Innovation and Entrepreneurship
Peter F. Drucker, author of many works including MANAGING FOR RESULTS and MANAGEMENT: TASKS, RESPONSIBILITIES, PRACTICES has now written a work on innovation and entrepreneurship. This book, whose primary focus is on the actions and behavior of entrepreneurs, presents innovation and entrepreneurship as a practice and a discipline.
INNOVATION AND ENTREPRENEURSHIP is divided into three main sections: “The Practice of Innovation,” “The Practice of Entrepreneurship,” and “Entrepreneurial Strategies.” The introduction describes innovation and entrepreneurs in relation to the economy; the conclusion describes them in relation to society.
In Part 1, Drucker defines innovation as a means by which entrepreneurs may exploit change in order to create new service and business opportunities. Entrepreneurial enterprises by their nature create a market niche and fill a consumer need. These enterprises include small businesses, large enterprises, and nonbusiness service institutions. Sources for innovative opportunities in enterprises include new knowledge (scientific and non-scientific) and changes in industry structure, demographics, and perceptions.
Drucker’s principles of innovation require analysis of opportunities, receptivity to new opportunities, starting small, looking to the simple, and achievement of leadership.
Part 2 focuses on managerial strategies for the new venture, the existing business, and the public service institution. All organizations must acquire entrepreneurial competence to keep pace with changes in economy and society. Leaders in the three types of organizations must become skilled in entrepreneurial management.
Part 3 examines practices and policies that entrepreneurs should follow in the marketplace. Drucker’s strategies involve aiming for leadership and/or dominance of a new market or existing market, finding and occupying a specialized niche, and changing the economic characteristics of a product, market, or industry.
In concluding, Drucker stresses the need for innovation and entrepreneurship in society. To obtain this, entrepreneurial executives must make innovation and entrepreneurship “a normal, ongoing, everyday activity, a practice in their own work and in that of their organization.” This treatise on innovation and entrepreneurship should be required reading for today’s business people.