Entrepreneurship and Innovation
What you must understand
Entrepreneurs identify and exploit opportunities, accept calculated risk and marshal resources. Distinguish the entrepreneur from the intrapreneur (innovating inside an existing firm). Know entrepreneurial traits and skills - opportunity recognition, resilience, initiative, networking, financial literacy - and recognise that traits alone do not explain success; context, resources and timing matter. Understand innovation types: product, process, incremental, radical and disruptive. Know the innovation process (idea generation, screening, development, testing, commercialisation) and sources of ideas (customer feedback, research, observation of problems, competitor gaps). Intellectual property protection (patents, trademarks, designs, copyright) and funding sources (bootstrapping, equity, debt, grants, crowdfunding) are examinable.
Traps in questions
- Claiming entrepreneurs are simply "risk-takers" - they manage and calculate risk rather than gamble.
- Confusing invention (a new idea) with innovation (a commercially applied idea).
- Labelling every new product "disruptive"; disruption reshapes markets and displaces incumbents.
- Ignoring failure as a learning outcome; questions often ask you to evaluate, not just celebrate.
- Recommending funding without matching it to stage and cash needs.
Rule of thumb
Test an innovation claim with three questions: is it new, is it applied, and does it create value? If any answer is no, it is not innovation in the examinable sense.
Worked example
A student designs a reusable coffee cup with a tracking app. It is an invention until sold. Incremental innovation: improved insulation. Radical: a deposit-return system that changes café behaviour. Funding: bootstrapping for prototype, crowdfunding for tooling, equity later for scale. Patent the mechanism, trademark the brand.