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David Harkins

Dr. David L. Harkins is a social scientist researching the human experience in systems and culture. He is an experienced executive coach and consultant, passionate educator, and keynote speaker. Through his teachings, inspiration, and guidance, he helps individuals and organizations identify and connect with their potential to make a meaningful difference in their communities.

Innovation: The key to entrepreneurial opportunity

Entrepreneurship in the United States is lagging. The United States Bureau of Labor Statistics reports that between 1994 and 2015, the number of new jobs created by start-ups decreased by more than one million (Bureau of Labor Statistics Staff, 2016). Insufficient financial resources, risk aversion, and perhaps the “lack of a good idea” are all possible reasons for the lack of entrepreneurial activity. Some research suggests those without experience in a start-up environment appear to be less motivated by the spirit of enterprise, and within a generation, the inclination to start a business may further decline (Guilles, 2016). Entrepreneurs may well need to gain experience and relevant knowledge by working within a start-up environment. And such an environment is likely to provide a hands-on way to learn financial responsibility and risk management. But, perhaps, more importantly, a start-up environment enables a foundational way of thinking that is rooted in innovation rather than in invention, which is necessary for long-term success.

One does not necessarily need to have a “good idea” to launch a business, a fact that may confuse many prospective entrepreneurs. The entrepreneurial focus is more on planning and execution than on ideas and inventions (Stibel, 2009). Good ideas are easy to come by; it’s the execution of those ideas that prove difficult. Indeed, many entrepreneurs have taken good ideas and inventions and created viable businesses. However, there are far more entrepreneurs who have, through innovation, taken a “second-mover advantage” approach, thereby redefining business models, categories, and even industries for success (Anderson, 2013). Entrepreneurs who, through planning and execution, can improve upon that original “good idea” in a way that increases the value to the customer can reap significant benefits through their innovation.

So what is innovation? For some, “innovation” means to create something new. For others, it means an improved approach or way of doing something. The most modern definition of the word “innovation” itself supports both meanings. Merriam-Webster defines it as: “The introduction of something new; a new idea, method, or device” (Merriam-Webster Staff, n.d.). One might argue these definitions are better suited to the word “invention” or maybe “creativity.” And while invention, creativity, and innovation are closely related, they are not the same.

Creativity, for example, enables an entrepreneur to look at life differently. A creative view may lead to a novel solution or a new invention that helps to overcome some life problems. An improvement to that invention would be considered an innovation. So, creativity fuels invention, which in turn supports innovation. The initial idea and the first application of that idea provide only the foundation on which an entrepreneur can build a business. Growth depends on planning, execution, and continual innovation.

Technological advances that disrupt existing industry sectors, and not new inventions, have driven much of the entrepreneurial growth opportunities in the past twenty-five years. More recently, consider firms like Uber and Airbnb, both of whom have facilitated job creation through innovation (Guilles, 2016). Both companies looked at established sectors—personal transportation services and lodging—and through innovation, transformed each industry’s standard offering to create greater value for the customer. Neither company invented anything; both applied new thinking to present challenges. Innovation, not invention, may provide the fastest and most likely route to entrepreneurial success.

If we look at the Uber and Airbnb examples again, we may see that creativity is present in the approach to overcoming a challenge, but the challenge itself is not new. In the case of Uber: A faster and easier way to get a ride (Uber Staff, n.d.). For Airbnb: A way to create more lodging space in a market where hotel rooms are limited and at a premium (Brown, n.d.). In both cases, the founders of these companies used creativity to solve a personal or life problem through innovation, not with an invention.

In the 1990s, everyone seemed to be starting a business. Many of those businesses were born from advances in technology that encouraged new thinking about how to do things better, faster, and cheaper. From my experience during the dot-com era, I witnessed numerous technology entrepreneurs developing applications to improve processes and procedures that reduced operational costs while improving delivery to the customer. Few of these companies invented anything new; they found a way to improve how things were being done. Innovation, not invention, drove entrepreneurial activity then, just as it has since the Industrial Revolution.

The lack of entrepreneurial activity is potentially a serious economic problem for the United States. Consider that 99% of the 28 million U. S. employers are private small businesses, providing nearly half of all non-government jobs and generating approximately 63% of new non-government employment (Babson College and Goldman Sachs, 2016). Without an active and vibrant entrepreneurial start-up environment, job creation, wages, and government programs supported through tax revenue wane. Some prospective entrepreneurs are waiting for inspiration—that new idea or invention that will make them wealthy. It is true that creativity and invention are often the seeds of entrepreneurship, but it is innovation—improvements on existing ideas and inventions or to business models and industries that provide the greatest entrepreneurial opportunity.

What do you see that needs to be improved? And when will you start?



Anderson, T. (2013, November 4). The Second-Mover Advantage. Retrieved January 21, 2017, from northwestern.edu: https://insight.kellogg.northwestern.edu/article/the_second_mover_advantage

Babson College and Goldman Sachs. (2016). The State of Small Business in America: 2016. Wellesley: Babson College. Retrieved January 15, 2017, from http://www.babson.edu/executive-education/custom-programs/entrepreneurship/10k-small-business/Documents/goldman-10ksb-report-2016.pdf

Brown, M. (n.d.). Growth Studies – Airbnb: The Growth Story You Didn’t Know. Retrieved January 21, 2017, from growthhackers.com: https://growthhackers.com/growth-studies/airbnb

Bureau of Labor Statistics Staff. (2016, April 28). Business Employment Dynamics: Entrepreneurship and the U. S. Economy. Retrieved January 18, 2017, from bls.gov: https://www.bls.gov/bdm/entrepreneurship/entrepreneurship.htm

Guilles, W. (2016, February 17). Kauffman Foundation 2016 State of Entrepreneurship Address. Washington: Ewing Marion Kauffman Foundation. Retrieved January 19, 2017, from http://www.kauffman.org/~/media/kauffman_org/resources/2016/soe/2016_state_of_entrepreneurship_speech.pdf

Merriam-Webster Staff. (n.d.). Definition of Innovation. Retrieved January 19, 2017, from merriam-webster.com: https://www.merriam-webster.com/dictionary/innovation

Stibel, J. (2009, June 30). Are You an Inventor or an Entrepreneur? (Harvard Business School Publishing) Retrieved January 21, 2017, from hbr.org: https://hbr.org/2009/06/are-you-an-inventor-or-an-entrepreneur

Uber Staff. (n.d.). Finding the way: Our trip history. Retrieved January 20, 2017, from uber.com: https://www.uber.com/our-story/

18 thoughts on “Innovation: The key to entrepreneurial opportunity”

  1. David – I appreciate the distinctions you make between creative invention and innovation. I liked that you touched on execution as the primary distinguishing factor in this comparison, as this is an important point for entrepreneurs to remember. The declining rate of start-up businesses is a fascinating conundrum, and poses questions about the future of innovation in relation to the current business climate. It begs the question: how can we, as a country, get people innovating again? What are the barriers that prevent them from innovating, and how can that be remedied?

  2. David, great blog post! I like how you broke down the variations between creative invention and innovation. There are so many questions to ask about why is entrepreneurship declining? And, I can’t wait to continue to follow your blog to see what insights you may have. Being better, faster, cheaper are all points on why new businesses emerge and do well. Like, your Uber example — really who thought of this? LOL! Netflix, itunes, etc. are great examples of what we used to do vs what we do now quicker with technology. I love sending cards and gifts, but going to the store buying those things take time, then you have to go to the post office and mail said items. Well, the company SendOutCards have created a way I can do that right from my computer and it’s awesome!!!! Check out my site at http://www.sendoutcards.com/savvytech I do my appreciation marketing for my small business through sending cards and gifts!

  3. Thanks, Jeanette. We often get creativity and innovation confused. In the most simple terms, I think creativity allows us the freedom to innovate. I, too, was surprised by the statistics on declining entrepreneurship. I am not yet sure as to the best way to approach and encourage innovation. My friend, Louis Forman, runs a company here in Charlotte called Enventys Partners. Enventys Partners is a product development firm, but it is the primary company behind Edison Nation which encourages invention and innovation for companies by licensing inventions. This is a step in the direction, I think. I believe before we can determine how to “make entrepreneurship cool again” we have to get at the root of what slowed it down. I have not researched it, but my guess is a slowdown in the economy. Many innovative entrepreneurial companies are bootstrapped while the entrepreneur holds down another full-time job. If the economy is weakened, the entrepreneur may not have the time (due to working more hours, or multiple jobs), or the money (due to stagnant wages, or higher priced basic products) to invest in an entrepreneurial venture.

  4. Thanks, Christina! I will try to look at some of those reasons for declining entrepreneurship in upcoming posts. Like you, I am a big fan of handwritten notes. I am aware of the technology tools, but I have not used them. So far, I am still sending them the old-fashioned way–written with my hand. :) By the way, In The Pursuit of Wow, Tom Peters calls out handwritten thank you notes as a major way to “innovate” in the customer engagement process! It seems few people write them. Do you think this (a handwritten note) is a real innovation or a creative application of a process?

  5. David,
    Your post brought to mind a conversation I had with a glass blowing artist. The topic of “original” art work arose. Much like music and history, art has a way of repeating itself. As she thumbed through pictures of my portfolio, I explained how I did not feel like an artist at times because my concepts were not original. Someone somewhere has already painted nature. She laughed and nodded understandingly. She brought up a local artist in Asheville who could sell his glass for thousands and yet, other glass artists who employ many of the same techniques sell their work for hundreds. She said it came down to his innovation of his product. To better explain this artist, he used to make several various pieces until one day the consumers grew fond of one particular piece because of a part that took on the shape of a wave. He began to produce these more consistently. The demand grew. He then trademarked the design feature and….Voila! He is now known in the glass scene as the man who makes “the wave piece”. To keep himself fresh and the demand on his product, every couple of years he tweaks the design and creates a demand for new pieces. So, like you mentioned in your post, it isn’t always about being the first one to have the idea but about being the first one to make it work for you and the consumer.
    Thank you for this post and you truly have a well put together blog. I look forward to reading more!

  6. David,
    I agree with the ladies before me. Your explanation actually gave me some clarity because I assumed that creativity and innovation were one in the same. In regards to why entrepreneurship has slowed I have to disagree will Guilles. I do not believe that there is a lack of good ideas, instead people are actually more gun shy to pull the trigger. As you stated in the nineties there was huge in influx in the dot com industry but only a few years later there was also a large draw down. Majority of workers prefer job security over job satisfaction. For instance one might really hate their low paying job but they will stay in that position for the sake of maintaining income. I see this every day in higher education. Living costs are rising and even going back to school is a huge risk because of financial commitment. Like Uber and Airbnb many entrepreneurs are trying to be innovative instead of creative because of costs and lack of outside investment. I will say shows like “Shark Tank” have encouraged many entrepreneurs to dust off their closeted inventions or revisit their innovative ideas.

    As far as what needs to improve I think we have to instill confidence in the potential entrepreneur. Most people want to know that their idea will be a sure thing with little to no risk but unfortunately there’s no way to tell. You can have a great business idea and put it out at the wrong time and not do as well. Yet you can wait a couple years and put out the very same product or service and have astronomical results. It’s not that the idea wasn’t profitable it just had to do with timing. Being an entrepreneur you have to be willing to ride the ebb and flow of your chosen market. Each market has product (service) life cycle which goes from introduction, growth, maturity, and decline. One cannot not get discouraged in the decline because their product/service has the potential to roll back if they can be innovative and stick with it.

  7. Hello David,
    I was surprised to hear that entrepreneurship was lagging in the USA. I wonder if you looked at those statistics by industry if it would be different. Where I teach there are numerous students intent on opening their own businesses. With the explosion of “healthy eating” and the “informed” guest there seems to be many opportunities for the entrepreneur. Have you seen any research about whether the concept of entrepreneurism is being introduced into the public school system?

  8. Christina and David,
    I checked out the site you suggested and yes it looks easy but I prefer handling it all myself. I do not believe the handwritten note is innovation or a creative application of a process. In my family, it is considered good manners. I enjoy picking out the card or stationery for the individual I am sending the note. It is the actual handwriting of the note which I believe is very appreciated by the receiver and I enjoy being able to personalize it. You both might find this very sad if you appreciate the handwritten note, they no longer teach cursive in school anymore. I only found out a month ago when I was trying to teach someone how to write happy birthday in chocolate. “Chef, they do not teach us cursive.” Boy, did I feel old. I wonder what Tom Peters would say to that, probably that we should use http://www.sendoutcards.com/savvytech
    Enjoyed both your posts very much.

  9. You are absolutely correct! It’s not always who is in the market first, it is so often who creates a better way to serve the customer. Or in the case of your example above, one who consistently revises and tweaks a design to create ongoing demand among core customers. Knowing what our customers want is a key component of innovation. Then we must figure out how to consistently deliver and improve upon how and what we deliver.

    Thanks for your kind words on the post. I enjoy putting the time and effort into the process of creating the posts.

  10. You may well be right about prospective entrepreneurs being more deliberate in the timing of their decisions. Certainly when the economy is bad people may be more risk adverse. Still, one might argue that even in a weak economy part-time entrepreneurship could be booming. And that does not seem to be happening either. I would argue it is a combination: people are both risk adverse and think they lack that “good idea” to get things going. To your point, Shark Tank has likely helped get people to dust off ideas and inventions, but how many times have we hear the Sharks tell an entrepreneur that they don’t have a valid opportunity, or that the “entrepreneur” is an inventor and not a business person. I think this is one of the key points.

    I don’t disagree that an entrepreneur must “go with the flow” and perhaps pivot as the marketing and opportunity changes. This is where the true value of innovation comes into play.

  11. Hi CeCe,

    I have not seen the concept of entrepreneurship being introduced into the public school system. However, I have not researched the topic. I do recall from own experiences that entrepreneurship was an outside thing in the 1970’s and 1980’s. The organization, Junior Achievement, was the vehicle for such things. I think this is something that I will look into a little further and I appreciate your thoughts on it.

    I, too, have noticed the growth in healthy eating and that’s the general area of where my next entrepreneurial venture will be.

  12. I have heard that cursive is no longer a skill that schools teach. This is really sad, I think. Handwriting is an important skill. Of course, when I first went to college back in the early 80’s, my “graphic design” class had a big focus on calligraphy and hand-lettering. Computers were just coming into the classroom then. In fact, I also had “computer graphics” class wich involved writing code for the APPLE IIe to generate a graphic on the screen. How times have changed.

  13. I doubt that people have changed. I think the change is more due to outside influences. In those crazy dot com days there was tons of cash everywhere (eToys anyone?). Now a VC isn’t interested in funding anything until later rounds and puts in more cash per company in fewer companies. And the hope of having a big IPO is far less reasonable. Sure lots of people get “bought out” by a Facebook or a Google but they don’t become a FaceBook or Google. Many folks blame those 2 companies for the lack of innovation since they sop up new ideas into their companies before the new company can challenge the status quo. Look how AI companies have been bought up by both of them. What if those companies grew like Uber? Would they have outGoogled Google? Amazon too is worthy of blame. Whenever someone has a successful company (diapers, shoes and Zappos) they buy up the company.

    That may be about to change. Snapchat is about the first big IPO since Uber. We know how unique Uber is since it is challenging Google in terms of driverless cars (and now driverless private planes???). Snapchat may be the star that inspires entrepreneurs to see potential success beyond a quick sell out to Google (and then watch the brightness of the star fade).

    And I don’t think it is about money (IPO vs. being bought out). Bill Gates, Jobs, Zuck and Bezos are inspirational figures. Who is inspiring now?

  14. I’m not so sure. Remember, entrepreneurial activity is not limited to the tech sector, VC funding, or big IPOs. A good many new businesses are started by someone who takes a skill, say as an auto mechanic, and turns that into a business venture. That’s the entry-point of entrepreneurship for most…”What do I know and how can I make a living doing it?” Given the state of the economy, I would argue that people are more risk-adverse. They may do this work on the side while holding down a full-time job, but they will not likely formalize the “business” in a way that gets reported as a business (e.g., a business license). They are not likely to leave a job and a steady paycheck to start a business.

    I would agree that the business world is lacking inspirational figures these days, but I don’t agree that it has to be someone in the tech field like a Gates, Jobs, or a Bezos. Elon Musk comes to mind as one for me. Although he made his fortune in the tech field, he is using that influence to affect change in other sectors. I find that to be inspirational.

  15. A good point. For situations where one is making a smaller change, it does probably make sense to not burn one’s bridges. And in an economy that is as fragile as ours any risk is a big risk.

  16. The idea of making something better is always lurking…we can’t escape it. People tend to shy away from making a better service out of one that already exists. Lyft was the first company to start offering people rides in personal vehicles, then Uber followed…but both are wildly successful, having taken on the government to create new regulations to allow companies like these two to exist. Neither one of these companies started out as a taxi-ish company. Lyft was once known as ZimRide and offered rides to-and-from places for people who needed to travel long distances. Uber was a limousine service. They both saw this need in the marketplace and acted on it. It seems like innovation is the way to go, in a technologically driven society, more so than invention. Great post!

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