Innovation & Eterpreneurship

PETER F. DRUCKER INNOVATION AND ENTREPRENEURSHIP
Practice and Principles

Contents

Preface Introduction: The Entrepreneurial Economy I.

vii 1 19 21 30 37 57 69 76 88 99 107 130 133 141 143 147 177 188

THE PRACTICE OF INNOVATION

1. Systematic Entrepreneurship 2. Purposeful Innovation and the Seven Sources for Innovative Opportunity 3. Source: The Unexpected 4. Source:Incongruities 5. Source: Process Need 6. Source: Industry and Market Structures 7. Source: Demographics 8. Source: Changes in Perception 9. Source: New Knowledge 10. The Bright Idea 11. Principles of Innovation II.

THE PRACTICE OF ENTREPRENEURSHIP

12. 13. 14. 15.

Entrepreneurial Management The Entrepreneurial Business Entrepreneurship in the Service Institution The New Venture
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CONTENTSIII.

ENTREPRENEURIAL STRATEGIES

207 209 220 233 243 253 267 269

16. “Fustest with the Mostest” 17. “Hit Them Where They Ain’t” 18. Ecological Niches 19. Changing Values and Characteristics Conclusion: The Entrepreneurial Society Suggested Readings Index About the Author Books by Peter F. Drucker Credits Copyright About the Publisher

Preface
This book presents innovation andentrepreneurship as a practice and a discipline. It does not talk of the psychology and the character traits of entrepreneurs; it talks of their actions and behavior. It uses cases, but primarily to exemplify a point, a rule, or a warning, rather than as success stories. The work thus differs, in both intention and execution, from many of the books and articles on innovation and entrepreneurship thatare being published today. It shares with them the belief in the importance of innovation and entrepreneurship. Indeed, it considers the emergence of a truly entrepreneurial economy in the United States during the last ten to fifteen years the most significant and hopeful event to have occurred in recent economic and social history. But whereas much of today’s discussion treats entrepreneurship assomething slightly mysterious, whether gift, talent, inspiration, or “flash of genius,” this book represents innovation and entrepreneurship as purposeful tasks that can be organized—are in need of being organized—and as systematic work. It treats innovation and entrepreneurship, in fact, as part of the executive’s job. This is a practical book, but it is not a “how-to” book. Instead, it deals withthe what, when, and why; with such tangibles as policies and decisions; opportunities and risks; structures and strategies; staffing, compensation, and rewards. Innovation and entrepreneurship are discussed under three main headings: The Practice of Innovation; The Practice of Entrepreneurship; and Entrepreneurial Strategies. Each of these is an “aspect” of innovation and entrepreneurship ratherthan a stage. Part I on the Practice of Innovation presents innovation alike as purposeful and as a discipline. It shows first where and how the entrepreneur searches for innovative opportunities. It then discusses the
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PREFACE

Do’s and Dont’s of developing an innovative idea into a viable business or service. Part II, The Practice of Entrepreneurship, focuses on the institutionthat is the carrier of innovation. It deals with entrepreneurial management in three areas: the existing business; the public-service institution; and the new venture. What are the policies and practices that enable an institution, whether business or public-service, to be a successful entrepreneur? How does one organize and staff for entrepreneurship? What are the obstacles, the impediments, thetraps, the common mistakes? The section concludes with a discussion of individual entrepreneurs, their roles and their decisions. Finally, Part III, Entrepreneurial Strategies, talks of bringing an innovation successfully to market. The test of an innovation, after all, lies not its novelty, its scientific content, or its cleverness. It lies in its success in the marketplace. These three parts...