Joel Adams Ken Stuart Engineering Science 466b © J. Adams & K. Stuart : Technology, Entrepreneurship, and Innovation January 16, 2004

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Class Objectives 1.What is technological entrepreneurship? 2.What is the impact of entrepreneurship on society? 3.What is the role of the engineer in new ventures? 4.What is technological innovation? 5.How have historical innovations impacted on business and society? For individual students, this class will prepare you to choose an emerging technology for your Market Research Report For business plan groups, this class will prepare you to start thinking about three potential business ideas for your Business Plan

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Lesson Plan First Hour: –Class Picture –What is Technological Entrepreneurship? –Criteria for New Venture Business Plan Ideas Second Hour: –What is Technological Innovation? –Historical Innovations –Emerging Technology Market Research Report –Finalize Groups Assignments: –Market Research Report Assigned (Individual) –Choose 3 New Venture Ideas for Next Week (Group)

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Definitions of an Entrepreneur “a concise universally accepted definition of entrepreneur or entrepreneurship does not exist… there is agreement that entrepreneurs have common personality traits.” –Noll, 1993, p.3 What are these Traits? Do you have them…

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Characteristics of an Entrepreneur? Six “Traditional” Characteristics: 1.Commitment and Determination 2.Leadership 3.Opportunity Obsession 4.Tolerance of Risk, Ambiguity, and Uncertainty 5.Creativity, Self-Reliance, and Ability to Adapt 6.Motivation to Excel –From an analysis by J.A Timmons (New Venture Creation, 1994) of over 50 studies on entrepreneurship

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Characteristics of an Entrepreneur? (continued) Six more “Traditional” Characteristics: 1.Being an off-spring of self-employed parents 2.Being fired from more than one job 3.Being an immigrant or a child of immigrants 4.Previous employment in a firm with more than 100 people 5.Being the oldest child in the family 6.Being a college graduate –From an Inc. Magazine article by A. Bianchi (“Who’s most likely to go it alone”, 1993)

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Definitions of an Entrepreneur “a concise universally accepted definition of entrepreneur or entrepreneurship does not exist… there is agreement that entrepreneurs have common personality traits.” –Noll, 1993, p.3 “There is only one definition: An entrepreneur is someone who gets something new done.” –Peter F. Drucker, Interview with Inc. Magazine

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : The Myth of the Entrepreneur Myth: –Successful entrepreneurs are always rugged individualists who crave risk, work mostly alone, and are always breaking all the rules Reality: –Successful entrepreneurs come in all shapes and sizes, spend most of their time working in teams, and some may be risk adverse –See Byers, Kist, Sutton (Characteristics of the Entrepreneur: Social Creatures, Not Solo Heroes, 1997)

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : The Myth of Teaching Entrepreneurship Myth: –Entrepreneurship can’t be taught – people are either born entrepreneurs… or they’re not Reality: –Potential entrepreneurs can be taught the skills and knowledge to be successful in business because… –Entrepreneurship is a Process not a Person! –Adapted from “Entrepreneurship: It Can Be Taught” (New Business, Harvard Business School, 2002)

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Definitions of an Entrepreneur “a concise universally accepted definition of entrepreneur or entrepreneurship does not exist… there is agreement that entrepreneurs have common personality traits.” –Noll, 1993, p.3 “There is only one definition: An entrepreneur is someone who gets something new done.” –Peter F. Drucker, Interview with Inc. Magazine “We believe entrepreneurship describes a way of managing rather than a specific economic function or characteristic of an individual.” –Adapted from the Harvard Business School website “We define entrepreneurship as the pursuit of opportunity beyond [or regardless of] the tangible resources currently controlled.” - Harvard Business School

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Entrepreneurship as a Process Three Major Steps: 1.The search for exploitable technology Recognition and Evaluation of OPPORTUNITIES Technology Risk 2.Planning the New Venture Marshalling RESOURCES in the presence of RISK Business Risk 3.Managing the New Venture Building the NEW business venture Execution Risk

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : The Importance of Entrepreneurship SME’s = Small & Medium sized Enterprises –Small Business <100 employees (<$5Million) –Medium Business employees ($5-50Million) –Large Business >500 employees (>$50Million) Over 1.3 million Canadians are Self Employed Of the over 900,000 employer businesses, only about 4,000 had more than 500 employees Wealth Through Technological Entrepreneurship, Canadian Academy of Engineering

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : The Importance of Entrepreneurship Small businesses drive the economy: –99% of all businesses in Canada –50% of total private sector employment –42% of total private sector GDP SME’s –85% of new job creation –Invest more in R&D –Diffuse technology more rapidly –Develop more products and services –Produce more than half of new innovations –But only account for 10% of Exports… Wealth Through Technological Entrepreneurship, Canadian Academy of Engineering

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : The Impact of Technological Entrepreneurship Only 10% of Exports are from SME’s, but… –Those that do export invest MUCH more in R&D, and are more creative, and more innovative Innovative firms are the main source of new wealth and job creation in Canada and globally Therefore, this course will focus on Technological Entrepreneurship… –The process of starting a new business, based on innovative technology, that has the potential to become a profitable leader in attractively sized global markets –But many of the lessons will apply to all businesses Wealth Through Technological Entrepreneurship, Canadian Academy of Engineering

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : What is Technological Entrepreneurship? For this course, and for your business plan: –New for-profit venture –Technology based business –Innovative products or Innovative processes –Possible service component –Start small, Think BIG! –Large, global, market opportunity –Potential to become a market leader –Defendable competitive advantages –Will provide a strong return on investment

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Technology, Products, and Markets Market Pull Technology Products Markets Technology Push Market Feedback Modifies Technology and Products From Making Technology Happen, D. Doyle © 2002 by Doyletech Corporation

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : The role of the Engineer in Entrepreneurship Engineers drive technological entrepreneurship, as inventors, researchers, designers, and as managers Engineers make up the largest percentage of: –Silicon Valley start-up founders and early employees –Chief Executive Officers of the top 1,000 public corporations – more than business graduates Engineers are often the first hires and an important part of the technical (and management!) team One third of the MBA class at Ivey are Engineers “Technically, engineers are well-qualified in many respects for this activity, but often lack the necessary business skills and entrepreneurial mentality.” –Wealth through Technological Entrepreneurship (CAE)

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Entrepreneurship and Innovation Next Hour: “Innovation is the specific tool of the entrepreneur” –Peter F. Drucker

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : What is Technological Innovation? “An Innovation is an idea, practice, or object that is perceived as new by an individual or other unit of adoption…if an idea is new to an individual, it is an innovation.” –Rogers, Diffusion of Innovations, 4 th Edition, 1995 “Creativity is thinking up new things. Innovation is doing new things.” –Theodore Levitt “Innovation: the process of bringing new goods and services to market, or the result of that process.” –Public Investments in University Research: Reaping the Benefits, Advisory Council on Science and Technology

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Why is Technological Innovation Important? “Business has only two basic functions – marketing and and innovation.” –Peter F. Drucker 1.Innovation provides competitive advantage 2.Innovation provides a better quality of life How?

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Types of Innovation Two Main Types of Innovation: 1. Technical or Product Innovations 2. Business Process Innovations

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Innovation Misquote "Everything that can be invented has been invented." –Charles H. Duell, U.S. Commissioner of Patents, in –Actually an urban legend, but often falsely attributed to Mr. Duell

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Real Innovation Quotes “I think there is a world market for maybe five computers” –Thomas Watson, Chairman of IBM, 1943 “There is no reason anyone would want a computer in their home” –Ken Olson, founder of DEC, 1977 “Computers in future may weigh no more than 1.5 tons” –Popular Mechanics 1949

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Obligatory Simpson’s Quote “ Well, sure, the Frinkiac-7 looks impressive, don't touch it, but I predict that within 100 years, computers will be twice as powerful, 10,000 times larger, and so expensive that only the five richest kings of Europe will own them. ” –Professor John Frink (Simpsons Episode 3F20)

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Your Innovations

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Greatest 20 th Century Engineering Achievements 1.Electrification 2.Automobile 3.Airplane 4.Water Supply and Distribution 5.Electronics 6.Radio and Television 7.Agricultural Mechanization 8.Computers 9.Telephone 10.Air Conditioning and Refrigeration 11.Highways 12.Spacecraft 13.Internet 14.Imaging 15.Household Appliances 16.Health Technologies 17.Petroleum and Petrochemical Technologies 18.Laser and Fibre Optics 19.Nuclear Technologies 20.High Performance Materials Copyright © 2000 NAE

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Assignment: Market Research Report 20% of Final Mark 4-5 Page Report Due Date, Start of Class, February 12 th –Submit by if late (i.e. after 7:00pm Feb 12 th ) Choose an emerging technology by next class Choices must be approved by the instructors Complete assignment over next three classes –Market Research, January 22 nd –Market Analysis, January 29 th –Market Planning, February 6 th Assignment forms will be handed out next week

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Suggestions: Market Research Report Search on the web, magazines, journals for ideas Ask your professors about emerging trends in your discipline, perhaps something non-obvious Choose an industry you may want to work in You will be asked to complete the following –Description of technology, products, and alternatives –List and description of key competitors –Estimate size of potential markets –Analysis of the market and the product –Recommended strategies and predictions

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Take-Away Entrepreneurship is a process that can be taught: 1.Finding and evaluating innovative technologies 2.Planning a new business venture 3.Managing for profitability and growth Technological entrepreneurship is a leading part of the economy and critical to economic success Ideas are not enough, technology must be turned into products to be successful in the marketplace Engineers play a critical part in this process Innovation is also a process Innovation comes in all forms and has wide impact

Technology, Entrepreneurship, and Innovation Engineering Science 466b © J. Adams & K. Stuart : Next Week Market Research & Competitive Analysis Tuesday, 7:00-9:00 (regular location) No Thursday Class (Canadian University Technology Conference in Toronto) For Next Class: –Individuals: Submit emerging technology idea –Groups: Create them and identify contact person, consider three possible ideas