innovation_entrepreneurship

Innovation vs. Entrepreneurship (The Difference)

I love researching and learning about startup businesses, and when I began attending UMaine I heard about a new program called Innovation Engineering. The tagline for the program centered around developing “Meaningfully unique ideas” and the curriculum is straight from UMaine alumni Doug Hall, founder of the Eureka Ranch. As I began attending classes, I quickly realized that Innovation is much different that Entrepreneurship. It’s my belief that everyone can be an Innovator, yet Entrepreneurs are scarce. Let me explain.

Innovation

Remember that great idea you had? The idea that you “could make millions” off? Put simply, Innovation is centered around creating new ideas. According to the Dictionary, Innovation is:

  • The introduction of something new
  • a new idea, method or device

Innovation focuses on the process, utilizing tools like Mind Mapping, Triz Problem Solving,  and PO Lateral Thinking to create new “out of the box” ideas. These can be used everywhere – many businesses are looking for ways to increase productivity or create a new product to gain a competitive advantage. Innovation is extremely important for many large brands – take a look:

Entrepreneurship

Entrepreneurs are generally referred to by the public as “crazy people who start a business.” According to the Dictionary, Entrepreneurs are:

A person who organizes and operates a business or businesses, taking on financial risk to do so.

The word “entrepreneur” has a variety of definitions – to some, an entrepreneur is a small business owner. To others, an entrepreneur is associated with Steve Jobs, or Mark Zuckerberg; an individual who is changing the way we live our life.

What’s the Difference?

Innovation creates change, but this can be outside the realm of entrepreneurship. I could innovate and cause a change to society (as Ray from the comments points out), but that has nothing to do with starting or growing a business.

I understand that there is overlap between innovation and entrepreneurship, and some people possess qualities to do both, but there is a major difference between innovation and entrepreneurship. It’s important to recognize this distinction.

Delia Smith of Greenfield Ventures says, “If innovation is the creation of new capacities for wealth creation, entrepreneurship is the exploitation of these capacities.”

  • Ray

    “Imagine you have a great idea – an idea that will make tons of cash. You then create the product, and attempt to sell it, only to be shut down. What do you do? What went wrong?

    It’s simple. You are an innovator, not an entrepreneur.”

    ***

    No, you would not be an innovator.

    The phrase “an innovation” refers to a completed change in a system, such as a business, society, or something else. “Innovation” is the process of making that change happen, which indeed requires idea generation but also includes much more than that.

    “To innovate,” or to actively create change in a system, requires that the change must be IMPLEMENTED. It can’t just stay an idea. Thus, if you fail to implement your great idea – as is the case in your example – you have not innovated. You simply had a creative (i.e. innovative – but don’t let the misnomer adjective throw you off!) idea that went nowhere.

    A common misperception is that any person who generates a novel idea is an “innovator.” That is not the case unless the person successfully implements the idea, causing a change to a system.

    Your definition of entrepreneur is fine. Successful entrepreneurship is indeed one form of innovation that relates to business, but not all innovation involves entrepreneurship. For example, if someone started a social movement – a change to the system of society – that would be an example of innovation, but not entrepreneurship.

    • http://www.lukethomas.com/ Luke Thomas

      Hey Ray, thanks for making this clarification. I wrote this article while in college, and the class was all about “innovating” but they trumpeted the class as starting a growing a business. I wrote this out of my frustration.

      I updated the article to reflect this distinction, if you have ideas on how I can improve this, please let me know.