Innovation and Entrepreneurship Kindle  Innovation

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  1. Herve Herve says:

    Far from my previous post about Perkins Peter Drucker’s book Innovation and Entrepreneurship was a paradoxical reading The first chapters were painful even if brilliant I understood there that innovation is a process which will be successful if carefully planned and managed Fortunately chapter 9 completely changed my perception when the author dealt with knowledge based innovation which includes innovations based on science and technology So let me summarize the main points of this chapter1 the characteristics of knowledge based innovationa the time span between the emergence of the technology and its application is long 20 to 30 yearsb it is a convergence of several knowledge and until all the needed ones are available this innovation can not succeed2 the reuirementsa a careful analysis of the reuired factors ie the available knowledge and the missing onesb a clear focus on the strategic position ie you have to be right the first time or others will take your placec learn and practice entrepreneurial management because most tech innovators lack management skills 3 the risksa first even after a careful analysis knowledge based innovation remain unpredictable and turbulent see also Moore’s books about the chasm and the tornado and this is linked to its characteristics above; this has two important implicationi time plays against innovatorsii survival rate is lowb there is a limited window where new ventures start and when it closes there is a general shakeout where few survive; who survives is also unpredictable The only chance of surviving is to have a strong management and resources and luck;c there is also a receptivity gamble Even market research does not work with these innovations and the reason why an innovation is accepted or not is also unpredictableI have to admit this confirms an intuition I had since my VC years you have to make a bet and then work hard But there is no way you can really plan the success of knowledge based innovationsThe end of the book is uite good in particular its conclusion “The first priority in talking about public policies is to define what will not work Planning is actually incompatible with an entrepreneurial society and economy Innovation has to be decentralized ad hoc autonomous specific It had better start small tentative flexible It is popular today 1983 especially in Europe to believe that a country can have “high tech entrepreneurship” by itself But it is a delusion In fact a policy which promotes high tech and high tech alone will not even produce high tech All it can come with is another expensive flop another Concorde The French are right economic and political strength reuires high tech but there must be an economy full of innovators with vision and entrepreneurial values with access to venture capital and full of economic vigour”

  2. Jurgen Appelo Jurgen Appelo says:

    Amazing read for entrepreneurs with countless examples of innovative ideas and strategies

  3. David Garza David Garza says:

    Even though this book is relatively old its principles apply in every era Drucker presents innovation as an ageless art form in which all that changes is the approach Any business owner or out of the box thinker should definitely read this book

  4. Jacob McLaws Jacob McLaws says:

    I picked this up with the intent to read it and have it under my belt so I could say I've read it just because it is a classic I expected a lot of out of date references and antiuated principles of innovation I did find A LOT of out of date references to companies that are no longer the innovation powerhouses that they once were which just highlights the transient nature of being an innovation factory but the principles and practices seem as true as ever and I don't think it is too bold to say they are the roots of almost everything that has been written on innovation since Below are some highlights7 Sources for Innovative Opportunity1 The unexpected the unexpected success the unexpected failure the unexpected outside event;2 The incongruity between reality as it actually is and reality as is assumed to be or as it ought to be;3 Innovation based on process need;4 Changes in industry structure or market structure that catch everyone unawares;5 Demographics population changes;6 Changes in perception mood and meaning;7 New knowledge both scientific and nonscientificpg 35Innovation and this is a main thesis of this book is organized systematic rational work Intuition is not good enough it reuires a willingness to say I dont know enough to analyze but I shall find out I'll go out look around ask uestions and listenpg 50The incongruity within a process its rhythm or its logic is not a very subtle matter Users are always aware of it Every eye surgeon knew about the discomfort he felt when he had to cut eye muscle and talked about it What was lacking however was someone willing to listen somebody who took seriously what everybody proclaims That the purpose of a product or a service is to satisfy the customer If this axiom is accepted and acted upon using incongruity as an opportunity for innovation becomes fairly easy and highly effective There is however one serious limitation The incongruity is usually available only to people within a given industry or service It is not something that somebody from the outside is likely to spot to understand and hence is able to exploitpg 68The section starting on pg 85 that begins with Innovations that exploit changes in industry structure are particularly effective if the industry and its markets are dominated by one very large manufacturer or supplier or by a very few is essentially the gist of Clayton Christensen's book The Innovator's Dilemma written 12 years later For a good list of DO's on innovation start on pg 134Innovation is both conceptual and perceptual the imperative of innovation is therefore to go out and look to ask to listen This cannot be stressed too oftenpg 135An innovation to be effective has to be simple and it has to be focused It should do only one thing otherwise it confuses the greatest praise an innovation can receive is for people to say That is obvious Why didn't I think of itpg 135A successful innovation aims at leadership not necessarily at becoming a big business but if an innovation does not aim at leadership from the beginning it is unlikely to be innovative enough and therefore unlikely to be capable of establishing itselfpg 136Don'ts are simple1 Don't try to be clever2 Don't diversify don't splinter don't try to do too many things at once3 Don't try to innovate for the future Innovate for the presentpg 136When it comes to why big companies usually suck at innovation the crux is thisIt is not size that is an impediment to entrepreneurship and innovation; it is the existing operation itself The one thing that can be guaranteed in any kind of operation is the daily crisis The daily crisis cannot be postponed it has to be dealt with right away An the existing operation demands high priority and deserves it The new always looks so small so puny so unpromising next to the size and performance of maturity It thus takes special effort for the existing business to become entrepreneurial and innovativepg 148 149Entrepreneurial businesses treat entrepreneurship as a dutypg 150In order to make an existing business greedy for new things we need to face up to the fact that all existing products services markets distributive channels processes technologies have limited and usually short health and life expectanciespg 152The entrepreneurial the new has to be organized separately from the old and existingpg 161It is the duty of the founder or founders to build a management team as their new venture grows He takes this really seriously In an entrepreneurial society individuals face a tremendous challenge a challenge they need to exploit as an opportunity the need for continuous learning and relearning The correct assumption in an entrepreneurial society is that individuals will have to learn new things well after they have become adults and maybe than once The correct assumption is that what individuals have learned by age twenty one will begin to become obsolete five to ten years later and will have to be replaced or at least refurbished by new learning new skills new knowledge The assumption from now on has to be that individuals on their own will have to find determine and develop a number of 'careers' during their working livespg 264

  5. Mohammad Shaker Mohammad Shaker says:

    As always Peter Drucker is one of my favourites on the subject A book from the 80s that still a great read today on a very changing and challenging subject such as entrepreneurship is a sole indicator of how great the book is

  6. Goktug Yilmaz Goktug Yilmaz says:

    3 Keys The test of an innovation lies not on its novelty its scientific content or its cleverness It lies in its success in the marketplace uality in a product or service is not what the supplier puts in It is what the customer gets out and is willing to pay for A product is not “uality” because it is hard to make and costs a lot of money That is incompetence Customers pay only for what is of use to them and gives them value Nothing else constitutes uality All economic activity is by definition “high risk” Defending yesterday is far risky than making tomorrow Notes A “premium” price is always an invitation to the competitor Innovation creates a resource Until men founds how to use them every plant is a weed and every mineral just another rock There is no greater resource in an economy than purchasing power High tech does not generate enough jobs to make the whole economy grow But the “low tech” of systematic purposeful managed entrepreneurship does Because of high amount of inventors rather than entrepreneurs high tech industries follow the traditional pattern of great excitement rapid expansion and then sudden shakeout and collapse the pattern of “from rags to riches and back to rags again” in five years People who need certainty are unlikely to make good entrepreneurs politicians military commanders Decisions have to be made and the essence of any decision is uncertainty Everyone who can face up to decision making can learn to be an entrepreneur and to behave entrepreneurially Entrepreneurship is behavior rather than personality trait Entrepreneurship rests on a theory of economy and society that sees change as normal and healthy The major task in society and economy is doing something different rather than doing better what is already being done Technology can be imported at low cost and with a minimum of cultural risk Institutions by contrast need cultural roots to grow and to prosper Clever innovative strategy always fails particularly if it is aimed at exploiting an opportunity created by a change in industry structure Only the very simple specific strategy has a chance of succeeding Innovations that exploit changes in industry structure are particularly effective if the industry and its markets are dominated by one or few large manufacturer or supplier Large dominant producers and suppliers having been successful and unchallenged for many years tend to be arrogant At first they dismiss the newcomer as insignificant and amateurish But even when the newcomer takes a larger share of their business they find it hard to mobilize themselves for counteraction Serious limitation Incongruity is usually available only to people within a given industry or service It is not something that somebody from the outside is likely to spot to understand and hence is able to exploit Users are always away of incongruity Things don't match to expectations What is lacking however is someone willing to listen somebody who took seriously what everybody proclaims That the purpose of a product or a service is to satisfy the customer If this axiom is accepted and acted upon using incongruity as an opportunity for innovation becomes fairly easy and highly effective Innovation reuires major effort It reuires hard work on the part of performing capable people the scarcest resource in any organization Innovation is organized systematic rational work Innovation is an economic or social rather than a technical term Innovation by definition has to be decentralized ad hoc autonomous specific and micro economic It had better start small tentative flexible If the leader uses his leadership position to raise prices or to raise profit margins except by lowering his cost he sets himself up to be knocked down by anyone who uses entrepreneurial judo against him The leader in a rapidly growing new market or new technology who tries to maximize rather than to optimize will soon make himself vulnerable to entrepreneurial judo In an entrepreneurial society individuals face a tremendous challenge a challenge they need to exploit as an opportunity the need for continuous learning and relearning In traditional society it is assumed that learning came to an end with adulthood What one had not learned by age 21 one would never learn But also what one had learned by age 21 would apply unchanged the rest of one’s life On these assumptions traditional apprenticeship was based traditional crafts traditional professions but also the traditional systems of education and the schools Crafts professions systems of education and schools are still based on these assumptionsSources For Opportunities1 The Unexpected Accidentally finding an opportunity Least risky 2 Incongruities Difference between reality and how it should be Someone is faulty 3 Process Need Task focused perfects a process that exists 4 Industry and Market Structures Industries change overtime as products get cheaper to build Mass market5 Demographics Population changes and their demands 6 Changes in Perception People choosing other products Veganism7 New Knowledge New science or tech or method becomes available MicrochipsNew KnowledgeNew tech becomes available Has short time span high casualty rate low predictability Wright Brothers’ airplane had 2 knowledge roots 1 Gasoline engine designed to power the first automobiles built 2 Mathematical aerodynamics developed primarily in experiments with gliders Each was developed uite independently It was only when the two came together that the airplane became possible Computer reuired the convergence of 5 different knowledges a scientific invention the audion tube; a major mathematical discovery the binary theorem; a new logic; the design concept of the punchcard; and the concepts of program and feedback Until all these were available no computer could have been built Swan developed his light bulb at exactly the same time as Edison Technically Swan’s bulb was superior to the point where Edison bought up the Swan patents and used them in his own light bulb factories But Edison not only thought through the technical reuirements Before he even began the technical work on the glass envelope the vacuum the closure and the glowing fiber he had already decided on a “system” his light bulb was designed to fit an electric power company for which he had lined up the financing the rights to string wires to get the power to his light bulb customers and the distribution system Swan the scientist invented a product; Edison produced an industry Even when based on meticulous analysis endowed with clear focus and conscientiously managed knowledge based innovation still suffers from uniue risks and worse an innate unpredictability For a long time there is awareness of an innovation about to happen but it does not happen Then suddenly there is a near explosion followed by a few short years of tremendous excitement startup activity and publicity Five years later comes a “shakeout” which few survive In 1856 Werner Siemens in Germany applied the electrical theories Michael Faraday had developed around 1830 to the design of the 1st dynamo It caused a worldwide sensation From then on it became certain that there would be an “electrical industry” and that it would be a major one Dozens of scientists and inventors went to work But nothing happened for 22 years The knowledge was missing Maxwell’s development of Faraday’s theories Edison invented the light bulb in 1878 and the race was on Within the next five years all the major electrical apparatus companies in Europe and America were founded But only few survived out of a hundred companies in 20 countries All eagerly financed by the investors of their time and all expecting to be unicorns This upsurge of the electrical industry gave rise to the 1st great science fiction boom But by 1900 most of these companies had already disappeared whether out of business bankrupt or absorbed by the few survivors In 1910 200 automobile companies in the USA 1930s 20 left 1960 4 left This pattern happened in every industry Each time the survivor has been a company that was started during the early explosive period After that period is over entry into the industry is foreclosed for all practical purposes There is a “window” of a few years during which a new venture must establish itself in any new knowledge based industry But today the “window” time length is the same but because of globalization it is becoming and much crowded These companies have less chance of survival The number of knowledge based innovators that will survive when an industry matures and stabilizes is no larger than it has traditionally been When the shakeout comes the casualty rate is therefore much higher than it used to be And the shakeout always comes; it is inevitable Time is working against science and tech based innovators In all innovation based on any other source—the unexpected incongruities process need changes in industry structure demographics or changes in perception—time is on the side of the innovator In any other kind of innovation innovators can reasonably expect to be left alone If they make a mistake they are likely to have time to correct it And there are several moments in time in which they can launch their new venture Not in scientific and tech knowledge based innovation Here there is only a short time the “window” during which entry is possible at all Here innovators do not get a 2nd chance The environment is harsh and unforgiving Once the “window” closes the opportunity is gone forever In some knowledge based industries a 2nd “window” does in fact open 20 30 years or so after the 1st one has shut down Computers are an example 1955 1978 The 1st “window” in computers was between 1949 1955 During this period every single electrical apparatus company in the world went into computers By 1970 every single one of the “biggies” was out of computers The field was occupied by companies that didn't exist at all or had been small Late 70s a 2nd “window” opened with the invention of micro chips But the companies that had failed in the 1st round did not come back in the 2nd one Even those that survived the 1st round stayed out of the 2nd or came in late and reluctantly The one exception was IBM the undisputed champion of the 1st round And this has been the pattern too in earlier knowledge based innovationsThe Shakeout The “shakeout” sets in as soon as the “window” closes And the majority of ventures started during the “window” period do not survive the shakeout Which will survive die become crippled is unpredictable It is futile to speculate Sheer size may ensure survival But it does not guarantee success in the shakeout At 1st such industries are in the limelight and attract far entrants and far capital than mundane areas Also the expectations are much greater More people become rich building businesses like shoe polish or a watchmaking company than have become rich through high tech businesses No one expects shoe polish makers to build a unicorn or considers them a failure if all they build is a sound but modest family company High tech is a risky high low game High tech is not profitable for a very long time To be successful a knowledge based innovation needs receptivity to it The innovation brings about the change It aims at creating a want and no one can tell in advance whether the user is going to be receptive indifferent or actively resistant There are exceptions Whoever produces a cure for cancer need not worry about “receptivity” But such exceptions are few Inmost knowledge based innovations receptivity is a gamble There may be great receptivity yet no one realizes it And there may be no receptivity or even heavy resistance when everyone is uite sure that society is actually eagerly waiting for the innovation If we want knowledge based innovation we must gamble on receptivity to it Areas that are not in the public eye have far lower risks if only because there is time But high risk is inherent in knowledge based innovation It is the price we have to pay for its impactThe Bright Idea Innovations based on a bright idea probably outnumber all other categories taken together 7 8 of 10 patents belong here Bright ideas are the riskiest and least successful source of innovative opportunities 1 out of 100 patents breakeven 1 out of 500 makes money No one knows which ideas for an innovation based on a bright idea have a chance to succeed and which ones are likely to fail Belief that you’ll win if only you keep on trying out bright ideas is no rational than to win the jackpot at Las Vegas one only has to keep on pulling the lever The machine is rigged to have the house win 70% of the time The often you pull the often you lose The greatest inventive genius was Leonardo da Vinci There is a breathtaking idea—submarine or helicopter or automatic forge—on every page of his notebooks But not one of these could have been converted into an innovation with the technology and the materials of 1500 None of them would have any receptivity in the society and economy of the time Do's1 Analysis of the opportunities 2 Go out look ask listen 3 Should do one thing Has to be simple and focused 4 Start small try to do one specific thing 5 Aim at leadership Don'ts1 Don't try to be clever 2 Don’t diversify don’t split don’t try to do too many things at once 3 Don't try to innovate for the future 3 Conditions1 Innovation is work It reuires knowledge It often reuires great ingenuity Also innovators rarely work in than one area 2 Innovators must build on their strengths Ask “Which of these opportunities fits me fits this company puts to work what we are good at and have shown capacity for in performance3 Innovation is an effect in economy and society a change in the behavior of customers Innovation always has to be close to the market focused on the market market driven4 entrepreneurial strategies 1 Being “Fustest with the Mostest” Aim at uick leadership 2 Hitting Them Where They Ain’t Creative imitation3 Ecological Niche Obtain a practical monopoly in a small area4 Changing the economic characteristics of a product a market or an industryFustest with the Mostest The strategy of being “Fustest with the Mostest” is very much like a moon shot Once launched the “Fustest with the Mostest” strategy is difficult to adjust or to correct To use this strategy in other words reuires thought and careful analysis In fact for this strategy to succeed at all the innovation must be based on a careful and deliberate attempt to exploit one of the major opportunities for innovation After the innovation has become a successful business the work really begins Then the strategy demands substantial and continuing efforts to retain a leadership position; otherwise all one has done is create a market for a competitor The entrepreneur who has succeeded in being “Fustest with the Mostest” has to make his product or his process obsolete before a competitor can do it Creative Imitation Starts out with markets rather than with products and with customers rather than with producers It is both market focused and market driven Reuires a rapidly growing market Creative imitation satisfies a demand that already exists rather than creating one Creative imitation is likely to work most effectively in high tech areas for one simple reason high tech innovators are least likely to be market focused and most likely to be technology and product focused They therefore tend to misunderstand their own success and to fail to exploit and supply the demand they have created Because creative imitation aims at market dominance it is best suited to a major product process or service It carries less risk By the time creative imitators go to work the market has already been identified and the demand has already been createdLessons from History Japanese manufacturers “television would not grow fast in Japan” “Japan is much too poor to afford such a luxury” But the Japanese farmers apparently did not know that they were too poor for television What they knew was that television offered them access to a big world They could not afford television sets but they were prepared to buy and pay Japanese made a deliberate decision 100 years ago to concentrate their resources on social innovations and to imitate import and adapt technical innovations with startling success What made universal schooling possible was a lowly innovation the textbook Without the textbook even a very good teacher cannot teach than one or two children at a time; with it even a pretty poor teacher can get a little learning into the heads of 35 students Publishers and the existing bookstores knew that book sales were soaring Neither did anything about it The unexpected event was exploited by a few mass retailers such as department stores None of them knew about books but they knew the retail business They started bookstore chains that are different like supermarkets They didn't treat books as literature but as “mass merchandise” and they concentrate on the fast moving items that generate the largest dollar sales per unit of shelf space They are located in shopping centers with high rents but also with high traffic whereas everybody in the book business had known all along that a bookstore has to be in a low rent location Traditionally booksellers were themselves “literary types” and tried to hire people who “love books” Managers of the new bookstores are former cosmetics salespeople The joke among them is that any salesperson who wants to read anything besides the price tag on the book is hopelessly overualified These new bookstore chains have been among the most successful and fastest growing segments in the country Math Max 20% of students learn math easily The rest never really learn it It is possible to make a very much larger percentage to pass math tests Japanese do this through heavy emphasis on the subject But that does not mean that Japanese children learn math They learn to pass the tests and then immediately forget math 10 years later Japanese do just as poorly on math tests as do westerners In every generation there is a math teacher of genius who somehow can make even the untalented learn But nobody has ever been able to replicate what this one person does The need is acutely felt but we do not understand the problem Is it a lack of native ability Is it that we are using the wrong methods Are there psychological and emotional problems No one knows the answer And without understanding the problem we have not been able to find any solution

  7. Adam McNamara Adam McNamara says:

    Innovation and Entrepreneurship is about how to find opportunities to innovate how to manage entrepreneurship within an organization and how to manage entrepreneurial strategy in the marketIn each of these three major sections Drucker presents frameworks that help organize your thoughts For example he proposes seven sources of innovation opportunities like The Unexpected Process Needs and New Knowledge He's uick to provide relevant case studies for each helping to make the classifications memorable His ideas are important and they've withstood the test of time Drucker seems to be an authoritative source upon which later thinkers have built their ideas and careersThat said the book itself was not an enjoyable read Drucker relies heavily on lists three points for this and five for that that run on across paragraphs and pages The reader often has to hunt among examples and anecdotes to piece together the actual bullets of the listSimilarly Drucker often chooses folksy names for ideas like Fustest with the Mostest where a straightforward title like First to Dominate would serve everyone betterWhat this comes down to I think is interesting thinking paired with poor editing If you want to understand innovation read this book as many newer books build on top of its ideas However as with all business books beware of academics prescribing ultimate theories

  8. Robert Robert says:

    Most people probably think that innovation and entrepreneurship is something that happens by chance or by magic Reading this book by Peter Drucker should dispel this notion totally Not only is innovation and entrepreneurship something that can be measured but it is something that can be learnedThe book initially provides definitions of what innovation and entrepreneurship is what the different types and aspects of each are and where they are most likely to occur Drucker then continues on with an analysis of how these factors can be fostered within any businessThis is great book if you are looking to improve you business as it provides concrete analysis and steps you can take to encourage and promote innovation and entrepreneurship in your business

  9. Nicholas Nicholas says:

    Peter Drucker is awesomeHe turns innovation into a discipline I need to read of this guyDrucker lists the seven places where innovation takes place and then goes into detail for each one The interesting thing is that few of them are what people normally think of as innovationuotesEntrepreneurs are a minority among new businesses They create something new something different; they change or transmute valuesEntrepreneurship is thus a distinct feature whether of an individual or of an institution It is not a personality trait; in thirty years I have seen people of the most diverse personalities and temperaments perform well in entrepreneurial challengesThe essence of any decision is uncertaintyThe entrepreneur always searches for change responds to it and exploits it as an opportunityNothing could be as risky as optimizing resources in areas where the proper and profitable course is innovationEntrepreneurship is risky mainly because so few of the so called entrepreneurs know what they are doing They lack the methodology They violate elementary and well known rules This is particularly true of high tech entrepreneursInnovation then is an economic or social rather than a technical term It can be defined the way JB Say defined entrepreneurship as changing the yield of resources Or as a modern economist would tend to do it can be defined in demand terms rather than in supply terms that is as changing the value and satisfaction obtained from resources by the consumerEntrepreneurs will have to learn to practice systematic innovation Successful entrepreneurs do not wait until the Muses kisses them and gives them a bright idea; they go to work Altogether they do not look for the biggie the innovation that will revolutionize the industry create a billion dollar business or make one rich overnight Those entrepreneurs who start out with the idea that they'll make it big and in a hurry can be guaranteed failureSystematic innovation therefore consists in the purposeful and organized search for changes and in the systematic analysis of the opportunities such changes might offer for economic or social innovationWithin the enterpriseThe unexpected the unexpected success the unexpected failure the unexpected outside event;The incongruity between reality as it actually is and reality as it is assumed to be or as it ought to be;Innovation based on process need;Changes in industry structure or market structure that catch everyone unawaresOutside the enterpriseDemographics population changes;Changes in perception mood and meaning;New knowledge both scientific and nonscientificFor all the visibility glamour and importance of science based innovation it is actually the least reliable and least predictable oneOne reason why it is difficult for management to accept unexpected success is that all of us tend to believe that anything that has lasted a fair amount of time must be normal and go on forever Anything that contradicts what we have come to consider a law of nature is then rejected as unsound unhealthy and obviously abnormalIt takes an effort to perceive in the enemy one's own best opportunityThe unexpected success is an opportunity but it makes demands It demands to be taken seriouslyBut such opportunities reuire than mere luck or intuition They demand that the enterprise search for innovation be organized around it and be managed so as to exploit itThe innovation that successfully exploits an incongruity between economic realities has to be simple rather than complicated obvious rather than grandioseThe reaction of the typical producer and supplier is then to complain that customers are irrational or unwilling to pay for uality Whenever such a complaint is heard there is reason to assume that the values and expectations the producer or supplier holds to be real are incongruous with the actual values and expectations of customers and clients Then there is reason to look for an opportunity for innovation that is highly specific and carries a good chance of successTen years later by the time they are in their late twenties Japanese do just as poorly on mathematics tests as do westernersInnovations that exploit changes in industry structure are particularly effective if the industry and its markets are dominated by one every large manufacture or supplier or by a very few Even if there is no true monopoly these large dominant producers and suppliers having been successful and unchallenged for many years tend to be arrogant At first they dismiss the newcomer as insignificant and indeed amateurish But even when the newcomer takes a larger and larger share of their business they find it hard to mobilize themselves for counteractionAn innovation to be effective has to be simple and it has to be focused It should do only one thing otherwise it confuses If it is not simple it won't workThe first is simply not to try to be too clever Innovations have to be handled by ordinary human beings and if they are to attain any size and importance at all by morons or near morons Incompetence after all is the only thing in abundant and never failing supplyEntrepreneurship is not natural; it is not creative It is workEverything takes longer than we hope or estimate; everything also reuires effortTo render an existing business entrepreneurial management must take the lead in making obsolete its own products and services rather than waiting for a competitor to do soThe forces that impede entrepreneurship and innovation in a public service institution are inherent in it integral to it inseparable from itIn so many new ventures especially high tech ventures the techniues discussed in this chapter are spurned and even despised The argument is that they constitute management and We are entrepreneurs But this is not informality; it is irresponsibilityAbove all the entrepreneur who has succeeded in being Fustest with the Mostest has to make his product or his process obsolete before a competitor can do it Work on the successor to the successful product or process has to start immediately with the same concentration of effort and the same investment of resources that led to the initial successCreative imitation these cases show does not exploit the failure of the pioneers as failure is commonly understood On the contrary the pioneer must be successfulBut the original innovators failed to understand their successThe creative innovator exploits the success of others Creative imitation is not innovation in the sense in which the term is most commonly understood The creative imitator does not invent a product or service; he perfects and positions it In the form in which it has been introduced it lacks somethingThese cases show what the strategy of creative imitation reuires It reuires a rapidly growing market Creative imitators do not succeed by taking away customers from the pioneers who have first introduced a new product or service; they serve markets the pioneers have created but do not adeuately service Creative imitation satisfies a demand that already exists rather than creating oneThe first point therefore is that in the early stages of a new industry a new market or a new major trend there is the opportunity to search systematically for the specialty skill opportunity and then there is usually time to develop a uniue skill The second point is that the specialty skill niche does reuire a skill that is both uniue and differentThirdly a business occupying a specialty skill niche must constantly work on improving its own skillWhile the specialty skill niche has uniue advantages it also has severe limitations One is that it inflicts tunnel vision on its occupantsA second serious limitation is that the occupant of a specialty skill niche is usually dependent on somebody else to bring his product or service to market It becomes a componentThere is no high technology here nothing patentable nothing but a focus on the needs of the customerDavid Ricardo Profits are not made by differential cleverness but by differential stupidity The strategies work not because they are clever but because most suppliers of goods as well as of services businesses as well as public service institutions do not thinkAnyone who asks the uestion What does the customer really buy will win the raceAnyone who is willing to use marketing as the basis for strategy is likely to acuire leadership in an industry or a market fast and almost without riskSurely one secret of the Japanese is their officially encouraged tax evasion on capital formation Legally a Japanese adult is allowed one medium sized savings account the interest on which is tax exempt Actually Japan has five times as many such accounts as there are people in the country children and minors included his is of course a scandal against which newspapers and politicians rail regularly But the Japanese are very careful not to do anything to stop the abuse As a result they have the worlds largest capital formationIn an entrepreneurial society individuals face a tremendous challenge a challenge they need to exploit as an opportunity the need for continuous learning and relearning

  10. Ehsan Choudhry Ehsan Choudhry says:

    Peter Drucker was way ahead of his time Published 35 years ago in 1985 the book is still so relevant today Innovation does not come about by random fluke or a random work of genius as most people wrongly tend to believe It is a systematic science like all sciences backed by compensation plans structure and strategies etc A company needs to build in its DNA a system which promotes innovation and entrepreneurship Further a society which aims at promoting entrepreneurship culture has to restructure and reorganise its policies to actively promote it without which it will die out

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Innovation and Entrepreneurship ❰Epub❯ ❦ Innovation and Entrepreneurship Author Peter F. Drucker – Peter Drucker's classic book on This is the first book to present innovation and entrepreneurship as a purposeful and systematic discipline that explains and analyzes the challenges and opportunities Peter Drucker's classic book on This is the first book to present Innovation and PDF/EPUB or Innovation and Entrepreneurship as a purposeful and systematic discipline that explains and analyzes the challenges and opportunities of America's new entrepreneurial economy Superbly practical Innovation and Entrepreneurship explains what established businesses public service institutions and new ventures need to know and do to succeed in today's economy.

  • Paperback
  • 288 pages
  • Innovation and Entrepreneurship
  • Peter F. Drucker
  • English
  • 14 May 2016
  • 9780060851132

About the Author: Peter F. Drucker

Peter Ferdinand Drucker was a writer management consultant and university professor His Innovation and PDF/EPUB or writing focused on management related literature Peter Drucker made famous the term knowledge worker and is thought to have unknowingly ushered in the knowledge economy which effectively challenges Karl Marxs world view of the political economy George Orwell credits Peter Drucker as one of the only writer.