What is Entrepreneurship & Innovation
Dr Knut Lange
Director, Master of Science in Entrepreneurship & Innovation
Royal Holloway, University of London
What exactly does entrepreneurship & innovation mean?
Entrepreneurship is about identifying and exploiting opportunities, assembling resources, and creating or expanding ventures. Entrepreneurship refers to value creation in the private and public sectors. Entrepreneurs are often portrayed as heroic individuals, but the reality is that virtually all successful entrepreneurs work in teams and are involved in networks.
Innovation and invention are not the same. Innovation is the product of invention and commercialisation. The most important challenge regarding innovation is to make new ideas work commercially, or in the case of non-profit organisations, to successfully implement new ideas so that they create value.
Both entrepreneurship and innovation do not only influence, but are also shaped by different contexts, such as the institutional, industry, technological, temporal and geographic contexts. Entrepreneurs and innovators need to be aware of that. Furthermore, entrepreneurship and innovation are interrelated and complementary, and help organisations create and sustain a competitive advantage. To conclude with a quote from Tidd & Bessant (2011), “Innovation matters – but it doesn’t happen automatically. It is driven by entrepreneurship, a potent mixture of vision, passion, energy, enthusiasm, insight, judgement and plain hard work which enables good ideas to become a reality”.
In today’s dynamic and competitive business environment, what are the demands required of a successful leader of the future?
Future leaders must have the courage to enter new business fields, exit industries, develop new types of products, and implement organisational innovations. To achieve this, they must develop an entrepreneurial and innovative mindset, fostering a culture that tolerates risk and unconventional ideas. Leaders should know that breaking new ground is never easy and usually triggers a certain degree of resistance. Hence, the key to successful radical innovation is to form alliances and convince stakeholders (e.g. employees, trade unions, investors, suppliers, etc.) to embrace change and risk.
Can entrepreneurship be learned in a classroom?
This question is related to a more fundamental question: can entrepreneurship be taught at all. Are entrepreneurs born or made? Most scholars now agree that it is possible to acquire the knowledge and skills required to be a successful entrepreneur. Many great entrepreneurs did not succeed with their first company (e.g. Bill Gates), but became very successful with their second or third company. These examples show that relevant skills can be acquired over time. Furthermore, entrepreneurship education equips students with entrepreneurial tools which they can apply for their practical assignments. If students are guided by passionate and knowledgeable tutors in this process, entrepreneurship can definitely be learned in a classroom.
Finally, we should not forget a major advantage of classroom teaching, which is that it enables students to interact with like-minded peers and entrepreneurship scholars. This helps students develop their networks, and networks are an invaluable asset for future business leaders.
Can someone working for an organisation be truly entrepreneurial and innovative? Or is that only a concept for individuals who are running their own businesses?
Entrepreneurship is not confined to business start-ups. Entrepreneurship is about a mindset and a skill set. It is about being creative and bringing bold new products to the market. Hence, entrepreneurship can exist anywhere. Think of large global corporations such as Apple, Samsung, Sony and Amazon. These companies continuously develop innovations that transform industries, and identify and exploit growth opportunities in new market segments. It is true that large companies tend to be more risk-averse and bureaucratic than startup companies, and they are more affected by legacy effects. However, there are many corporations that are aware of these potential limitations and have adopted organisational structures to overcome this, such as corporate venture capital funds, corporate accelerators and decentralised structures enabling employees to act with a high degree of autonomy, to name just a few. And don’t forget, large corporations also have advantages over start-ups. If corporations succeed in leveraging their in-depth expertise in different areas, this can lead to transformative innovations.
Contributed by Kaplan