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.
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 (example – pulse surveys/OKRs vs. annual performance reviews)
- 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:
- Under Armour has built an “Innovation Lab” to test new products
- Merck CEO says that “Innovation will be key to the drugmaker’s success“
- Proctor & Gamble is using technology and networks to connect and develop innovators outside the company.
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.”