Entrepreneurshıp (ENG) — Ünite 3 Soru-Cevap

Innovation is creating or adopting new ideas, products, services, programs, technology, policy, structure, or new administrative systems.

Today’s customers prefer new, unusual, aesthetic products or services. In such a competitive environment, companies can maintain their existence only if they are open to innovation and change. However, every new idea or change may not be considered innovative unless it is spread among users. Therefore, innovation is not only making new, updated, and different products but also producing new products and services that will create economic returns for the interests of the company. For new ideas, inventions and practices to be evaluated as innovation, they must be transformed into new products, services, and be commercialized.

The individual determinants of innovation are intelligence, personality, motivation, knowledge, strong communication, emotional intelligence.

The organizational and environmental determinants of innovation are specialization, professionalism, technical information resources, administrative intensity, managerial tenure, de-centralization, external and internal communication.

The factors that may impede innovation activities include high costs and lack of demand (economic factors), lack of skilled personnel and lack of information (enterprise factors), regulations and taxes (legal factors).

Although innovation, invention, creativity and R&D are related concepts, they are not the same. Invention is the creation of a tool, device, method that did not exist before while creativity is to bring a pattern or an idea into existence. R&D (Research and Development) is the production of new information with research practices. For an invention to be an innovation it has to have the potential to generate social and commercial benefits. To generate commercial value, an organization develops creative ideas and turn these ideas through R&D into original, useful commercial products, services and business models. Thus, innovation is a process of taking an invention or a creative idea and turning into something that is approved by and produced for a wide range of consumers.

Entrepreneurship is presenting a new product or improving the same product based on consumer needs. In today’s competitive market, new ideas and new projects are needed to gain an edge over their competitors and penetrate in the market and make more profit and it is entrepreneurs who turn these ideas and projects into innovation.

There are different classifications of innovation types, however in this book, the types of innovation are classified based on conceptual relatedness. Thus, innovation types are divided under two main headings; area of application and the level of knowledge it requires.

Product innovation is defined as innovations that occur in the products by making use of new information or technologies or by improving significantly existing information or technologies. Scotch Brite Microfiber kitchen cloth can be given as an example to product innovation. Scotch Brite Microfiber kitchen cloth has been improved by the use of advanced textile technologies to be more absorbent, washed at higher temperatures and dries more quickly than its competitors.

Service innovation is defined as developing a new and different service or improving already existing service to provide a new way of service. Hospitals offering medical test results online are an example of a service innovation so that patients do not have to go to the hospital to get their test results.

Process innovation is defined as the application of a new or considerably improved production, service supply or product delivery methods. This should result in a new or significantly improved products (goods or services), or increase in the quality of the products, or a decrease in the cost of production. Introduction of a GPS tracking device for transportation systems is an example of a process innovation.

Product and process innovation usually co-occur. The reason for this co-occurrence is that while product innovation refers to the development of a new product, process innovation refers to the development of a process that would allow the production of this product at an acceptable price. An example of a robot can be given to distinguish product and process innovation. Production of a robot to be used in the industry is an example of a production innovation while the use of robots in the production process is an example of process innovation.

There are four types of innovation in terms of the level of knowledge used in the innovation process. These innovation types can be represented on a continuum with radical innovation at one end and incremental innovation on the other end with modular and architectural innovation in between.

Radical innovations are creation of revolutionary new ideas or technology. Therefore, they require substantial changes. They are high-risk innovations with uncertainty and high returns. Incremental innovations, on the other hand, refer to the development or restructuring of an existing product or technology.

Incremental and radical innovations go hand in hand. Although innovations involve incremental and lengthy processes, they can sometimes emerge radically. While incremental innovation serves the existing activities of the business, radical innovation creates new areas where the business can operate in the future. Businesses’ survival is possible by using their existing resources effectively and discovering new opportunities for future resources. In other words, incremental innovation is vital in maintaining the competitiveness of businesses; radical innovation is important for the long-term success of companies.

In modular innovation, the aim is to develop the product by adding new components without touching the system, technology, or structure existing in the product.

Architectural innovation is changing the overall design of the system or creating a new product by improving the interaction of the components of a system. An example of architectural innovation is Walkman developed by Sony. All the components and techniques used in this product had been used and tested in different products. Re-assembling all these components as a portable music listening product is an example of an architectural innovation.

No. Innovation, developed according to the field of application or level of knowledge used, does not guarantee that customers will adopt this innovation. Companies and organizations should identify potential reasons that may prevent the types of innovation they develop from being successful.

The process from the first time an individual hears about an innovation to adopting it is called the adoption process of innovation. The five stages of adoption are awareness, interest, evaluation, trial and finally adoption (see Fig. 3.1).

The factors which play an essential role in the spread of innovation, are relative advantage, observability, trialability, compatibility and complexity.

Innovation strategy means setting the rules and principles regarding the implementation of innovative applications. Developing innovation strategies is vital for businesses because these strategies guide organizations’ overall business strategy and play an essential role in achieving strategic goals.

The innovation strategies of businesses are offensive, defensive, imitative, dependent, traditional, and opportunist strategies.