The Link Between Innovation and Value
An early and fundamental theory of entrepreneurship developed by Schumpeter considers innovation and growth a result of entrepreneurship (McCraw, 2007; Schumpeter, 1936). Similarly, Drucker (1984) considered innovation as means, by which entrepreneurs exploit change as an opportunity for a different business or service. More recent viewpoints, such as the creative industries and entrepreneurs are often addressed in relation to their contribution to innovation and their innovative capacities (Wijngaarden et al., 2019a).
The concepts of market orientation in innovation practices and its interdependence with business success has been explored from different perspectives for establishing understanding of the influence of the customer/user in the innovation process. User oriented design and user engagement offer in important input to the success of innovation of products and services and is an effective way for competitive advantage and value creation. Value of any product or service is comprehended and defined by the customer/user in the situation of product/service use, also called value-in-use (Siakas & Siakas, 2016).
In business, it is important to demonstrate the value of a product, service or a solution for the customer or user (Camlek, 2010). Innovation, defined by Chesbrough (2003, 2006, 2007) as an invention implemented and taken to market with the intention of bringing strategic and competitive advantage, is increasingly seen as the main vehicle for value creation. Trott (2008) states that innovation includes all the activities involved in the process of idea generation, technology development, manufacturing and marketing of a new (or improved) product or manufacturing process or equipment. Hence, it is not a single action but a total process of interrelated sub processes. Wijngaarden et al. (2019a) studied 34 Dutch creative entrepreneurs. They agreed with Trott (2008) concurring that an innovation is something completely new or a continuous recombination of new and existing elements; an innovation is a contribution to society.
Chesbrough and Rosenblom (2002) assert that companies can capture value from new technology in two basic ways, namely through incorporating the technology in their current businesses or through launching new ventures that exploit the technology in new business areas. Chesbrough & Crowther (2006) suggest that instead of relying entirely on internal paths to market, companies should look for external organizations with business models that are better suited to commercialize a given technology or innovation. When organizations decide to establish short- or long-term relationships with their competitors, both being a competitor and a partner at the same time is commonly also called coopetition (Tani et al., 2018), while the term open innovation more emphasizes inclusion of creative consumers and communities of customers/users in the company innovation process. The challenges of globalization and the new competitive scenario have led scholars to investigate the sources of coopetition and its effects on competitive advantage. Bhansing et al. (2018) propose that creative entrepreneurs obtain inspiration and entrepreneurial passion from a type of local ‘buzz’ that is created by the presence of a larger group of peers centralized in a certain place. Wijngaarden et al. (2019b), when studying creative entrepreneurs, found that co-location, inspired by place and cluster’s reputation, provided professional legitimation and personal inspiration, commodified branding practices and functioned as a pull-factor for other creative entrepreneurs.
Siakas et al. (2012) claim, that it is not always the innovation or the technology itself that matters, but innovation-in-use. For reaching its optimum potential, the innovation must be deployed to ensure that it reaches all potential stakeholders that could benefit from it. Thus, timing (first-mover or fast follower advantage), robust design (platforms others can build on), rewriting the rules (different ways of doing things – old ones redundant) and reconfiguring the parts (rethinking how bits of systems work together), complexity (offering something that others find difficult to master), legal protection of intellectual property rights (others need to pay license), can also be considered innovations providing strategic advantage and value. Entrepreneurship and strategy enable organizations to create new ideas and to bring them to the market through development of visions, investigation and utilization of opportunities, creation of professional networks and facilitation of creativity and entrepreneurial mindsets (Horst & Murschetz, 2019).