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Innovation isn't inspired by a bright idea, rather it "is organized, systematic, rational work."
Innovation can be mastered and integrated into a company or non-profit organization. ,
Unexpected successes or unexpected failures within an industry often point to opportunity.
Innovative opportunity exists where there is "an internal incongruity within the rhythm or the
logic of a process" or a process need.

Drucker (





 

 

   by management theoretician
Peter F. Drucker) focuses on large-scale entrepreneurship, e.g., aiming to dominate an industry
niche or entire industry, rather than small business management. Drucker discusses innovation,
which he says is both conceptual and perceptual. Perceptual in that you must go out and talk with
your market to learn from it. Drucker's recurring theme is that good entrepreneurship is usually
market-focused and market-driven.

As a great example, Drucker tells us the story of William Conner, a salesman to the medical
industry who decided he wanted to start his own company. Conner went out and spoke with
surgeons about the problems and difficulties the surgeons faced.

While talking with surgeons, Conner learned that the process for cataract surgery was generally
routine and easy, except there was one incongruity making the surgery difficult and unpleasant
for physicians. During the surgery, surgeons had to cut one ligament which involved some risk.

With research Conner learned that there was an enzyme that dissolved this ligament. Conner also
learned that new methods of storage could preserve this enzyme allowing it to be used in
surgery. After patenting his compound, Conner quickly captured a niche market providing his
compound to surgeons performing cataract surgery. No longer did they need to cut the ligament.
They could dissolve it. With process need, the market already exists for the innovation.

This is a relatively low-risk type of entrepreneurship.While process need is a great area of

entrepreneurial innovation. It is also suggested demographics may provide opportunities. Even
though we may know how the population will change in ten years, capitalizing on this change
isn't easy. Further, most entrepreneurs already tend to be focused on a particular industry or
market and large-scale demographic changes wouldn't induce them to change their company's
focus. Plus, there are entrepreneurial opportunities even in declining industries.

Sometimes, there is a dissonance between reality and the perception of reality in an industry.
This may offer innovative opportunities, according to Drucker.
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It is fairly widely acknowledged that there is a very strong connection between the US¶s
economic success and the entrepreneurial character of its people which generates innovations. It
can be plausibly argued that economic success and entrepreneur-driven innovations are bi-
directionally causally linked: each gives a boost to the other in ever widening upward spirals of
mutually reinforcing, positive feedback. It is perhaps difficult figure out which came first: the
economic success or the entrepreneurial character of the people.
India is economically backward relative to the US. The US has solved the basic problem of
survival for most of its 300 million citizens. Food, housing, education, medical care, etc. Its
annual per capita income is around $47,000

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India is a subsistence economy. India is still struggling to provide even the most rudimentary
necessities of life to a majority of its 1,100 million population. India¶s annual per capita income
is around $940, or about 2 percent of the US¶s. That¶s the average in an economy which has high
income disparity. There are an estimated 800 million Indians whose income is less than $2 per
day, and an estimated 500 million with incomes is less than $1 per day.

People who barely eke out a living cannot be reasonably expected to be innovative and
entrepreneurial in the same sense as people who are economically advanced enough to engage in
risky, although highly rewarding, activities.

Of the approximately 300 million Indians who have above $2 a day in income, let¶s assume 10
percent of them have a per capita income which gives them a life-style comparable to the
average American life-style. That means about 30 million Indians have the ability and
willingness to engage in activities that are innovative and entrepreneurial like that of the
Americans. We are therefore now comparing two economies: the US with 300 million and India
with 30 million. That¶s an order of magnitude difference.

  

There are three necessary elements required for any activity: ability, willingness, and
opportunity. Let¶s focus on the opportunity available to the 30 million Indians who have the
ability and the willingness to be innovative and entrepreneurial.

The 30 million Indians exist in an environment which is starkly different from the environment
that 300 million Americans live in. The problems the two societies face are qualitatively
different.
The Indian environment requires implementation of rather well-known solutions. It is a question
of execution and not one of advancing into unknown frontiers. No cutting edge research and
development is required to address the concerns that face India. The answers are well
understood. Execution of the known solutions is sufficient to engage the skills and talents of the
30 million. There are low-hanging fruits and people are busy picking them whenever they are
allowed by the ³colonial´ government.

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The US faces issues that require innovation because all the low-hanging fruits have been picked
long ago. They don¶t need more of anything, only better of everything that they already have.
They all have phones; now they need better phones. They have to push the frontier because most
of their population is at the frontier. They have to be innovative because the next things they
want will be delivered by innovation, not just more of what they already have.

Indians lack the opportunity to be innovative in India because India does not need innovations; it
only needs execution of known innovations. Indians who wish to innovate, have to migrate to an
economy that demands innovation. And they do. The US has more Indian innovators in the US
than India has in India because the demand for innovation is greater in the US.

When will Indian entrepreneurs start innovating as their American counterparts? When India has
stopped being a subsistence economy. And when will that be? That will be when India has
exhausted the available known solutions by implementing them, and therefore become more than
just a subsistence economy. Then the opportunity will exist in India for innovations and that¶s
when the willing and able entrepreneurs of India (whatever their numbers then) will do the thing
that the Americans do so well.