Why Innovation and Entrepreneurship Go Hand in Hand Only with the power of innovation one can make a place in the competent environment of today

Invention and Innovation

It is useful to differentiate between invention and innovation. Invention has to do with a creation of a new product, process, application etc. which may or may not translate into solving an apparent or potential problem. Whereas innovation has to do with application of existing or a creative approach in addressing a problem. Thus, Artificial Intelligence is more an invention but application of that by Uber for computing the ETA or by Google Maps in estimating the speed of traffic are more of innovation.

Ventures and Entrepreneurship

Similarly, it will be worthwhile to differentiate between new ventures and entrepreneurship. Thus, if a couple opens a restaurant in a suburb, it is a new venture. Surely, they have taken a risk. But what they do has been done many times before. They create neither a new satisfaction nor meet new consumer demand. On the other hand, Starbuck's is an example of entrepreneurship. It did not invent anything new. Coffee was made and sold by large number of outlets for far too long. But by applying management techniques, standardizing the product and services it set new standards and created new markets and new customers. This is entrepreneurship.

Invention and new venture can stand on its own, but innovation and entrepreneurship are intertwined and go hand in hand. In fact, Peter Drucker in his book "Management – Task, Responsibilities and Practices" written way back in 1973 pointed out the two as the main function of every business. Entrepreneurs innovate. They exploit change as an opportunity for a different business or a different service by innovation.

Innovation does not have to be technical nor does it have to be a "thing'. Giving exchange offer or pay per use scheme is highly innovative though not technical. Nor are the outcomes of innovations guaranteed. Some innovation that look very big may turn out to be nothing but technical brilliance. On the other hand, some innovation with modest intellectual pretensions, a MacDonald for instance, may turn out into gigantic highly profitable business.

Innovative Entrepreneurial Stories

Karsanbhai Patel did not invent detergent. Instead his innovation in distribution, money back guarantee and appealing price point is what translated into Nirma story where an Indian Entrepreneur took one the MNCs and rewrote the rules of the business. Similar is the success story of Balaji Chips.

A traditional halwai shop morphed into Haldiram's, is a story of innovation into packaging and offering the quality product with extensive availability through penetrative distribution. On the other hand Prem Ganapathy – the man who patented a number of varieties of Dosa and has more than 100 varieties on his menu - not only innovated in the form of bringing a range of dosas but also in leveraging the expertise by opening a number of franchises of his Dosa Plaza in many parts of the world. We also know of Ramesh Babu, a barber who became millionaire by innovation in the area of car rental and creating a niche of renting luxury cars.

We have dazzling stories of innovations by 11 Indian entrepreneurs who pulled off the impossible in the book "Making Breakthrough Innovation Happen' by Porus Munshi including the stories of Dainik Bhasker and Arvind Eye Hospital.

What is important to understand is that the innovation need not be grandiose. Instead to be effective it must be simple and focused on addressing specific issue or need. It is always better to able to start small, requiring limited resources, few people and only a small market. Otherwise there is not enough time to make the adjustments and changes that are invariably required in the initial stage. Innovations are to be handled by ordinary human being so it should not be too complex or clever.

As pointed out earlier Entrepreneurs innovate. They know that innovation is work. It requires knowledge, creativity and willingness to challenge what is established as a given truth. It is also important to stress that for success innovators must build on their strength. And finally innovation is based on grasping the change in the needs and as such has to be close the market and the customer.