Welcome to my personal blog. I mostly write on entrepreneurship, economics, libertarianism, movies, and my travels.

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Jun 13, 2012

Book Review: Innovation and Entrepreneurship

Realizing that since I have been working on promoting the ideas of entrepreneurship, especially among youth I also need to have some knowledge of theoretical aspects of entrepreneurship I had been looking around for some books on the subject when I bumped into management guru Peter F. Drucker's classic work Innovation and Entrepreneurship: Practice and Principles. I just completed reading the book and I must say despite being almost 3 decades old, the book is very interesting and pretty much relevant in current scenario. I was able to get some new insights about entrepreneurship which have refined my understanding about entrepreneurship.

The confusion between entrepreneurship and business is prevalent in our society and I think with the increasing use of the words 'entrepreneurs' and 'entrepreneurship' to refer to any business venture-small or large, innovative or non-innovative, the distinction is getting even more vague which is unfortunate. Entrepreneurship is more about innovation than just a business. Innovation doesn't necessarily mean finding a new product or technology only, innovation is, in fact in most cases, about finding new ways of doing the same thing more effectively, recognizing the incongruity between the perception of consumers and producers, recognizing the changes in industry and market structure and adjusting products and services accordingly, planning and producing products and services according to the demographic structures of the society etc. 

For example, Ray Kroc, the founder of McDonald's, didn't invent the hamburger; he established a new system of clean, reliable, fast food delivery that created a whole new industry. Similarly, Henry Ford didn't invent the automobile and J. P. Morgan didn't invent banking; but they applied their imaginations to the systems by which cars were produced and money was exchanged. 

The author has distinguished between invention and innovation and has tried his best to dispel the  "flash of inspiration' myth about entrepreneurs. With enough evidences and arguments he has asserted rather than the 'flash of inspiration' tremendous amount of hard work goes into every successful new enterprise. According to him, the process of entrepreneurship can be systematized and any company large or small can practice entrepreneurship. Although generally entrepreneurial working style shuns management because of the control and pre-defined framework required by the management, the author believes entrepreneurship can be and should be managed. In today's rapidly changing business environment and cut-throat competition, no company how big it is or how pervasive it is in the market can rest on its laurels. Every company should be continually looking around for innovation and improvements.

Drucker proposes that there are seven sources of innovative opportunity:  
  • unexpected events,
  • incongruities between the expected and the actual,
  • new process requirements,
  • unanticipated changes in industry or market structure,
  • demographic changes,
  • changes in perception, mood, or meaning, and
  • new knowledge.
And as per him, contrary to the popular notion, the last entry in this list, new knowledge, is the least reliable and least predictable of them all.

According to him principles of innovation are:
  • Begin with an analysis of all the opportunities
  • Go out to look, ask, listen for consumers perspectives and find the incongruities
  • An innovation must be simple and focused on a specific need.
  • Effective innovations start small
  • Entrepreneurship aims at leadership in the market not at being the biggest player
Towards the end of the book, he has also outlined some entrepreneurial strategies that are generally used by very innovative ventures to keep leading the market.

I found the book very insightful and a must read for anyone wishing to understand the process and principles of entrepreneurship. By the way, scribd.com hosts a free copy of the book at this link. If you are interested grab it before it gets deleted!!

Jun 12, 2012

Pirates and Proletariats

I still remember the graduation ceremony of political economy course I had taken in Hong Kong in July 2010. As a keynote speaker we had a North Korean party official who had fled to South Korea and had been raising voices against human rights abuse in North Korea. In his speech, he described how the life had been like in the 'hermit kingdom' and why he , despite being a well-to-do party official had fled the country risking his and his family's life. "The day I arrived in South Korea I realized my whole life had been lived in a lie. Seeing South Korea's roads packed with cars of different colors and models, I thought maybe today's some special day here.In North Korea we were told South Koreans were extremely poor and they didn't have enough to eat. So, I thought maybe it's some special day to have so many cars on the road like we used to in North Korea. To my utter disbelief, I came to know that almost everyone has a car in South Korea and I had been living in an illusion", he said.

Hearing this from a well-to-do party official from North Korea had given me an inkling of how brainwashed the North Korean society is. Fed with an alternative version of reality in order for it to be manipulated and controlled, one can only feel sorry for these 30 million unfortunate people.

However, reading this news recently has made me more hopeful for these people and increased my respect to some extent for the file sharing pirates. According this news developments in technology are giving citizens of North Korea new access to information and insights into life beyond their borders.

The report, titled A Quiet Opening surveyed North Korean refugees and those who managed to travel outside the country. What it shows is that increasing numbers are gaining access to pirated media from outside the hermit nation, with potentially life-changing consequences.

While devices such as standard radios and televisions are manufactured so that citizens (at least those who can afford them) can only listen to state-run radio stations, imported devices are able to pick up signals from South Korea, China and beyond, although receiving these broadcasts is a crime.

With Internet unavailable to all but a tiny percentage of the elite, citizens of North Korea are obtaining their information through other means, notably file-sharing devices such as DVDs, MP3 and MP4 players, and USB drives.

Through these means they are being increasingly exposed to pirated TV shows and pop music leaking from neighboring South Korea. What they gain from these files is an alternative take on the world which challenges the propaganda of their leaders.

My best wishes and salute to these people. These people are indeed courageous given the fact that:

In North Korea possession of unauthorized TV shows or music is a very dangerous affair. Depending on how the offense is viewed, punishments can range from 3 months unpaid labor to 5 years in a prison camp if the media originates from South Korea.

Note: The full report of A Quiet Opening can be downloaded from this link.