1. Creativity, Innovation and Entrepreneurship
A. “The Genesis of Entrepreneurship: Change, Innovation, and Creativity”
(Summary) There is an observed fragmentation in entrepreneurship (as a field of study) due to a lack of a theoretical framework that integrates distinct but overlapping key concepts related to entrepreneurship. Among them are change, innovation and creativity. Research on these concepts has largely gone on independently without exploring important relationships among them within the broader framework of entrepreneurship. One such framework is as follows: “entrepreneurship is enabled by (a) the current or potential existence of something new (an innovation), (b) which may have been developed by new ways of looking at old problems(creativity), (c) or the lessened capability of prior processes or solutions to respond effectively to new problem parameters brought on by new or emerging external conditions (environmental change), (d) and which can supplant or be complementary to existing processes or solutions (a change), (e) when championed by one or more invested individuals (the innovator)”. As expressed in the mentioned framework, opportunities for innovation arise from environmental change such as “economic recession, explosive industrial growth, technological breakthroughs and industry-wide restructuring”. The imbalance that such environmental changes create provides enterprising individuals or firms the impetus to innovate and exploit innovations for gain or advantage. Innovation, as a process, is itself a kind of change that meets certain criteria: it must be something new and it must be an improvement. The resulting innovations (i.e. the outcome of the innovation process) may be incremental or radical (i.e. a departure from the current conventions). Classically, it is only the radical innovations and their exploitations that are considered as entrepreneurial events. However, there are some arguments that support the inclusion of incremental innovations as well. The bridge between opportunity (arising from environmental change) and innovation is creativity. “Creativity is the process through which invention occurs; that is, creativity is the enabling process by which something new is created.” It is a function of skill, knowledge, intensity and availability of resources. In this view, creativity can be thought of in terms of a continuous spectrum (i.e. degree of “creativeness”), rather than something that an individual or firm either possess or not. The end or goal of the entrepreneurial process is the entrepreneurial event; that is, the exploitation or commercialization of the innovation. What defines an entrepreneurial event is not the degree of creativity in the innovation but what happens to it. The adaption of an innovation “in order to copy competitors – and hence to avert, not undertake, risk –“does not qualify as an entrepreneurial event; the introduction of an innovation (e.g. a new product or service) into the market does.
(Reaction) The model introduced by the article is both insightful and informative. It provides a coherent framework where entrepreneurship and the interaction among its various components can be analyzed and understood. However, the model seems to suggest that the entrepreneurial process proceeds from a state of imbalance or disequilibrium. While this can be true, it is not always the case. As has been argued by Schumpeter, the converse can be true. The entrepreneurial process can in fact be the cause of the disequilibrium. That is, entrepreneurial activity, though encouraged by a dynamic, imbalanced environment, does not rely on it. As a radical innovation can arise entirely from the curiosity and creativity of the human mind, so can the entrepreneurial event that exploits it. In this sense, there is not a casual but merely an incidental relationship between environmental change and entrepreneurial activity. Perhaps, the key here is the realization that it is creativity that makes possible/enables/drives entrepreneurship and creativity is innately human. It may be awakened by external forces but not created and it can just as easily awaken on its own. The creative process and outcome cannot simply be derived or deduced from an external cause through a series of logical steps because by nature, it constitutes a leap, a break, a departure (no matter how small) from its current context. It is the faculty that allows the human person to be an active participant (i.e. creator/shaper) in his world. So conceptually, it may be helpful to think of the entrepreneurial process as cyclical and expansive instead of linear; cyclical in the sense that the interaction between (environmental) change and entrepreneur event is bidirectional and mutually reinforcing and expansive in the sense that each cycle/iteration expands the realm of what is possible.
B. “Creativity and Entrepreneurship: Potential Partners or Distant Cousins?”
(Summary) Research on creativity and entrepreneurship has often originated from different disciplines and has largely left the relationship between the two unexplored. Both have multiple contested definitions and ongoing research programs. One definition of creativity is “the capacity to produce novel or original work that fits with task constraints.” What enables this capacity, as argued by confluence theories on creativity, is the interplay of various factors such as “task motivation, domain-relevant skills and creativity-relevant skills”. On the same vein (that creativity is multi-factored), it has also been expressed as a product of six distinct resources: intellectual abilities, knowledge, styles of thinking, personality, motivation and environment; the necessary intellectual abilities being synthetic, analytical and practical-contextual thinking skills. As a process creativity has been thought of as problem finding, problem formulation, problem redefinition and problem solving. Another trait that has been observed to be closely linked to creativity is the ability to combine and relate previously unrelated frames of reference. It is also widely held that context and situation significantly influence creativity. Studies have identified “challenging work, work group supports, organizational encouragement, supervisory encouragement, freedom and sufficient resources” as stimulants of creativity. Unlike creativity (which has been linked to psychological characteristics), some studies have concluded that “no psychological or sociological characteristics have been found” to predict whether someone will “become an entrepreneur or excel at entrepreneurship” As a process, entrepreneurship includes all the steps from “initial conception of rough business idea” to termination or establishment of “a business venture with regular sales”. It has been thought to be composed of two related sub-processes: discovery and exploitation. Discovery includes “idea generation, opportunity identification, opportunity detection, opportunity development and opportunity refinement” while exploitation includes “efforts to legitimize the start-up, efforts to acquire resources, efforts to combine and coordinate these resources through the creation of a functioning organization, and efforts to generate demand through marketing and contacts with prospective customers”. It worth noting that discovery and exploitation can occur in parallel and can even be iterative. Studies have identified two primary predictors of entrepreneurial tendency (i.e. likelihood that someone will be an entrepreneur): “previous start up experience” and “being a member of a business network”. This leads to the conclusion that most people can become successful entrepreneurs given “an opportunity that suits them” and “in interaction with people with complementary skills”. As evident from the prior descriptions, creativity and entrepreneurship are both concerned with the creation of novelty and value (with creativity being generic and entrepreneurship being specific to business), which is often characterized by the different way its agent looks at and thinks about things (i.e. “out of the box”, divergent). As such, “both entrepreneurship and creativity benefit from depth of knowledge or expertise and both are not limited by this existing knowledge, and challenge and extend previous expertise in developing new ideas, processes and application.” Furthermore, both creativity and entrepreneurship are closely linked to innovation and the similarities between “problem finding or problem definition”, and “opportunity finding or opportunity recognition” relate the two even more. However, creativity differs from entrepreneurship, in so far as creativity is “an input and a process” while entrepreneurship is “a process and an outcome”. In conclusion, creativity is a crucial component of entrepreneurship and therefore an organization that seeks to develop its entrepreneurial capacities (to identify and create value) must encourage and incorporate creativity and the creative thinking process in multiple levels of the enterprise.
(Reaction) The article appears to suggest two important points: 1) the entrepreneur seeks to create something novel and valuable by recognizing and exploiting opportunities in his environment, and 2) entrepreneurship is a creative process and the entrepreneur is a creative agent; the latter serving as the theoretical basis of the former. However, there appears to be a contradiction or at least an insubstantial connection between the two. Being a creative agent, the entrepreneur must not only seek to recognize opportunity but create it. Simply recognizing opportunities seems to be a weak expression of creativity. However, this apparent contradiction disappears if it is realized that opportunity is potential and therefore, to recognize it is to create it. An unrecognized opportunity is a non-existent one. To recognize it for the first time is to see what was not there before and is therefore to bring it to existence. This especially true if we start from a state of equilibrium. For clearly there cannot be potential that can come from the system itself if it is in a state of equilibrium unless it is introduced from outside the system by an agent. Thus, the entrepreneur who recognizes opportunity from this current state of affairs (i.e. the “quiet” equilibrium) is in fact creating it and in doing so disrupts the system and brings it to a state of disequilibrium. Upon which the cyclical and expansive nature of entrepreneurship can takeover and become the force that 1) drives the system to grow, and 2) sustains this growth (hopefully, towards progress not only in the economic sense but in the sense of advancement of the human society in all its dimensions).
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