1. Innovation and Entrepreneurship by Peter F. Drucker David E. Goldberg University of Illinois at Urbana-Champaign

2. Text Drucker, P. F. (1986). Innovation and entrepreneurship. New York, NY: Harper & Row. Long career at Claremont College.

3. Entrepreneur J. B. Say, “The entrepreneur shifts resources out of an area of lower and into an area of higher productivity and greater yield.” Joseph Schumpeter 1911, Theory of creative destruction. Change is normal.

4. 7 Sources of Innovative Opportunity Systematic innovation 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 innovation. Internal: unexpected, incongruity, process need, changes in industry structure External: demographics, changes in perception, mood, and meaning, new knowledge

5. Unexpected Unexpected success: Macy’s and appliance sales. Unexpected failure: Example of locks in India. Unexpected outside activity: PC & IBM.

6. Incongruity Between is and ought Types: –Between different economic realities. –Between industry reality and assumptions. –Between industry effort and values and expectations of customers. –Internal logic of a process.

7. Principles of Innovation Begin with analysis of opportunities. Innovation as conceptual and perceptual. Simple and focused. Start small. Aims at leadership.

8. Don’ts Don’t be clever. Don’t diversify. Don’t diversify for the future; diversify for the present.

9. 3 Conditions Innovation is work. It builds on strength. Innovation is an effect in economy and society.

10. Conservative Innovator Tries to minimize risk (cf Vincenti). Not the usual stereotype.

11. Overcoming Resistance to Change Culture of innovation necessary. Need innovation plan. Greed for new things. Systematic abandonment.

12. Practices Focus on opportunity: Usually focus on problems. Create entrepreneurial spirit among team. Listen to young people.

13. Measuring Innovative Performance Feedback from results to expectations. Systematic review across the board. Compare results to expectations innovation.

14. Structure Separate old and new. Special locus for new. Consider different incentives, monetary and administrative. Differential returns on innovation. Hold new stuff accountable.

15. 4 Strategies Fustest with the mostest. High risk. Hitting them where they ain’t: creative imitation, entrepreneurial judo. Occupy a niche. Changing economics of product, market, or industry.

16. Bad Habits NIH Cream skimming. Quality: in eyes of customer not producer. Premium price. Maximizing not optimizing.

17. Niches Toll-gate Specialty skill Specialty market