Unit 2: Creativity and

Innovation for
Entrepreneurship 4 LHs
Dr. Bir Bahadur Karki
Associate Professor
FOM, PN Campus TU

11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 1

Unit 2: Creativity and Innovation for
Entrepreneurship 4
LHs
• Creativity: components of creativity, creativity
techniques.
• Innovation: incremental versus disruptive innovation,
sources of innovation, process of innovation: prompts,
inspirations and diagnoses, proposals and ideas,
prototyping and pilots, sustaining, scaling and
diffusion, and systemic change.
• Linking creativity, innovation, and entrepreneurship.
11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 2
 Creativity

• Concept of Creativity:- Creativity is the production of novel,

valuable, relevant, and useful ideas (Amabile,1988), and
creativity may involve meaningfully recombining existing
ways (Oldham &Cummings, 1996) or doing something for the
first time anywhere by creating something entirely new
(Woodman, Sawyer, & Griffin,1993). All of us know people
with high creative talent: scientists, artists, writers/authors,
performers, poets, inventors, chorus, musicians, and so on.

11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 3

 Components of Creativity
Creativity is the ability of generating original and useful ideas.
It is the process of creating new product i.e. goods or services
which are new for the organization or new for the market. It is
the ability to develop new and unique ideas appropriate and
actionable to implement in the business. Creativity has
following three components:
1. Skills for creativity thinking
2. Knowledge
3. Motivation
11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 4
 Creativity Technique
1. Problem reversal:-
• State the problem in reverse
• Explore what others are not doing
• Change the directions or location of perspective, and
• Turn defeat into victory

11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 5

2. Forced analogy or forced
relationship
Attribute of a matchbox Analogy with the corporation

Striking surface on two sides The protection on organization

needs against strikes

Six sides Six essential organizational divisions

Sliding center section The heart of the organization should
be slidable or flexible
Made of cardboard Inexpensive method of structure,
disposable
11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 6
 3. Attribute listing
Project: Improving Torch Light

Features Attributes Ideas for

Improvement
Casing Plastic Metal
Switch On/Off On/Off low beam
Battery Power Rechargeable
Bulbs Glass Plastic
Weight Heavy Light

11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 7

 Creativity Technique
4. Mind maps
5. Brainstorming :-
• Suspend judgement
• Think freely
• Encourage people to build the ideas of others
• Quantifying the ideas
11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 8
 Factors Affecting Creativity
1. Encouragement of creativity:-
• Organizational level encouragement;
• Supervisor level encouragement; and
• Workplace cooperation/composition
2. Autonomy
3. Work load and pressure
4. Adequacy of resources
5. Mental blocks: Prejudice and Functional Fixation
11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 9
Definition of Innovation
Innovation is the process of creating something new,
which is central to the entrepreneurial process (W. J.
Baumol, 2011). Innovation refers to the successful
introduction of new outcomes by a firm (Barringer &
Ireland, 2015). Innovation is the transformation of
creative ideas into useful application. It is doing
something new. It is the process of taking a creative idea
and turning it into a useful product, services or work
method.
11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 10
Innovation Process

Transformation of
Creation of new Result in new
an idea or
Knowledge through products, services
resources into
invention or prcocess
useful applications

11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 11

Types of Innovation
Types of Innovation

Invention

Extension

Duplication

Synthesis

11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 12

Categories of Innovation
1. Incremental Innovation: Improvement of existing products. Extension
,Duplication, Synthesis
2. Disruptive Innovation: Radical innovation= Cheaper, faster, Last
Longer, More efficient, Of a high quality
3. Cost Innovation: Value conscious customer

11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 13

Incremental versus Disruptive
Innovation
Incremental Innovation Disruptive Innovation
1. Steady improvement 1. Fundamental rethink
2. Based on sustaining 2. Based on disruptive
technologies technologies
3. Obedience to cultural routines 3. Experimental and play/make-
and norms believe
4. Can be rapidly implemented 4. Need to be nurtured for long
periods
5. Immediate gains 5. Worse initial performance,
potential big gains
6. Develop customer loyalty 6. Create new markets

11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 14

Sources of Innovation

A . Sources of B . Sources of Innovation

Innovation within in the social Environment
Companies or Industries
1. Unexpected 1. Demographic changes
occurrence
2. Incongruities 2. Perceptual changes
3. Process needs 3. New knowledge
4. Industry and market
changes
11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 15
 The Process of Innovation
Steps of Innovation
1. Prompts, Inspirations and Diagnoses
2. Proposal and Ideas
3. Prototyping and Pilots
4. Sustaining
5. Scaling and Diffusion
6. Systemic Change
11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 16
Linking Creativity, Innovation and
Entrepreneurship

Innovation
-Refining, evaluation and first
materialization of the new ideas.
-evaluation of opportunities
-output: Prototype, patent, business
plan

Creativity
-Production of new and useful ideas
Discovery of opportunities
Output new ideas

Entrepreneurship
-Gives birth to new ideas
-New manufacturing process
-New product and services
-Exploitation of opportunities
-Identifies new sources of raw materials.
-Develop new combination of means of
production
-open new markets for creation of value
-New organization structure.

11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 17

Linking Creativity, Innovation and
Entrepreneurship
Entrepreneurship
-Gives birth to new ideas
-New manufacturing process
-New product and services
-Exploitation of opportunities
-Identifies new sources of raw materials.
-Develop new combination of means of production
-open new markets for creation of value
-New organization structure.

Innovation
Creativity
-Refining, evaluation and first materialization
-Production of new and useful ideas
of the new ideas.
Discovery of opportunities
-evaluation of opportunities
Output new ideas
-output: Prottoype, patent, business plan

11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 18

Linking Creativity, Innovation and
Entrepreneurship
A. Creativity
• -Production of new and useful ideas
• -Discovery of opportunities
• -Output new ideas
B. Innovation
• -Refining, evaluation and first materialization of the new ideas.
• -Evaluation of opportunities
• -Output: Prototype, patent, business plan
11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 19
C. Entrepreneurship
• -Gives birth to new ideas
• -New manufacturing process
• -New product and services
• -Exploitation of opportunities
• -Identifies new sources of raw materials.
• -Develop new combination of means of production
• Open new markets for creation of value
• -New organization structure.
11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 20
• Latest science and technology and needs in society and
in the marketplace is the output of innovation.
• Entrepreneurship push by technology and pull by market.
• Difference between An opportunity and An Idea
It is important to understand that there is a difference
between an opportunity and an idea. An idea is a
thought, an impression, or a notion. An idea may or may
not meet the criteria of an opportunity.
11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 21
 Difference between An opportunity
and An
Idea
• This is a critical point because many entrepreneurial
ventures fail not because the entrepreneurs that
launched them didn’t work hard, but rather because
there was no real opportunity to begin with. Before
getting excited about a business idea, it is crucial to
understand whether the idea fills a need and meets
the criteria for an opportunity.
• Essentially, entrepreneurs recognize an opportunity
and turn it into a successful business.
11/26/2024 Associate Professor Dr. Bir Bahadur Karki, FOM, PN campus, TU 22