EDO 812 Module 1 Defining Innovation and Entrepreneurship Example

New Combinations in Old Farm Country: Defining Innovation and Entrepreneurship for a Land-Grant Extension Service

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Doctor of Education Program, Aspen University

EDO 812: Innovation and Entrepreneurship

Instructor Name

Month Day, Year

New Combinations in Old Farm Country: Defining Innovation and Entrepreneurship for a Land-Grant Extension Service

Plains State Extension is the outreach arm of an invented land-grant university in the Great Plains. Its 400 educators and specialists, working from 84 county offices and a campus headquarters, carry research on crops, livestock, nutrition, family finance and community development to the people of the state. The service's new director has asked every program leader to report the innovations their teams produced last year, and the reports that came back included a redesigned logo, a newsletter moved online, a text-message service warning farmers of crop disease and a clinic helping aging farmers transfer land to the next generation. The variety of what counted as innovation suggests that the service has no shared definition. This paper reviews how scholars define innovation and entrepreneurship and builds one for the service. The service, its projects and its figures are invented.

Why Definitions Matter

A definition decides what an organization notices, funds and rewards. If innovation means anything new, every change qualifies and the word guides nothing. If it means only breakthrough technology, a public service organization may conclude it has none to offer. For a doctoral leader, a definition is also the first step of research, since what cannot be defined cannot be measured or compared.

Schumpeter's New Combinations

Schumpeter (1934) placed innovation at the center of economic change. He described development as the carrying out of new combinations of productive means, and named five cases: introducing a new good or a new quality of a good, introducing a new method of production, opening a new market, securing a new source of raw materials or parts, and carrying out a new organization of an industry. He distinguished invention, which might never be used, from innovation, which puts the new combination into practice, and he called the person who carries out new combinations the entrepreneur, whether or not that person owns the business. In his account the entrepreneur disrupted existing arrangements, and the economy's circular flow was broken by these disruptions.

Two features of Schumpeter's view remain useful. Innovation is defined by implementation, not by idea alone, and entrepreneurship is a function, carrying out new combinations, rather than an occupation or a form of ownership.

Entrepreneurship as a Field

Shane and Venkataraman (2000) argued that entrepreneurship research had lacked a distinctive domain because it had defined the field by who the entrepreneur is or by the creation of new firms. They proposed instead that the field study the sources of entrepreneurial opportunities, the processes of discovering, evaluating and exploiting them, and the individuals who do so. Opportunities, in their account, are situations in which new goods, services, raw materials and organizing methods can be introduced and sold at more than their cost of production. Because opportunities can be pursued inside existing organizations as well as through new firms, the definition extends beyond startups.

The framing has a limitation for Plains State Extension: its definition of opportunity rests on selling above cost, while the service gives most of its programs away. The underlying idea, that entrepreneurship begins with recognizing a situation where something new could create value, still applies if value is defined more broadly.

Innovation as Process and Outcome

Crossan and Apaydin (2010) reviewed research on organizational innovation published over several decades and found the concept fragmented across fields. They proposed a definition in which innovation is the production or adoption, assimilation and exploitation of a value-added novelty, including the renewal of products, services and markets, new methods of production and new management systems, and they stressed that innovation is both a process and an outcome. Their framework organized the literature into the leadership determinants of innovation, the managerial levers that shape it, the business processes through which it occurs and the dimensions of innovation as a process and as an outcome.

Two points matter for the service. First, adoption counts: bringing a method proven elsewhere into a new setting is innovation, even if no one at the service invented it. Second, novelty must add value; a change that adds none is not innovation, however new.

Comparing the Definitions

A Working Definition

For Plains State Extension, this paper proposes the following. Innovation is a new or newly adopted program, method or organizational arrangement, put into practice, that creates measurable value for the people the service exists to serve. Entrepreneurship is the pursuit of such opportunities by staff, whether within existing programs or by creating new units, partnerships or ventures. The definition keeps Schumpeter's insistence on implementation and his view of entrepreneurship as a function, adopts Crossan and Apaydin's inclusion of adoption and their requirement of added value, and replaces Shane and Venkataraman's test of sale above cost with value to the public.

Testing the Definition

Implications

The definition has consequences. The service should count adoptions from other states as innovation and reward staff who bring them in. It should require each claimed innovation to show value to people served, not merely novelty. And it should recognize entrepreneurship by staff who launch new ventures such as the incubator, a role public organizations often leave unnamed.

Conclusion

Schumpeter, Shane and Venkataraman and Crossan and Apaydin agree that innovation requires implementation and differ on how value is judged and who acts. For a public extension service, a definition centered on new or adopted practices that create measurable value for the people served separates real innovation from relabeled routine and gives the service a basis for leading and studying it.

References

Crossan, M. M., & Apaydin, M. (2010). A multi-dimensional framework of organizational innovation: A systematic review of the literature. Journal of Management Studies, 47(6), 1154-1191. https://doi.org/10.1111/j.1467-6486.2009.00880.x

Schumpeter, J. A. (1934). The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle (R. Opie, Trans.). Harvard University Press.

Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1), 217-226. https://doi.org/10.5465/amr.2000.2791611