1. 1.2.4 Invention and innovation – generating new business ideas
Bicycle + DVD = cycle powered DVD
Cork screw + bottle = self-opening bottle
Mobile phone + fridge = self ordering food dispenser
Can you combine two products to come up with
three of your own new ideas?
1.2.4 Invention and innovation – generating new business ideas
1.2.4 Invention and Innovation

2. how new ideas come about
There are a variety of strategies used to generate new ideas:
Make use of the ideas of all employees within the business
Ask customers to be involved in the process
Involve suppliers in product innovation
Look at ideas that the competition have
At Google workers are allowed free time to develop ideas
1.2.4 Invention and Innovation

3. Generating new business ideas
Business and Personal experience
Often, ideas are generated through the individuals own experiences. We all face problems that need solving. Very few people actually go about trying to solve the problems from a business perspective.
Mandy Haberman was one such person when she developed the Anywayup cup in the 1990s. In she sold over cups.
1.2.4 Invention and Innovation

4. Generating new business ideas
Spotting a gap in the market
Concertlive began when founders James Perkins and Adam Goodyear attended a Massive Attack concert and wished they had a live recording of it. The company provides concert goers with a recording of the concert minutes after it has finished. Read their story and watch the story
1.2.4 Invention and Innovation

5. Generating new business ideas
Small businesses with limited resources
Most of the examples given have one thing in common – they are small businesses with limited resources. Smaller businesses:
Have lower initial investment for their ideas
Make greater use of own personal experiences
Make greater use of own business experiences
Spot a gap in the market (market niche) that bigger firms might not see or be able to fill
1.2.4 Invention and Innovation

6. innovation
Innovation is the development of an idea into a new product or process. Businesses invest time and money in order to make a profit. Product innovation occurs through adapting a product that already exists.
An innovation is likely to have a patent as the business looks to recoup the cost of research and development by stopping other firms from copying their product. Often, a small business will sell out to a larger one.
You Tube Adidas Innovation Center in Paris
Innovation at Adidas
1.2.4 Invention and Innovation

7. innovation
PURPOSE
Firms cannot afford to stand still in competitive markets – today’s innovations are tomorrow’s stars and cash cows
A firm that comes up with the right innovation can guarantee future income if it is protected by a patent
Although expensive, the alternative of losing future markets might be worse
RISKS INVOLVED
Firms can make substantial losses if innovation fails
Other companies are likely to react with their own innovations
Legal implications often arise with other firms questioning whether the product/process is really an innovation
1.2.4 Invention and Innovation

8. innovation BENEFITS COSTS Creates a USP for the product
Less competition due to patent
More efficient and cost effective production process
Likely to be a premium product with high prices
COSTS
Can be very costly in R&D stage and therefore a drain on resources
For all innovations there is an opportunity cost
Few innovations see the light of day so the firm is effectively financing waste
1.2.4 Invention and Innovation

9. Invention or innovation?
Invention is the original occurrence of an idea for a new product or process.
Innovation can be defined in a number of ways:
The bringing of the invention to the market – many inventions never see the light of day. It is the role of the entrepreneur to innovate
It is the development of the product or process that makes it innovative
1.2.4 Invention and Innovation

10. Protecting a business idea patents and copyright
What is copyright?
Copyright is a legal protection for anyone that has produced work in a range of areas – these include literature, drama, music, art, layouts, recordings and broadcasts of work. It is illegal to use copyrighted work without the permission of the owner.
Copyright does not protect ideas until they are fixed e.g. set down in writing. Copyright does not have to be registered.
1.2.4 Invention and Innovation

11. Protecting a business idea patents and copyright
What is a patent?
The Intellectual Property Office describe a patent as something that ‘protects new inventions and covers how things work, what they do, how they do it, what they are made of and how they are made. It gives the owner the right to prevent others from making, using, importing or selling the invention without permission’.
The invention must be new, be capable of being made and used in an industry and must not be obvious to people that have knowledge and experience of the subject. .
Seeing the idea through to completion can be very costly – often small inventors sell their ideas on to larger companies.
1.2.4 Invention and Innovation

12. MULTIPLE CHOICE □ A Franchise □ B Copyright □ C Market research
1. Which of the following would be the most appropriate way an entrepreneur could protect a new business idea?
Select one answer
□ A Franchise
□ B Copyright
□ C Market research
□ D Finding a suitable location
2. Which one of the following can be used to stop other businesses copying your product:
□ A Patent
□ B Adding value
□ C Creative thinking
□ D Secondary research
1. B 2. A
1.2.4 Invention and Innovation 12