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Innovation and Entrepreneurship
by P. F. Drucker . Published by William Heinemann, 1985.
Innovation and Entre preneur ship is not one of those books consisting of stories of individuals who have founded a new business. It is a book that presents innovation and entrepreneurship as purposeful tasks that are in need of being organized as systematic work. It is a practical book that deals 'with such tangibles as policies and decisions; opportunities and tasks; structures and strategies; staffing, compensation, and rewards'. The topic is looked at from three points of view and the book is divided into three parts that deal with each aspect. Part I, Practice of Innovation, first shows where and how the entrepreneur searches for innovative opportunities and then goes on to discuss the 'do's and don'ts' of developing an innovative idea into a viable business and service. Part II, The Practice of Entrepreneurship, deals with the entrepreneurial management task. It deals separately with the existing business, the new venture and the public-service institution. There is a section on the individual entrepreneur. Part III, Entrepreneurial Strategies, shows that the test of an innovation lies in its success in the market. The test of an innovation is not in 'its novelty, its scientific content, or its cleverness'. Throughout the exposition Drucker illustrates both the right and wrong policies and practices by writing about actual events in real enterprises. Part I To be entrepreneurial, a business must create something new or different and transmute values. Among the examples of enterprises that Drucker gives is the changing of American hospitals into 'treatment centres' for specialized needs. So, clearly, entrepreneurship should not be identified with the new, small business. The entrepreneur is one who 'searches for change, responds to it, and exploits it as an opportunity'. It is based on 'purposeful innovation'. Innovation is an act that gives something economic value. The term 'innovation' must be understood as an economic term or social term; an innovation does not have to be technical but it does have to increase the yield of resources or change the value and satisfaction obtained by the consumer. The sources of innovative opportunity are: the unexpected success or the unexpected failure or outside event; the recognition that reality and the way things...