For Peter Drucker, in Innovation & Entrepreneurship (IE) focus is not on entrepreneurial psychology or traits but on action and behavior. It is a purposeful task that needs to be organized systematically.

Context of IE

When Peter Drucker wrote about IE in the mid-1980s (Innovation and Entrepreneurship Principles and Practices, 1985), America employed Ten (10) million more people than had been predicted. Its dynamic was headed toward a primarily entrepreneurially inspired, innovative business culture. There was an abundance of young risk-takers willing to endure the ruthlessly long hours required by entrepreneurial opportunities, mainly because of the potential success they offered. At the same time, a big business dominated the corporate world and benefitted from a highly loyal workforce.

Incorporating innovative ideas in business quickly became a highly esteemed management goal worthy of great effort. Corporate executives required their people to learn the disciplines of innovation and entrepreneurship, and Peter Drucker became their teacher.

Drucker’s ideas were the panacea for institutional giants of his time, and the business climate of the 80s was ripe for adopting them. In this context, he treated innovations and entrepreneurship in the “new entrepreneurial economy” as practices. These decisive duties could be controlled best in a systematic work environment.

What is the meaning of innovation?

Peter Drucker viewed innovation as the tool or instrument used by entrepreneurs to exploit change as an opportunity. He argued that innovation, as a discipline, is capable of being learned as well as practice. While he never agreed to a theory of innovation, he knew enough to develop it as a practice based on when, where, and how one looks systematically for (innovative) opportunities and how one judges the chances for success or the risks of their failure. (Drucker: 1993) 

From Drucker’s perspective, systematic innovation consisted of the purposeful and organized search for changes and the systematic analysis of the opportunities such changes might offer for economic or social innovation.

What do you understand by Entrepreneurship?

An entrepreneur is an Individual who owns a firm, business, or venture and is responsible for its development. Entrepreneurship is the practice of starting or reviving a new or existing business to capitalize on new opportunities.

Generally, entrepreneurship is a challenging proposition as many new businesses fail to take off. Entrepreneurial activities differ based on the type of business they are involved in. It is also true that entrepreneurial ventures create many new job opportunities.

Entrepreneurship involves being resourceful and finding ways to obtain the resources required to achieve the set objectives. Capital is one such resource. Entrepreneurs need to think outside the box to improve their chances of getting what they need to succeed. (Liikkanen: 2010)

According to management experts, most entrepreneurs desire to control their own life, and they can’t find this beyond entrepreneurship. Studies have demonstrated that people derive great satisfaction from their entrepreneurial work.

In the United States, an entrepreneur is “one who starts his own new and small business.” However, Drucker noted that only some new small businesses are entrepreneurial or represent entrepreneurship. Also, only some entrepreneurial businesses are innovative.

Drucker identified entrepreneurs as people who see “change” as the standard, echoing | Heraclitus of Ephesus, the Greek philosopher who said, “The only constant in life is change.” Entrepreneurs regard change as essential and welcome it as beneficial to the lives of big corporations and small businesses alike.

However, the kind of change implied here, Drucker clarified, is typically different from the kind that can be brought about simply by deciding to create it. Instead, it is created by entrepreneurs who actively seek the existing change to exploit it.

IE is designed to provide guidelines on how entrepreneurs can become innovative. The guidelines provided by Peter Drucker are:

  1. Innovative practice,
  2.  Entrepreneurship practice and
  3.  Entrepreneurial strategies

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