Schumpeter (1934) describes this distinct feature of entrepreneurship that involves with innovating a product with which consumers are not yet familiar or a new source of raw materials or a new market either to unexplored or a new combination of means of production or a new way of operation not yet applied.
Thus, entrepreneurship foresees the potentially profitable opportunity and tries to exploit it in a new and better way.
Wilken (1979) summaries a list of innovative activities entrepreneurship does. They are shown below:
Initial expansion- Original production of goods.
Subsequent expansion- Subsequent change in the number of goods produced.
Factor innovation- Increase in supply or productivity of factors.
Financial- Procurement of capital from a new source or on the new farm.
Labor- Procurement of labor from a new source or of a new typo; upgrading existing labor.
Material- Procurement of old material from a new source or use of a new material.
Production innovations- Changes in the production process.
Technological- Use of new production technique
Organizational- Change of form or structure of relationships among people.
Market innovations- Changes in the size or composition of the market a Product.
Production of new good or change in quality or cost of existing good.
Market- Discovery of a new marker.
In principle, the Innovation is a collaborative process by which organizations discard the old idea or process and make significant advances in exploring new one. Innovative ideas come from several sources, including unreasonable demands or goals and time pressures. The method of creating innovation is to discover, create, and develop ideas, to refine them into useful forms, and to use them to earn profits, increase efficiency, and/or reduce costs. Here we focus on how to do that, the process of innovation. Schumpeter (1934) describes this distinct feature of entrepreneurship that involves with innovating a product with which consumers are not yet familiar or a new source of raw materials or a new market either to unexplored or a new combination of means of production or a new way of operation not yet applied. Basically the entrepreneurship are the capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit. Stronger the entrepreneurial traits will lead to greater innovation in taking the business forward in advance way.
My response is two-fold: (1) A graphic from and article I just found written by one of our RG colleagues about new Venture development which may shed some light on your question, and (2) A recommendation to juxtapose Schumpeter's "creative destruction" against E. F. Schumacher's "good work" and "small is beautiful" to expand our notion of what an innovation might be. See the attachments for the details ..:-). Thank you..
Yousif: I realize you do not have time to read the Schumacher attachments I sent and try to figure out what point I was trying to make ..so ..here is my short answer ..:-).
I do not believe that ALL innovations have to be bigger, faster, or more efficient. SOME innovations can be smaller, slower, and even less efficient. I do not believe that innovations MUST “destroy” previous products, services, or ways of working, neither do I believe that innovations MUST create totally new objects or processes. For me, the ONLY requirement that ALL innovations must meet is that they serve the needs and advance the values of the user/consumer more EFFECTIVELY. I believe that adopting that view frees us to be innovative when innovating innovations … :-). Thanks for your patience with me ..but do read Schumacher if you have not already done so. All the best to you. Jay
Dear Prof. Riyagh, although I tend to agree with most of what profs. Chaubey and Klagge mentioned, I'd have somethings to add.
1. Entrepreneurs are the human agents responsible for (re)combining resources (productive factors) in search for money profit (Foss & Klein, 2012). If you're discussing innovation you might not leave the 'human action' part out of it.
2. innovation is a type of action. Companies or Organizations are not capable of innovating, only people are. It is through human decisions and actions that companies 'express themselves'.
3. Prof. Klagge has a great point, Innovation is not only about disruption, it is about doing the job that the consumer wants to do in a better way in the view of the consumer itself.
4. Schumpeter's take can be misleading. He suggests that (big) companies would innovate constantly as if it were an automatic process, which is clearly untrue (see Fagerberg, 2006, p. 6 for a brief discussion on how the late Schumpeter saw Innovation).
5. to support those views you can also look at people that are working with AI and what they're saying about strategy, a similar argument can be putted forward to innovation (Wuebker, Saouma, & McGahan, 2018; Wuebker, 2018).
Thank you dear sir it is really beneficial and valuable information . regards
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