Introduction to Entrepreneurship
Senior 4 · Entrepreneurship
Introduction to Entrepreneurship
Lesson 3 of 4
25 min
In 1876 Alexander Graham Bell, in the United States, built instruments that carried the human voice along a wire. Nothing like them had existed before: that was an invention.
On 14 October 2016, at a ceremony in Muhanga District, Rwanda launched what Gavi, the Vaccine Alliance, called the world's first national drone delivery service. Hospitals in the western half of the country could order emergency blood by text message, and a small aircraft built and operated by Zipline, a California company, dropped it to them by parachute (Gavi press release, 14 October 2016). Drones, parachutes and text messages all existed already. What was new was putting them together to solve a real problem: blood that did not reach rural hospitals fast enough. That was an innovation.
Think about it: which of the two needed more new science, and which changed more lives in Rwanda? Is the answer the same?
Definition
Creativity: the ability to produce ideas that are both new (to the person or the setting) and useful. Creativity happens in the mind and on paper; it does not yet produce anything people can buy or use.
Example: a student sketching ten ways to keep milk cool without electricity.
Definition
Invention: the creation of a product, device or process that did not exist before. An invention may never be used or sold. In most countries an inventor can protect a new invention with a patent, a legal right that stops others from making or selling it without permission for a fixed period.
Example: Bell's telephone of 1876.
Definition
Innovation: putting a new or improved product, process or way of doing business into actual use, so that it creates value for customers, the organisation or society. Turning an invention or idea into something sold on the market is commercialisation.
Example: using drones to deliver blood to hospitals in Rwanda from 2016.
Three points follow from the diagram.
| Creativity | Invention | Innovation | |
|---|---|---|---|
| What it is | Producing new, useful ideas | Making something that did not exist | Putting something new or improved into use |
| Output | Ideas, sketches, plans | A prototype, device or formula | A product, service or method that people use or buy |
| Typical person | Anyone | Scientist, engineer, craftsperson | Entrepreneur or intrapreneur |
| Test of success | Is the idea new and useful? | Does it work? | Does it create value for users? |
| Can be protected by | Not protected as an idea | A patent | Trademarks, patents, being first to market |
Tip
One-line test. Creativity is thinking something new; invention is making something new; innovation is doing something new that people value. In exams, support each with an example.
The OECD's Oslo Manual, the international guide to measuring innovation, has long grouped innovations by what changes. A useful school version has four types:
| Type | What changes | Illustrative example |
|---|---|---|
| Product (or service) | What the business sells | A bakery adds bread made with sweet-potato flour |
| Process | How it is produced or delivered | A coffee washing station recycles its water |
| Marketing | How it is priced, packaged or promoted | Selling soap in small sachets that low-income buyers can afford |
| Organisational | How the business is run | A cooperative lets members check their accounts on their phones |
Innovations also differ in degree. An incremental innovation makes a small improvement to something that exists (a stronger bag, a faster service). A radical innovation creates something very different. A disruptive innovation starts as a cheaper, simpler offer for customers that existing firms ignore, then grows until it replaces the old way; mobile money is often given as the example, because it brought payments to people who had no bank account.
Worked example 1: what a small innovation is worth
A household cooks with 2.5 kg of charcoal a day, at Frw 600 per kg. An improved cookstove that costs Frw 18,000 uses 40% less charcoal. Find (a) the daily saving; (b) how many days the stove takes to pay for itself; (c) the saving in a year of 365 days after that. (Illustrative figures.)
(a) Charcoal saved per day, and its value:
(b) Payback period:
(c) Saving in a year:
Interpretation: the stove is an incremental product innovation, yet it repays its price in a month and saves a family over Frw 200,000 a year, while cutting the demand for charcoal. Value, not novelty, is what makes an innovation succeed.
Worked example 2: classify each case
Warning
Innovation is not the same as high technology. A new way of packaging, pricing or organising work can be as valuable as a new machine. And an invention that nobody uses is not an innovation, however clever it is.
Birkbeck, University of London: Professor Daniele Archibugi on the difference between invention and innovation, from a 2019 lecture. Listen for why many inventions never become innovations.
Practice
Key points
Sources and credits
Written by Ganzaa: the relationship diagram, the tables, the worked examples and the practice items. The households, businesses and figures in the examples are illustrative (2026).
This lesson adapts CC BY-SA material and is shared under CC BY-SA 4.0.
Quick check
Match each case to what it shows.
Tap one on the left, then its partner on the right.
