innovation.

The Creative Process

Evidently, action by itself has no meaning; of little value to "do things" without having inspiration and direction. Entrepreneurs need ideas to pursue and ideas seldom materialize accidentally. Isaac Newton may have been hit on the head by a falling apple, but he discovered gravity through a lifetime of scientific investigation. Ideas usually evolve through a creative process whereby imaginative people germinate ideas, nurture them, and develop them successfully. The creative process involves idea germination, preparation, incubation, illumination, and verification. However, in each stage, a creative individual behaves differently to move an idea from the seed stage of germination to verification. 

Idea Germination

This stage is a seeding process like the natural 'seeding that occurs when pollinated flower seeds, scattered by the wind, find fertile ground to take root. It is a mystery how an idea  germinates. However, most creative ideas can be traced to an individual's interest in or curiosity about a specific problem or area of study. For example, Alexander Graham Bell had been fascinated with the physics of sound since childhood. He was influenced to study human hearing systems by his mother who had a serious hearing problem. As a young adult, Bell taught at a school for the deaf and hearing-impaired and he set up a laboratory for testing new hearing devices. Many of these devices were awkward mechanical "horns" that amplified sound waves. Bell realized the possibilities of altering sound waves in various types of materials such as steel wire during the 1870s and he experimented for several years with magnetic devices in an effort to produce a hearing aid. Bell's "idea" for a hearing aid was evidently seeded years before he invented the telephone, and it evolved through his interest in helping others. He had already spent years studying the physics of sound and experimenting with sound-transmitting materials so that his mind was "fertile" and open to the opportunities for harmonic telegraphy. For most entrepreneurs, ideas begin with interest in a subject or curiosity about finding a solution to a particular problem. More recently, Nolan Bushnell founded Atari and the video game industry by trying to create a way to use micro- electronic circuitry to convert home television sets into interactive media.

Preparation

Once a seed of curiosity has taken form as a focused idea, creative people go on board on a conscious search for answers. If it is a problem they are attempting to solve-such as Bell's determination to help those with impaired hearing-then they begin an intellectual journey, searching information about the problem and how others have endeavored to resolve it. If it is an idea for a new product or service, the business equivalent is market research. Inventors will establish laboratory experiments, designers will begin engineering new product ideas, and marketers will study consumer- buying habits. Any individual with an idea will think about it, concentrating his or her energies on rational extensions of the idea and how it might become a reality. In rare cases, the preparation stage will generate results. More often conscious deliberation will only overload the mind, but the effort is important in order to gather information and knowledge vital to an eventual solution.

Incubation

 Individuals sometimes concentrate intensely on an idea, but, more often, they simply allow ideas time to grow without intentional effort. We all have heard about the brilliant, sudden "flashes" of genius--or more precisely, we have developed fables about them--but few great ideas come from thunderbolts of insight Most evolve in the minds of creative people while they go about other activities. The idea, once seeded and given substance through preparation, is put on a back burner the subconscious mind is allowed time to assimilate information.

Incubation is a stage of mulling it over while the subconscious intellect assumes control of the creative process. This is a crucial aspect of creativity because when we consciously focus on a problem, we behave rationally to attempt to find systematic resolutions. When we rely on subconscious processes, our minds are untrammeled by the limitations of human logic. The subconscious mind is allowed to wander and to pursue fantasies and it is therefore open to unusual information and knowledge that we cannot assimilate in a conscious state. This subconscious process has been called the art of synectics (W.J.J. Gordon (1961). Synectics, derived from Greek, means a joining together of different and often unrelated ideas. Therefore, when a person has consciously worked to resolve a problem without success, allowing it to incubate in the subconscious will often lead to a resolution.

Illumination

The fourth stage Illumination occurs when the idea resurfaces as a realistic creation. There will be a moment in time when the individual can say. "Oh, I see!" BelI heard the twang of the steel reed. Fleming watched his penicillin attack infectious bacteria under a microscope, and Art Fry envisioned his gum-lined note pads in use. The fable of the thunderbolt is captured in this moment of illumination -even though the often long and frustrating years of preparation and incubation have been forgotten.

Illumination may be triggered by an opportune incident as Bell discovered harmonic telegraphy in the accidental twang created by Watson. But there is little doubt that Bell would have had his moment of illumination triggered perhaps by another incident or simply manifested through hard work. The point, of course, is that he was prepared and the idea was incubated. Bell was ready for an opportune incident and able to recognize its importance when it occurred.

The important point is that most creative people go through many cycles of preparation and incubation searching for that incident as a catalyst to give their idea full meaning. When a cycle of creative behavior does not result in a catalytic event the cycle is repeated until the idea blossoms or dies. This stage is critical for entrepreneurs because ideas by themselves have little meaning. Reaching the illumination stage separates daydreamers and tinkerers from creative people who find a way to transmute value.

Verification 

An idea once illuminated in the mind of an individual still has little meaning until verified as realistic and useful. BelI understood what the twanging steel reed means, yet he still had years of work ahead to translate this knowledge into a commercial telephone system.

Entrepreneurial effort is essential to translate an illuminated idea into a verified realistic and useful application. Verification is the development stage of refining knowledge into application. This is often tedious and requires perseverance by an individual committed to finding a way to "harvest" the practical results of his or her creation. During this stage many ideas fall by the wayside as they prove to be impossible or to have little value. More-often, a good idea has already been developed or the aspiring entrepreneur finds that competitors already exists Inventors quite often come to this harsh conclusion when they seek to patent their products only to discover similar inventions registered.

Walter Kuemmerle (2002) identified characteristics of successful entrepreneurs apart from enabling them to start ventures against all odds and keep them alive even in the worst of times. Real entrepreneurship is a far cry from managing an established business and farther still from the sanitized model that became popular during the late 1990s. His research has uncovered intriguing similarities in ways that successful entrepreneurs behave, similarities that hold true no matter the country or industry involved. Winning entrepreneurs feel comfortable skirting the boundaries of propriety. They are passionate enough about their ideas to assume enormous personal risks - powerful enemies, bankruptcy, even jail - to realize their dreams. However grand their visions, they are ready to start small and patiently scrabble in the mud for any deal they can swing. Profoundly opportunistic, they will do whatever it takes to win the confidence of their customers and investors, knowing that simply staying in business is the only thing that matters. As a result of his research, he has distilled his findings into five straightforward questions as a kind of litmus test for the potential entrepreneur
All businesspeople have to be a little devious at times-it goes with the territory. But entrepreneurs are different. They're not just willing to bend the rules; they revel in it. In fact, most start-up success stories contain at least one episode of an audacious entrepreneur using some outrageous tactic to swing a crucial deal or find the resources to get an idea off the drawing board.

In general, smart entrepreneurs prefer to go after market niches that incumbents have overlooked. But they are not afraid to make powerful enemies. In fact, they often enjoy playing the under- dog because, unlike many people, they don't crave approval. The size of their rivals doesn't bother them much either, and a number of smart entrepreneurs win by finding cunning ways to use their enemies' own strengths against them.

Although many aspects of entrepreneurship favor the young, patience does not. Here, more seasoned business- people have the edge. The impatience and idealism of the young often lead them astray, pushing them to blindly adopt a get-big-fast philosophy - "going for scale;' as the dot commerce put it. This approach makes sense in certain contexts, especially for businesses like on-line recruitment sites, because their competitive advantage lies in the size of their networks. But it does not work for most start-ups. Among the unsuccessful ventures, many simply burned up their capital by trying to expand too soon. Entrepreneurs should be greedy, but they need to be patient as well.

Many would-be entrepreneurs place their strategies on a pedestal. Once they have the plan on paper, they try not to stray from it. Sticking to their guns, sends out a positive signal to customers, investors, and employees. Changing the plan, on the other hand, undermines credibility. Sometimes this conviction runs so deep that entrepreneurs appear more interested in pursuing the original strategy than in keeping their business afloat. The harder it has been for a company to work out its strategy, the more trouble it has abandoning it. A group of entrepreneurs who had developed a touch-free, sensor-based technology that enabled the precise locating of objects in a three-dimensional space. After much debate, the group decided to customize the technology for two markets: electric motors and handheld devices. Because the founders decided to focus exclusively on those two applications - and were unwilling to abandon that strategy - they missed out on a $100 million market opportunity to bundle their technology with other companies' products. As a result of that strategic blunder, investors lost confidence in the entrepreneurs, who were forced to sell the business to a hardware manufacturer.

By contrast, smart entrepreneurs- and savvy investors - recognize that a new venture gains credibility more by simply surviving than by doggedly following its original strategy. They are quick to recognize when they have to change course, and they seldom hesitate to do so. Indeed, they often take pride in their ability to turn on a dime, painting their twists and turns in the rosiest of colors.
Successful entrepreneurs know how to seal deals. They possess an almost un- canny ability to come in, often at the last moment, and elbow their rivals aside. However tough the market or small the transaction, they know exactly what they must give up-and what they can get away with - while finalizing deals under pressure.

N.R. Narayana Murthy, the man who founded the Indian software company Infosys Technologies in 1981, was nothing if not a innovator. His company had to break into international software markets because the local one was virtually nonexistent. To succeed, Infosys needed to build a track record, which meant closing deals quickly. Murthy took charge of sales, landing Infosys's first contract with a U.S. company - a six-year deal to upgrade the computer system at a large, New York- based textile Distribution Company. The upgrade - from a 16-bit processor to a 32-bit one - was quite involved, requiring that much software be rewritten. Over the next 20 years, Murthy spent little time at home. In 1990, he lived in France for three months, closing just one deal. His efforts paid off. Today Infosys is a serious contender in the customized software market in the United States and Europe, with $400 million in revenues and a market capitalization of around $8 billion.

Being a closer involves more than a willingness to go the distance in negotiating deals. Entrepreneurs have to be comfortable repeatedly making life-or-death decisions in the dark. Most executives- turned-entrepreneurs don't realize how big the gap is between making decisions in established corporations and making them in start-ups. And that's one of the main reasons many first-rate executives find it hard to adjust to the entrepreneur's world. Not only are decisions in a start-up more important - even small errors can kill the business - but they are of an entirely different nature
In a corporation, managers are usually making the same sorts of decisions every day and are surrounded by other people making similar choices. While corporate managers obviously have to operate with a degree of uncertainty - they may not have all the information required-the environment is familiar, and that fosters self-confidence. In a start-up, however, managers don't have those comfort layers. If they can't trust their gut, they'll freeze.

Real entrepreneurs know that using their time to gather extensive information is a luxury they sometimes cannot afford. They are more concerned that a decision be made than that it be the best possible choice. One entrepreneur estimated that he had had to make around 150 key decisions before he was ready to do business - from naming his company to hiring his first employee. If he hadn't been able to trust himself to make those decisions quickly, he might have never launched the company.
If one is not a natural-born entrepreneur, the worst thing one can do is to simply dive into one’s first venture rather, one should work a few years for fast-growing company, ideally in the same industry in which one wants to start one’s business. It's a fairly risk-free way to get exposure to entrepreneurial life, and with some close encounters already behind oneself, one feel more comfortable with the risks, twists, and turns of managing your own business.

Also an entrepreneur might look for a mentor- perhaps someone from the fast-growing company where one learned the ropes- who can help you identify which entrepreneurial traits one most need to develop. The successful entrepreneurs are usually happy to act as mentors; they see it as a way of giving back. He advises not to take all one’s mentor's advice at face value. As one becomes more successful as an entrepreneur, his mentor may begin to feel threatened and may even seek to undermine his confidence. It is found that entrepreneurs have sizable egos. Few people are all-round entrepreneurs, gifted with every necessary trait. The partner should be an equal- a co-founder; an early-stage venture capitalist; or an older, experienced corporate executive hired to fill a senior position such as CFO. Sometimes the partner will act as a brake by bringing grand visions down to reality or by reminding you of the limits of the law. At other times, though, it can be the partner who pushes one to close the deal or to challenge the assumptions.

Being an entrepreneur isn't for every one, and even those who have the right stuff find the path to success much rougher and, usually, much longer than they had anticipated. But if one start one’s journey with a clear sense of one’s own capabilities and the gaps in them, one will be much more likely to succeed in his venture.

Some experts are of the view that entrepreneurs do not emerge spontaneously of their own. While the other factors of production are at least, in principle, hirable but enterprise is not. They have to come from different vocations. Even the educational system in most of the developing countries is designed in such a way so as to develop more of job-creators. In many countries, entrepreneurs appear to have been motivated by a combination and interaction of the following factors of environment.

Thus it can be said that entrepreneurship is not influenced by a single factor but is the outcome of the interaction and combination of various environmental factors. It is the "desire to make money" that drives one to start an industry rather than the amount of money one owns. Encouraging government policy and social recognition influences a person to become an entrepreneur.  Entrepreneurship has developed with civilization. Man discovered the skills and tools of entrepreneurship. In advanced countries (civilizations) entrepreneurship became a fine art. In recent years, entrepreneurship has also evolved as a science of management and a catalytic tool of economic growth and development. The entrepreneurial culture is built upon the pursuit of self- interest and towards this end everything must be engineered to perfection.

             Entrepreneurship is a multi-dimensional concept and it is necessary to consider many factors and perspectives. The distinctive features of entrepreneurship are summarized below:

Innovation

 To Schumpeter entrepreneurship is a creative activity. An entrepreneur is basically an innovator who introduces something new into the economy. The innovation may be a method or production not yet applied in the particular branch of manufacturing, or a product with which consumers arc not yet familiar or a new source or raw material or a new market hitherto unexploited or a new combination or means of production. An entrepreneur foresees the potentially profitable opportunity and tries to exploit it. Innovation involves problem solving and the entrepreneur is a problem solver.

A Function of High Achievement

  McClelland identified two characteristics of entrepreneurship, namely doing things in a new and better way and decision-making under uncertainty. He stressed the need for achievement or achievement orientation as the most directly relevant factor for explaining economic behavior. This motive is defined as the tendency to strive for success. The situations involve an evaluation of one's performance in relation to some standard of excellence. People having high need for achievement are more likely to succeed as entrepreneurs. McClelland explains the entrepreneur's interest in profits in terms of a need for achievement. People with high achievement (n-ach) are not influenced by money rewards as compared to people with low achievement. They are prepared to work harder for money or such other external incentives. On the contrary, profit is merely a measure of success and competency for people with high achievement need.

Organization Building Function

Harbison's idea of entrepreneurship implies the skill to build an organization.  Organization building ability is then most critical skill required for industrial development. This skill means the ability to multiply oneself by effectively delegating responsibility to others. Unlike Schumpeter, Harbison's entrepreneur is not an, innovator but an organization builder who harnesses the new ideas of different innovators to the rest of the organization. Entrepreneurs need not necessarily be the men with ideas or men who try new combinations of resources but they may simply be good leaders and excellent administrators.

Achievement Motivation 

McClelland considers the need for achievement to be most critical to a nation's economic development. He held that a strong inner spirit in individuals to attain is a measurable variable arising from a need, which the individual develops mainly in childhood and seeks to satisfy throughout his life. This inner spirit which he called need for achievement (n-ach), if higher, would produce more energetic entrepreneurs capable of generating rapid economic development. High need for achievement or ambition motivates an entrepreneur to take risks, work hard, find new things, save more and reinvest the savings in industry and so on.

It is low level of aspirations or ambitions that explains the lack of enterprise in underdeveloped countries. Ambition is the lever of all motives. Ambitions motivate men, activate them, broaden their vision and make life meaningful. Ambition is an index of one's resourcefulness. The ambition builds up achievement pressure in the individual and provides the basis for McClelland's n- factor. The initiative and intentions of an individual are directed by his ambitions. It is the ambition that electrifies man's actions. Therefore, what matters may not merely be the people but their aspirations and the means to achieve the goals? Therefore, it is the duty of elders in the society and specially the teachers to build up ambition into the minds of the young people. However, ambitions differ from greed and windfall. Greed results in disaster and windfall makes one a speculator. Thus, ambitions nourish the achievement motivation and bring economic growth. The biggest obstacle to economic progress in countries like India is perhaps the limited ambition of people. The initiative of an individual is directed by his ambitions, which nourish the entrepreneurial spirit and bring about economic development. Hence what matters not merely the people and their talents but their aspirations? However, ambitions differ among individuals on the basis of the environment in which they are born and brought up.