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OBJECTIVES:1. Explain the process of creativity.2. Describe how innovation is important as a dimension of entrepreneurship.3. Identify major changes that create opportunities for entrepreneurs.4. Explain the concepts of windows and corridors for new ventures.5. Discuss popular myths of entrepreneurship and why they are more fantasy

than fact.6. Describe the main factors that lead to success for new ventures.CREATIVITY AS A PREREQUISITE TO INNOVATIONThe terms creativity and innovation are often used to mean the same thing, but

each has a unique connotation. Creativity is the ability to bring somethingnew into existence. This definition 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 necessarily takethe necessary action to make it reality. Innovation is the process of doingnew things. This distinction is important. Ideas have little value until they areconverted into new products, services, or processes. Innovation, therefore, isthe transformation of creative ideas into useful applications, but creativity is aprerequisite to innovation.

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Ideagermination: Theseeding stage of a

new ideaRecognition

Preparation:Conscioussearch for knowledge

Rationalization

Incubation:Subconsciousassimilation of

informationFantasizing

Illumination:Recognition of idea

as beingfeasible

Realization

Verification: Application or test

to prove idea hasvalue

Validation

The Creative Process

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InventionThe creation of something new

Results inNew knowledge

InventionThe Transformation of an idea or resources

into useful applications

Results in newProducts, services

Or processes

Invention versus Innovation

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Analyticalplanning

Organizingresources Implementation

Commercialapplication

to identify:Product designMarket strategyFinancial need

to obtain:MaterialsTechnologyHuman resourcesCapital

to accomplish:OrganizationProduct designManufacturingServices

to provide:Value to customersRewards for employeesRevenues for investorsSatisfaction for founders

Translation of creative idea into a useful application

Elements in the Innovation Process

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L eft-Brain, Right-Brain Attributes

L eft Hemisphere Right Hemisphere

ConsciousAware and focused UnconsciousUnaware and unfocusedon specific problem on specific issues

RationalConscious modeling NonrationalSpacial imagining withof issues; linearity out direction

AnalyticalUse of knowledge IntuitiveTotal experiences and emo-in descrete applications to tions allowed to influence ones ideaevaluate issues

LogicalDeductive reasoning to SynthesizingIllogical reasoning andestablish relationship fantasizing to create analogies

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Creativesource Champion Sponsor

Inventor or originator who creates somethingnew through personalvision and effort

Entrepreneur or mana-ger who pursues theidea, providing leader-ship for applications

Person or organizationthat backs innovationwith finances, advice,and contacts

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Exhibit 2-2 Entrepreneurial Network RelationshipB usiness Relationships

Formal and informal liaisons with suppliers and wholesalers.Contracts or informal relationships with subcontractors.Existing contacts with potential customers or clients.Potential contacts with clients or customers through networks

established in prior employment.

Collegial relationships related to career specialty or through newmembership in professional or trade societies.

Professional RelationshipsFormal or informal relationship with bankers, security analysts, savings

and loan managers, and investment fund managers.Formal or informal liaisons with insurance companies, venture

capitalists, or private investors.Existing contacts with attorneys, public accountants, consulting

organizations, import/export brokers, and realtors.

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Organizational RelationshipsRelationships with previous employers and universities.

Formal ties with corporations through new venture units.Formal or informal ties with government agencies, state agencies, and

local political organizations.Social Relationships

Membership in local, state, or national professional assoc iations.

Membership in or attendance at trade and professional conferences.Relationships established through local or regional social clubs,

community organizations, athletic clubs, and social events.Other Relationships

Family relationships and friend networks through family ties.Ethnic, cultural, and religious affiliations.Fraternal organizations, trade groups, or union membership.