Source: Drucker, Peter F. (1985). Innovative and Entrepreneurship, Practice and Principles. Harper & Row, Publishers, Inc.
Peter Drucker and Innovation
Innovation involves finding a new and better way of doing something. Much of our modern society is based on innovations that have occurred in the past that provide us with the standard of living we enjoy today.
Entrepreneurship and innovation are companion terms. Entrepreneurship involves looking for a new innovation and taking advantage of it.
Drucker's Seven Sources for Innovative Opportunities
Drucker outlines seven sources for innovative opportunities that should be monitored by those interested in starting an entrepreneurial venture. The first four are sources of innovation that lie within the industry. The last three arise in the societal environment.
1. The Unexpected - An unexpected success, an unexpected failure or an unexpected outside event can be a symptom of a unique opportunity.
2. The Incongruity - A discrepancy between reality and what everyone assumes it to be, or between what is and what ought to be, can create an innovative opportunity.
3. Innovation based on process need - When a weak link is evident in a particular process, but people work around it instead of doing something about it, an opportunity is available to the person or company willing to supply the "missing link".
4. Changes in industry or market structure - The opportunity for an innovative product, service or business approach occurs when the underlying foundation of the industry or market shifts.
5. Demographics - Changes in the population's size, age structure, composition, employment, level of education and income can create innovative opportunities.
6. Changes in perception, mood and meaning - Innovative opportunities can develop when a society's general assumptions, attitudes and beliefs change.
7. New Knowledge - Advances in scientific and nonscientific knowledge can create new products and new markets. So, if you are looking for a new business opportunity, monitoring these seven sources may provide you with an innovation opportunity.