Innovation and Entrepreneurship: Practice and Principles

Peter Drucker in Innovation and Entrepreneurship: Practice and Principles wrote, “Entrepreneurship, it is commonly believed, is enourmously risky. And indeed, in such highly visible areas of innovation as high tech – micro-computers, for instance, or biogenetics – the casualy rate is high and the chances of success or even of survival seem to be quite low. But why should this be so? The entrepreneur, by definition, shifts resources from areas of low productivity and yield to areas of higher productivity and yield. Of course, there is a risk the entrepreneur may not succeed. But if even moderately successful, the returns should be more than adequate to offset whatever risk there might be. One should thus expect entrepreneurship to be considerably less risky than optimization. Indeed, nothing could be as risky as optimizing resources in areas where the proper and profitable course is innovation, that is, where the opportunities for innovation already exist. Theoretically, entrepreneurship should be the least risky rather than the most risky course.” This is the passage that inspired An Entrepreneurial Mind.