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Innovation Entrepreneurship and Intrapreneurship The concepts of Entrepreneurship, Intrapreneurship, and Innovation are closely related. It is important to establish an understanding of these three terms in order to appreciate the benefits and risks of SMEs and IDEs. Entrepreneurship is defined in the Business Dictionary (2016) as, “the capacity and willingness to develop, organize and manage a business venture along with any
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ConawayL_MBA5102-8_4 4 of its risks in order to make a profit”. Aulet stated it simply as, “the ability to create a company where there wasn’t one before” (Aulet, 2013). When entrepreneurial activities take place within existing organizations, this is referred to as intrapreneurship (Gundogdu, 2012). Innovation then is the process of commercializing an idea or invention into a good or service that creates value (Aulet, 2013). The primary difference between IDEs and SMEs deals with purpose. IDEs seek to bring innovations to global markets, while SMEs focus on regional markets and building upon traditional, well-understood types of businesses. IDEs focus on products for export and trying to sustain a competitive advantage over others in the market. Both require entrepreneurs or individual with and entrepreneurial spirit to make the business a success. The approach however, that these two types of enterprises take vary greatly, mainly because of the difference in the size of the operations. It is this factor that has the most impact on the benefits and risks facing IDEs versus SMEs (Knight, 2013). Risks and Benefits of SMEs and IDEs Aulet’s analysis focuses on Innovation Driven Enterprises (IDEs) whereas Peters’ primary focus has been on Small and Medium Enterprises (SMEs). Risk facing IDEs include the need for capital expenditure. IDEs are exposed to greater degrees of risks than SMEs because their audience is global and this requires larger investments in innovation that hopefully can be marketed to a broad consumer base. Since IDEs are bringing new and un-tested ideas into the market, the probability of failure is greater. It also takes IDEs longer to get to market than SMEs, again increasing their levels of risk in comparison to that which a SME might experience. However, if they succeed, their growth potential is significant (Knight, 2013).
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ConawayL_MBA5102-8_4 5 Creating a Culture of Innovation Lou Gerstner in Who Says Elephants Can’t Dance wrote; “culture isn’t just one aspect of the game—it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value”; the innovation of its people (Gundogdu, 2012). This concept is a common thread present in the viewpoints presented by Bill Aulet, Tom Peters, and in the video the Execution Plan on how companies can create a culture of innovation. Innovation begins with the right mindset. An attitude of innovation must be created at the top of the organization and infused into all levels within the organization. The proper mindset includes the beliefs, expectations, and sense of purpose of those in the organization, the intangibles of culture (Heywood, De Smet &Webb, 2014). Aulet c
