CHAPTER 4: CREATIVITY &

INNOVATION IN
ENTREPRENEURSHIP
Prepared & Lecture by :
Dr.Maliani Mohamad (5836)
• Discuss the main components of creative
process, ways to develop creativity & OBJECTIVES
methods to generate creativity.
• To identify barriers to creativity
• Discuss 4 types of innovation.
• Review some of the myths associated with
innovation & to explain 10 principles of
innovation.
• Define the concept of technopreneur &
technopreneurship.
• Discuss the prospects of science &
technology to entrepreneurs (biotech,
agrotech, ICT, automotive & aerospace)

Prepared & Lecture by : Dr.Maliani Mohamad (5

YOUTUBE VIDEOS
◦ (1) 50 Cool Inventions and Ideas - Amazing Inventions 2017
◦ (1) Future Food | The Menu of 2030 - YouTube- YouTube
◦ (1) Ethiopia has an innovative power plant that turns waste to energy | Ways to Change the World - YouT
ube
INTRODUCTION
◦ To be in business & to manage a business successfully,
entrepreneurs must be creative & innovative.
◦ In today's hyper-competitive business world the need to be creative
& innovative is very important. The more creative & innovative an
entrepreneur is, the better (more competitive)
◦ The ability to be creative & innovative will place an entrepreneur a
step ahead of his competitors.

Prepared & Lecture by : Dr.Maliani

Mohamad (5836)
Therefore, the ability to be creative & innovative is a key to the survival of a
business.

Example:
An entrepreneur will be left behind if his competitors are ahead of him in
applying creative & innovative methods of operation

if competitors are more effective, efficient & more productive

the competitors are able to produce better & higher quality products which
enable to attract more customers.

Prepared & Lecture by : Dr.Maliani

DEFINITION OF CREATIVITY

• Creativity is the generation of ideas that result in the improved

efficiency or effectiveness of a system (Kuratko & Hodgetts 2005)
• Efficient means better usage of resources such as materials, time,
space, money so that the cost will be minimized, therefore you get
greater output with the same input.
• Effective means you are able to achieve your aim/objective.

Prepared & Lecture by : Dr.Maliani

 CREATIVITY
There are two important aspects of creativity: Process & People.
• Process is designed to attain a solution to a problem.
• People are the resources that determine the solution.

Usually, the process remains the same, but the approach people use will vary.
For example: sometimes people adapt/follow an old solution , and at other
times people will formulate a new & highly innovative solution to a problem.

Prepared & Lecture by : Dr.Maliani

 CREATIVITY
PROCESS
Ideas are not produced spontaneously, most of the time an idea is produced/developed
through a “Creative Process” (Kuratko & Hodgetts 2005)

Phase 1: Background or Knowledge Accumulation

Phase 2: The Incubation Process

Phase 3: The Idea Experience

Phase 4: Evaluation and Implementation

Prepared & Lecture by : Dr.Maliani

 PHASE 1: ACCUMULATION OF
KNOWLEDGE OR
BACKGROUND
Creative process started by gathering information! Research, investigation & extensive reading, conversations with others, attending
meeting, workshops & general absorption of information relative to the problem or issue at hand.
However, additional investigation in both related and unrelated issue is sometimes useful.

Several methods to gain knowledge/information:

• Read in variety of fields

• Join professional groups & associations

• Attend professional meetings & seminars

• Travel to new places

• Talk to anyone and everyone about your subject

• Scan magazines, newspapers and journals for articles related to the subject

• Develop a subject library for future reference

• Carry small notebook and record useful information and etc

Prepared & Lecture by : Dr.Maliani

 Phase 2: Incubation Process
• Entrepreneurs do not engaged directly in the activities that has the connection
with the subject/problem in phase
• At this phase, entrepreneurs allow their subconscious mind to mull over the
tremendous amounts of information they gather during phase
• Getting away from the problem & letting the subconscious mind to work on
allows creativity to trigger.
• Some of the most helpful steps to induce incubation:
• Engage in routine ‘mindless’ activities (ex:cutting grass, painting, exercise,
cooking, fishing, relaxing, sleeping etc.)

Prepared & Lecture by : Dr.Maliani

 PHASE 3-THE IDEA
EXPERIENCE
Most exciting phase. At this phase the idea which individual is seeking is
discovered. Sometimes referred as ‘eureka factor’
This idea might be discovered suddenly, while the person is busy doing something
unrelated to the problem (taking a shower, driving or walking).
However, idea that emerged during this phase is still considered to be “raw idea”
that needs to go to the next phase.
What is EUREKA? IN THE EUREKA FACTOR, JOHN KOUNIOS AND MARK BEEMAN
EXPLAINED EUREKA---
THE COGNITIVE NEUROSCIENTISTS WHO DISCOVERED HOW
THE BRAIN HAS AHA MOMENTS—SUDDEN CREATIVE INSIGHTS
—EXPLAIN HOW THEY HAPPEN, WHEN WE NEED THEM, AND
HOW WE CAN HAVE MORE OF THEM TO ENRICH OUR LIVES
AND EMPOWER PERSONAL AND PROFESSIONAL SUCCESS.
how insights arise and what the scientific research says about stimulating
more of them. they discuss how various conditions affect the likelihood of
your having an insight, when insight is helpful and when deliberate
methodical thought is better suited to a task, what the relationship is
between insight and intuition, and how the brain’s right hemisphere
contributes to creative thought. 

Prepared & Lecture by : Dr.Maliani

 Phase 4-Evaluation &
Implementation
Most difficult phase & requires a great deal of courage, self-
discipline and perseverance.
Usually idea produced from Phase 3 is in rough form, it needs to
be modified, evaluated or tested to put it in final shape.
Entrepreneurs will fail several times before they successfully
develop their best ideas.

Prepared & Lecture by : Dr.Maliani

 Methods to generate
creative ideas
1) FOCUS GROUP
2) BRAINSTORMING
3) PROBLEM INVENTORY ANALYSIS

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 1. FOCUS GROUP
• Being used since 1950s.
• Focus Group is made up of between 8-14 people, experts of different
background of different knowledge & skills is grouped together to discuss
& find solution to a certain problem).
• Moderator is needed to guide & focus the discussion by asking simple &
provoking questions related to the problems or topic of interest.
• Provoking questions by the moderator will generate more ideas & feedback
from the group. Everyone will give their comments & opinions.
• Finally only the best idea will be recommended for implementation.

Prepared & Lecture by : Dr.Maliani

 2.Brainstorming
• The popular technique- A group method for obtaining new ideas & solutions
• Usually useful for generating ideas related to products or markets.
• The brainstorming method is conducted in a conducive way, enjoyable and free
from pressure. However it must comply with 4 important rules;
• Criticism & negative comments are not allowed. –these will stop the flow of
ideas.
• Free flow of ideas are encouraged. – even funny/silly ideas!!
• Quantity of ideas is desired. The more the ideas the better.
• Combination of ideas are also encouraged.

Prepared & Lecture by : Dr.Maliani

 3.Problem Inventory Analysis
• A method for obtaining new ideas & solutions by focusing on
problems.
• Instead of generating new ideas themselves, the company usually
ask the customers to provide the feedbacks on problems of the
product.
• The customers are then asked to identify and discuss the problems
of the product.
• Through this method, new ideas to rectify or to solve the problems
of the product can be obtained easily.
• Problem Inventory Analysis can also be used to test a new product
idea.
 BARRIERS TO
CREATIVITY
• LATE TO REACT - nowadays everything is moving at a faster
pace. to be creative one must react & think fast. otherwise will be
left behind.
• RISK AVERSE – tend to take safe action/decision to minimize risk.
avoiding risk, too scared of failure/criticism are barriers to
creativity.
• STEREOTYPE thinking- i.e. not to have something that is different
from others, afraid of changes & stereotype inclination. according to
e.de bono (1970), human must change the way they think to increase
creativity. try something different!! new ways, new methods.
• JUDGING BY PERCEPTION/ASSUMPTION- don’t make
decision based on perception/assumptions. decision should be made
based on reality. however, good decision can be achieved

Prepared & Lecture by : Dr.Maliani

 The Creative Climate/environment
• A management that trusts their employees (not overcontrolling).
• Open channels of communication in organization.
• Open communication with outside the organisation
• Diversity of personalities
• A willingness to accept change
• Enjoy trying new ideas (experimenting)
• Fearless of mistakes or failures
• Rewards and promotion of employees based on their creativity
• Applying the techniques that encourage ideas, eg:suggestion system &
brainstorming
• Sufficient financial, managerial, human and time resources to accomplish goals.

Prepared & Lecture by : Dr.Maliani

SOURCE : GOOGLE
SOURCE : GOOGLE
SOURCE : GOOGLE
SOURCE : GOOGLE
 INNOVATION
• The process by which entrepreneurs convert opportunities into
marketable ideas.
• More than just a good idea.
• Innovation is a process of creation and implementing new idea
(Hellriegel, Jackson & Slocum, 2002)
• Innovation is the process by which entrepreneurs convert
opportunities into marketable ideas.
• Creativity becomes the pre-condition/pre-requisite to innovation.

Prepared & Lecture by : Dr.Maliani

 PROCESSES ASSOCIATED WITH THE
TWO BRAIN HEMISPHERES

Right Hemisphere
Left Hemisphere • Nonverbal
• Verbal • Synthesizing
• Analytical • Seeing Analogies
• Abstract • Non-rational
• Rational • Spatial (space, size, shape
of objects)
• Logical • Intuitive
• Linear • Imaginative

Prepared & Lecture by : Dr.Maliani

Can you see the
3 women?
 TYPES OF
I N N O VAT I O N
4 TYPES
INVENTION
-The creation of a new product, service or process which is novel and untried.
Ex:Wright Brothers-Airplane, Thomas Edison-lightbulb
EXTENSION (Pengembangan)
-The expansion of existing product, service or process. Such concepts make a
different application of a current idea.Ex: Mobilephone-Size, function, colour:
shampoo –Pantene new product with conditioner.
DUPLICATION (Penyalinan)
-The replication of an already existing product, service and process. The
duplication effort is not simply copying but adding the entrepreneur’s own
creative touch to enhance or improve the concept to beat the competition.
Existing product becomes the reference. Eg: Marrybrown
SYNTHESIS (Sintesis)
-The combination of existing concepts and factors into a new formulation. Taking
a numbers of ideas or items already invented and finding a way to form a new
application. Eg:Internet (computer & telecomunication system)

Prepared & Lecture by : Dr.Maliani

 Sources of Innovation

Unexpected
Incogruities
occurences

Industry
Process Needs
and
Market
changes

Perception Knowledge-
Based
Changes Concepts

Prepared & Lecture by : Dr.Maliani

 DEMOGRAPHIC CHANGES
• Changes in population, age, education
levels, types of occupations, geographic
locations, etc.
• Demographic shifts are important & provide
entrepreneurial opportunities to the
entrepreneurs.
• Eg: Demographic changes become a source
of innovation to entrepreneurs. Nurseries for
children, private colleges, tuition centres,
Health & Care centers for older people, etc.
Prepared & Lecture by : Dr.Maliani
UNEXPECTED OCCURRENCES

• The unexpected, unanticipated or unplanned event. Might

end up to be a major innovative surprise to the firm or
entrepreneurs.
• Innovation may arise when something good happens
without prior planning (unexpected).
• Happens when you give attention to something else but
other ideas may emerge that can also be beneficial.
• Originally computer was invented to make the process of
documentation, database & to make calculation easier,
but later it becomes tool for office management,
entertainment & communication.
The History of Computing - YouTube

Prepared & Lecture by : Dr.Maliani

 PROCESS NEEDS
• Process needs exist whenever a demand arises for entrepreneurs to
innovate & answer a particular need.
• Eg; the process of taking good care of our health leads to: the creation of
health food, sugar-free drinks, supplementary foods, minerals &
vitamins, etc.

Prepared & Lecture by : Dr.Maliani

INDUSTRY & MARKET CHANGES
• Innovation due to changes in consumer behaviors or attitudes,
advancements in technology, industry growth.
• Industries & markets are always undergoing changes
• Eg: strong market demand for organic foods, demand for compact &
economical car, etc.

Prepared & Lecture by : Dr.Maliani

 KNOWLEDGE-BASED CONCEPTS
• Invention & innovation based on knowledge (R&D)
• Inventions are considered as knowledge-based; producing product based
on new ideas, new way of thinking, new methods and new knowledge.
R&D requires long period of time to materialize, need to test & modify,
making improvement & re-test.
• Usually done by experts in certain disciplines.
• Ex: robotic usage in manufacturing, hybrid cars, bio-fuel etc.

Prepared & Lecture by : Dr.Maliani

 Incongruities.
• Occur whenever a gap exists between expectations & reality.
• Eg: Mail delivery at night was at first thought to be not suitable for express-
mail business, but FedEx want something innovative. They tried overnight
mail delivery (deliver mails 24 hours – day & night). This innovation turned
out to be a profitable business. So don’t be afraid to do something
different!!.

Prepared & Lecture by : Dr.Maliani

 Perceptual Changes

• Changes occur in people’s interpretation of facts & concepts. Perceptions can

cause major changes in market demand, thus generate ideas for innovation.
• Eg: Perception about obesity can lead to health problems offer opportunities to
entrepreneurs. This perception creates high demand for health
equipment/facilities & fitness classes (gyms). - ‘fitness craze’ phenomena.

Prepared & Lecture by : Dr.Maliani

 5 Major Innovation Myths

• Myth 1: Innovation is planned & expected

• This myth is based on the old concept that innovation should be left to
the R&D Dept. In reality, innovation is unpredictable & anyone can come
out with innovative ideas.
• Myth 2: Technical specifications should be thoroughly prepared
• Thorough preparation often takes too long. Quite often it is more
important to use a try/test/revise approach.
• Myth 3: Creativity relies on dreams & blue-sky ideas
• Innovators are very practical people, not day dreamers. They convert
ideas into realities.
• Myth 4: Big projects will develop better innovations than smaller
ones.
• This myth has been proven false. Larger firms are now encouraging
their people to work in smaller groups, easier to generate creative ideas.

Prepared & Lecture by : Dr.Maliani

 5 Major Innovation Myths
• Myth 5: Technology is the driving force of innovation & success.
• Technology is certainly one source of innovation but customers &
market also are the driving force behind any innovation. In fact, market-
driven or customer-based innovations have the highest probability of
success.

Prepared & Lecture by : Dr.Maliani

 Principles of innovation

1. Be action oriented.
Innovators must be active & always searching for ideas, opportunities or sources of innovation.
2. Make the product, process or service simple & understandable.
People must easily u/stand how the innovation works.
3. Make the product, process or service customer-based.
Entrepreneurs must keep customers in mind. The more user-based the product, the more it will
be accepted.
4. Start small.
Innovators should attempt to do small scale projects. Incrementally tries to proceed with big
project in the future.
5. Aim high.
Innovators should aim high for success & seek niche in the m/place.
Prepared & Lecture by : Dr.Maliani
Principles of innovation
6. Try/test/revise.
Always follow the rule of try, test & revise. This will help work out any
flaws/defects in the product, process & service.
7. Learn from failures.
Innovation does not guarantee success. Failures often give rise to
innovations.
8. Follow a milestone schedule.
Follow schedule that indicates milestone accomplishments. Although a bit
ahead or behind schedule, it is still important to have a schedule in order to
plan & evaluate the project.
9. Reward heroic activity.
This principle applies more to those involved in seeking & motivating
others to innovate. Innovative activity should be rewarded & given proper
amount of respect. Management must tolerate & accept failures in carrying
out an innovation work. Innovative work must be seen as heroic activity.
10. Work, work, work.
It takes work, not genius or mystery to innovate successfully.
Prepared & Lecture by : Dr.Maliani
 CONCLUSION

 Entrepreneurs have to deal with these challenges to deal with the modern
economy
 Competition makes the entrepreneur more creative and innovative to
adapt quickly to market changes

Prepared & Lecture by : Dr.Maliani