SCI 801 Note 4

CREATIVITY AND INNOVATION

Opportunity identification is central to the domain of entrepreneurship because at the core of
entrepreneurship revolves around the questions of why, when and how of opportunity recognition
for the creation of goods and services in a given economy. This opportunity recognition is a
projector of both personal and societal wealth. It has been argued that understanding the
opportunity and identification process is one of the primary challenges in the domain of
entrepreneurship research.
The following are some of the most resources of entrepreneurial opportunities:
Trend; population, economy and technology
Unexpected occurrences
Incongruities: the gap between importation and process needs
Industry and market changes
Demographic changes: age, education, gender etc
Perceptual changes: people's interpretation of things around them such as
product produced
Knowledge based concept: it leads to innovations and creativity
Creativity
It is the ability to develop new ideas and to discover new ways of looking at problems and
opportunities. Creativity is the generation of ideas that results in improved efficiency and
effectiveness of a system. Two important aspects of creativity exist: people and process.
The ability to develop new ideas is a process that is goal oriented which is design to provide a
solution to a problem. People are the sources that determine the solution because the process
remains the same but the approach that people use differs from one place to another.
Nature of creative process
Creativity is a process that can be developed and improved. Everybody is creative to some degree,
however, as it is the case with many abilities and talent, some individuals have higher or greater
aptitude of creativity than others. Also, some people have been raised and educated in an
environment that encourages them to develop their creativity. They have been taught to think and
act creatively. To others, the process is more difficult because they have not been positively

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reinforced, if they have to be creative, they must learn how to implement the creative process.
Creativity is the easiest way of looking at the walls which is often illogical.
Creativity process involves a series of relationships among things where others have not seen the
relationship. The creative process has four commonly agreed steps;
Background or knowledge accumulation: successful creative is preceded by investigation
information gathering this usually involve extensive reading, conversation with others, working in
the field, attendance at personal meeting and workshop and the general adoption of information
relating to the problem or issues under study.

Incubation: creative individuals allow their subconscious to mull over the tremendous amount of
information they gather during the preparation stage. This incubation process often occurs where
individuals are engaged in activities totally unrelated to the subject of the problem. Some of the
most helpful steps to include are as follows:
i. Engage in routine mindless activities
ii. Exercise regularly
iii. Play
iv. Think about the problem before falling asleep
v. Mediate
Idea experience: this path is often the most existing because this is where the idea or the solution
the individual is seeking is discovered. These are sometime referred to as EUREKA factors. This
is also the step that an average person incorrectly perceived as the only component of creativity.
Idea
experience often imagine while the person is doing something unrelated to the problems. In most
cases, the idea comes to the person instructional, slowly formulate the ideas. There are several
ways to freed up the idea experience:
i. Daydream and fantasize about the problem
ii. Practice your hobbies
iii. Walk in a leisure environment
iv. Put the problem in the back corner
v. Keep a notebook at the bedside to record in the late night or early in the morning
vi. Take break while working

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Evaluation and implementation: successful entrepreneurs can identify ideas that are workable
and that entrepreneurs have the skills to implement. Entrepreneurs do not pick when they run in
through temporary obstacles often entrepreneurs would pay severally before successfully
developing their best ideas. In some cases, the entrepreneur would take the idea in an entirely
different direction, and we discover a new and more workable idea while struggling to implement
the original ideas. Another important part of this phase is working of ideas to oust them into firmer
form, some of their useful suggestions of implementation are as follows:
i. The entrepreneur should increase his or her energy level with prosper exercise, diet and rest
ii. The entrepreneur should engage him or herself in a business planning process and up-facets of
business
iii. The entrepreneur should test his or her ideas with knowledge people
iv. The entrepreneur should educate him or herself in the selling process
v. Entrepreneur should learn organizational policies and practices.
vi. Entrepreneur should seek advice from others
Areas in which people are creative: individuals in organizations can channel their creativity in
seven different ways:
Idea creativity: thinking up a new idea and concept such as idea for a new product or service or
a way to solve a problem
Material creativity: inventing and building a tangible objective such as a product, a report or a
photography
Organizational creativity: organizing people or project and coming up with new organizational
forms or approaches to structuring
Relationship creativity: this is an innovative approach to achieving collaboration, operation and
win-win relationship with others.
Event creativity: producing events such as award ceremony, team outing, annual meetings etc
Inner creativity: changing oneself and being open to new approaches and thinking about oneself
in different ways.
Spontaneous creativity: acting in a spontaneous or spur of the moment such as a witty response
in a meeting and off-give-huff

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Barriers to creativity
Searching the one right answer
Focusing on being logical
Blindly following the rules
Constantly being practical
Viewing play as frivolous
Being overtly specialized
Avoiding ambiguity
Fearing mistakes and failures

Innovation
Innovation is the ability to apply creative solutions to those problems and opportunities, the
identified in other to enhance or enrich people's life. The term innovation is derived from the Latin
word "INNOVARE" meaning make something new.
The modern day understanding of innovation is that is the process of turning ideas into new
opportunities for value creation and putting these ideas into widely used practices.
Innovation is also defined as the successful implementation and exploration of a new idea or
invention. Innovation is the process of taking new ideas effectively and profitably to satisfy
customers' needs.
There are four basic types of innovation:
i. Invention: is the creation of a new product, service and process often one that's noble.
ii. Duplication: is the repetition of an already existing products, services, or process. Duplication
effort however, is not simply copying but it is the addition of entrepreneurs creative touch to
enhance or improve the concept in other to beat competition
iii. Synthesis: is the combination of already existing concepts and factors into a new formulation.
This involves taking a number of ideas or items already invented and find in a way that these ideas
or inventions can form a new application
iv. Extension: is the expansion of a product, service, or process already in existence to satisfy new
needs. Such concepts make a different application of the current ideas.
Principles of innovation

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Potential entrepreneurs need to realize that innovation principles exist that can be learned by
entrepreneurs. The major important principles are as follows:
a. Action oriented: innovators must always be active and searching for new ideas, opportunities
or sources of innovation
b. Make the product, services or process simple and understandable: people must readily
understand how the innovation works
c. Make the product, services or process customer based I.e study customer to identify needs to
develop product I.e the beginning and the end. Innovators must always keep the customers in mind,
the more an innovator has the end user in mind, the greater the chance the concept will be accepted
and used
d. Start small: innovators should not attempt a project or development on a grandeur scale,
innovators should begin small and then build and develop allowing for growth and proper
expansion in the right manner and at the right time.
e. Aim high: innovators should aim high for success by seeking a niche in the marketplace.
f. Try, test and revise: innovators should always follow the rules of try, test and revise. This helps
work out any flaws in the product, process or service
g. Learn from failures: innovations does not guarantee success more importantly, failures give
rise to innovations
h. Follow a mile-stoned every innovator should follow a schedule that indicate milestone
accomplishments
i. Reward heroic activity: this principle implies more to those entrepreneurs involve in seeking
and motivating others to innovate. Innovation activity should be rewarded and given the proper
amount of respect
j. Work, work, work: this is a simple but accurate exhortation with which to conclude the
innovation principles. It takes work not genius or master in to innovate successful.
Sources of innovation
Unexpected events including natural disasters
Act of terrorism, wars etc
Processed need
Industry and market structure
Demography

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 Changes in perception
New knowledge
Innovation management process can be divided into four stages:
This involves scanning the environment for relevant signals indicating
opportunity for change
This involves striving which of the signal to response to base on a strategic
view of how the enterprise can best be developed
This involves acquiring resources to enable the venture to respond to the
identified signals which may be as a result of research and development
Implementing the project, developing both the technology and market in
order to respond effectively.

FEASIBILITY ANALYSIS
This is the process of determining if a business idea is viable. Feasibility analysis is the process of
determining whether or not an idea is a viable foundation for creating a successful venture. A
feasibility report is the comprehensive analysis that is carried out to establish the sustainability of
a venture and it indicates whether the venture is viable, profitable and possible.
The purpose of feasibility analysis is to determine whether or not a business idea is worth pursuing.
If the idea passes the feasibility analysis, the entrepreneur’s next step is to build a solid business
plan for exploitation of the idea. If the idea fails the feasibility analysis, the idea should be dropped
and move on to the next idea.
A feasibility study is not the same as a business plan, both play important but separate roles in the
start-up process. A feasibility study answers the question: "should we continue with this idea?".
The role of feasibility is to serve as filter, screening out ideas that lack the potential for building a
successful venture before an entrepreneur commits the necessary resources to build the business
plan. A feasibility study is primarily an investigation tool that is designed to give an entrepreneur
the picture of market, sales and profit potential of a particular business idea. Feasibility studies are
particularly useful when entrepreneurs are generating multiple ideas for a business concept and
entrepreneurs must filter the main options to the best choice.
Feasibility analysis enables entrepreneur to quickly explore the profitability or practicability of
each of several potential paths for translating an idea into a successful business venture. Sometimes

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the result of feasibility study may show that an idea would simply not be viable business, no matter
how well the idea is organized.
The methodology for conducting feasibility analysis is by describing 4 keys areas:
Product or service feasibility: it is the assessment of the overall appeal of the product/service
been proposed. There are two components to product/service analysis which are:
Product/service desirability: it is the first component to affirm that the proposed product/service
is desirable and could serve and identify need in the marketplace. The following questions are
asked to determine the basic appeal of the product/service.
Does the product make sense?
Is the product reasonable?
Is the product something consumers will want to get interested about?
Does it take an advantage of environmental trends, solve a problem or fill
a gap in the market place?
The proper mindset at the feasibility analysis stage is to get a general sense or the answers to these
questions rather than trying to reach final conclusion. One way to achieve this objective is to
administer a "concept test". A concept test involves showing a preliminary description of a
product/service idea called a concept statement.
Product/service demand: it determines if there is demand for the product/service. There are two
techniques for making this determination.

Administering buying intention survey: it is an instrument that is used to measure customers'

interest in a product/service. It consists of a concept statement or a similar description of a
product/service with a short survey attached. To measure customers’ interest, the number of people
who indicate will definitely buy is typically combined with the number of people who indicate will
probably buy.
Library, Internet and gumshoe research: the second way to access demand for a product or idea
is by conducting library, Internet and gumshoe research which is done because more data is
needed. Evidence that there will be enough demand for the entrepreneur's product or service must
be accumulated through d library, Internet and gumshoe research. Reference librarians can often
point an individual towards resources that will help investigate a business idea. The necessary
information would include: Industry specific magazines, trade journals, industry reports.

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The Internet is a marvelous resource for measuring products or services demand; by simply typing
market demand for female Ankara bags or typing Ankara bags into Google search box,
automatically some articles will come up. Gumshoe research is a detective or investigative search
that scrolls around for info or clues wherever they can be found.
Industry/target market feasibility analysis: this is an analysis of the assessment of the overall
appeal of the industry and target market for the product or service being proposed. An industry is
a collection of firms producing similar or the same products or services. A firm target market is
the limited portion of the industry that the firm goes after with its product or services in order to
satisfy identified needs.
There are two components of industry/target market feasibility analysis: industry attractiveness
and target market attractiveness. An industry varies in term of its overall appeal or attractiveness.
The most attractive industries have some of these characteristics:
Younger rather than older industries
Early rather than late in their life cycle
Fragmented rather than concentrated
Growing rather than shrinking
The top 3 factors are particularly important; other factors that are also important are; the degree to
which environmental and business trends are moving in favour rather than against the industry
example growing population.
Target market attractiveness: most new ventures simply do not have the resources needed to
participate in the broad market rather these new ventures focus on smaller target markets in order
to avoid head-to-head competition with industry leaders. It is also not realistic in most cases for a
new venture to introduce a completely new product idea into a completely new market.
Organizational feasibility analysis: an organization is a socio-technical (human and machines)
unit that is set up to satisfy some identified needs and to achieve specified objectives.
Organizational feasibility analysis is conducted to determine whether a proposed business has
sufficient management expertise, organizational competencies, and resources.
There are two primary issues which are management prowess and resource sufficiency.
Management prowess has to do with the ability of the managers of the new ventures at its initial
stage whether it is the entrepreneur or a team that is managing the entity, in collection of factors
help define management prowess which includes:

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 The passion of the solo entrepreneur
The understanding the entrepreneurs has of the market
Managers with existing professional and personal networks
Resources sufficiency is analysis that is carried out to determine whether the new venture is
capable of obtaining sufficient resources to move forward.
The focus in organizational feasibility analysis is on non-financial resources. The objectives of
organizational feasibility analysis is to identify the most important non-financial resources and
access their availability. Another key resource sufficiency issue is to obtain intellectual property
protection on key aspects of the business (copyrights and patents).
Financial feasibility analysis: it conducts a preliminary financial assessment for a new venture.
The most important issues to consider at this stage are:
Total start-up cash needed: this refers to the total cash needed to prepare a business in order to
make its first sales and the actual budget should be prepared that lists all the anticipated capital
purchases and operating expenses needed to get the business off and running. An explanation of
where the money will come from should be provided
Financial performance of similar businesses: it is the component of financial feasibility analysis
that estimate the finance required for a proposed new venture by comparing the financial
performance to similar existing businesses. This effort will result in approximation rather than
exact figures.
Overall financial attractiveness of the proposed venture: it is associated with the number of
factors that are used in evaluating the financial attractiveness of a new venture, these evaluations
are based primarily on the new venture's projected sales and rate of returns. At the feasibility stage,
the projected return is a judgment call, a more precise proforma statement is computed or estimated
that includes one to three years cash flows, income statements and balance sheet.

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