Entrepreneurship is the driving force bringing innovations to the marketplace and establishing a community of high-growth firms. A creative entrepreneurial sector or community within an economy can contribute significantly to its prosperity. With change as the constant in today's globalized world, entrepreneurs constantly seize any arising opportunities to create new wealth. Peter Drucker in his book Innovation and Entrepreneurship noted that: "Entrepreneurs see change as the norm and as healthy. He or she always searches for change, responds to it, and exploits it as an opportunity."

Embracing creativity and innovation, an entrepreneur’s products or services can bring about business growth, productivity improvement, job and wealth creation, an enhanced image for the economy, and ultimately a better quality of life for all. Policy makers have recognized that creative entrepreneurship needs to be encouraged through appropriate policies that foster entrepreneurship, innovation, and technological development. Some countries have introduced science parks in the hope that the provision of infrastructure will spark the development of high-tech ventures with new innovations and inventions that can become global products and services.

Within enterprises, there is a need for creative entrepreneurship. Some enlightened corporations have fostered creative entrepreneurship within their organizations by providing opportunities for innovation, intraorganization venture financing, and ownership of employee-initiated projects. More needs to be done in this area to motivate the involvement of incumbents in a corporation through tangible and intangible means.

This study meeting sought to promote the exchange of knowledge of, experience in, and approaches to creative entrepreneurship and creativity and innovation as a strategy for business excellence and growth in APO member countries. It investigated the following subtopics:

• Relevance of creative entrepreneurship for business growth and economic prosperity

• Critical examination of success factors for entrepreneurs

• Role of stakeholders, especially the government or NPOs, in promoting entrepreneurship

• Measures available to access entrepreneurial activities in an economy and their economic impact

• Development of enterprise "ecosystems"

The study meeting was jointly organized by the APO and the host country, the ROC, through the China Productivity Centre (CPC) from 18–21 May 2004 in Taipei. Sixteen participants from the 12 member countries India, Indonesia, Islamic Republic of Iran, the ROK, Malaysia, Mongolia, Nepal, Philippines, Singapore, Sri Lanka, Thailand, and Vietnam contributed to the deliberations of the meeting. Three APO resource persons from Malaysia, the ROK, and Singapore provided resource inputs in addition to two local resource persons. To supplement the learning with practical examples, a field visit was organized to the National Taiwan University Innovation Incubation Centre (NTUIIC), where two of its successful tenants, Universal Vision Biotechnology and Genozyme Biotech, were introduced to the participants.

The list of participants and resource persons, and program schedule are attached as Annexes 1 and 2, respectively.

1. Presentations by Resource Persons

1.1 What Is Creative Entrepreneurship?

In the overview of the study meeting, Professor W.L. Tan of Singapore Management Unviersity pointed out that the meeting would consider:

a. Spheres of creative entrepreneurship:

• Who—new ventures, serial entrepreneurs, existing ventures (by themselves), existing ventures (together with others), regions, and networks.

• What—new products/services based on innovations or technology, new markets, new processes, or new business models.

b. Challenges hindering the growth of creative entrepreneurship and how enterprises overcame them on their own or with assistance from the private sector and/or government.

The main themes to be covered were:

• Creative entrepreneurs

• Public policies driving creative entrepreneurship

• International creative entrepreneurs

• Technology and innovation

• Corporate entrepreneurship

1.2 Corporate Entrepreneurship

Professor Tan highlighted the potential that most enterprises neglect when they consider ways to be creative and entrepreneurial, that is, they fail to engage the creativity of their workforce. Corporate entrepreneurship spans a continuum of possibilities, beginning with an R&D department, to involving only middle managers, to permeating the whole organization.

Whatever the level or extent of the organization one wishes to engage in corporate entrepreneurship, there is a need to change organizational factors. Certain factors have been identified by researchers as important for fostering corporate entrepreneurship. The most important are the attitudes of the intended employees. The proper attitudes toward corporate entrepreneurship will lead to objectives and subsequent actions. Other factors include organizational culture, practices, flexibility, and sponsorship of employee innovation projects. An organizational culture that results in creative entrepreneurship allows employees to remain with their projects (continuity), encourages communication across areas and levels of the firm, creates cross-functional teams, encourages decision making by all even at the lowest level of the organization, and permits project teams multiple options so that they are not confined to procurement from limited sources. It does not encourage risk aversion or conformity. Such organizations train and develop their workforces, encourage creative decision making, do not frown upon projects with small beginnings, and spread any innovation throughout the whole organization. There is flexibility in the operation of the teams and the organization sponsors projects. In his study of Singapore middle managers, Professor Tan found that organizational culture, flexibility, and sponsorship influenced middle managers to become internal corporate entrepreneurs (intrapreneurs).

1.3 Product Innovation and Business Model (the Case of OKWAP Phone)

Mr. Jackson Chang, Chairman of Inventec Appliances Corporation, expanded on Professor Tan’s presentation by showing how his company was able to involve its project teams in developing the ROC’s most popular locally produced mobile telephones, with the brandname of OKWAP. The phones have the same features as the internationally known brands Samsung, Nokia, and Sony Ericsson.

He introduced the participants to the various considerations of an effective product innovation process and business model: strategy (positioning, entry segment, competing edge), execution (resources, process, and integration), and deployment (marketing and promotion, community service, and sustaining competitiveness). Taking these into consideration, Inventec developed its unique mobile phones with local content functions such as the Taiwan personal digital assistant and dictionary; culture-related content such as Web site support for free downloads; and a local touch like tailormade capability, promotion activities, and service and community features.

1.4 Can Entrepreneurship Be Taught? The Experience of the ROC

Professor C.T. Wen of the Graduate Institute of Technology and Innovation Management, National Cheng-chi University, explained how he developed the entrepreneurship program at the university to develop creative entrepreneurs and entrepreneurial teams. He made a study of overseas programs including the MIT e-Lab, University of Southern California Student Incubator Hatchery, University of Washington New Venture Creation Lab, Osaka Venture Factory, and Innocamp of Norway. He concluded that to foster creative entrepreneurship in the university environment, there is a need to create activities and an environment within which the students can develop ideas, work through those ideas, and involve university programs and resources to refine them, and interact with the mentors provided by the university to result in new ventures (Figure 1).

At the National Cheng-chi University, Professor Wen has encouraged entrepreneurship through the mentoring of business plan teams for the Taiwan Innovation Competition that is based on the MIT 50k Business Plan competition. He shared his conviction that for creative entrepreneurship to occur, a suitable milieu must be created wherein individuals can choose the combinations that work for them. Business plan competitions by themselves do not lead to entrepreneurship but often only create gamesmanship. He noted that there has been a decline in student interest in such competitions.

Figure 1. Facilitating creative entrepreneurship at National Cheng-chi University

1.5 Strategy for Creating an Entrepreneurial Incubator: the National Taiwan University Case

Taiwan is a showcase for successful ecosystems for creative entrepreneurship in its incubators. There has been an increase in the number of incubators established after the international success of firms incubated at the Hsinchu Industrial Park, in particular at the Industrial Technology Research Institute (ITRI). ITRI is a primary R&D center for industry in the ROC. In 1973, when ITRI was founded, there was very little high-tech industry in the country. Today, the ROC is a world-class player in semiconductors, personal computers, and many other high-tech sectors. ITRI has played a significant role in this transformation.

Professor K.C. Fan outlined the way in which National Taiwan University (NTU) created its entrepreneurial incubator center, one of many being developed by universities and funded by the government. The entrepreneurial incubator center enables professors’ involvement in consultancy, students’ involvement in internships, and the university’s involvement in setting up laboratories, facility utilization, and entrepreneurial programs. The additional expected benefits include commercialization of technology developed on campus, the formation of academic team groups as new start-up teams, and linkages between the university and industry. However, the center will face challenges, as Professor Fan noted that other university incubators have not been financially self-sustaining if financial support from the university or government is cut. Further, their contributions to universities are still not satisfactory in terms of equity returns. Perhaps the way forward is to permit universities to attract private investment in the incubators, as is being tried in China and at Universiti Sains in Malaysia.

1.6 NTU Incubation Center Site Visit

The participants learned more about product innovation through a site visit to the NTU’s entrepreneurial incubator center. Professors K.C. Fan and Chau-Chen Yang introduced the NTUIIC to the participants. As an incubator, the NTUIIC created an environment for "start-ups" and "innovation" with the objectives of lowering the risk of start-ups, improving the R&D capability of enterprises, assisting traditional enterprises to seek advances in technology, and to extend R&D conducted at the NTU until the final stage of commercialization.

The relationship of the incubator in relation to the tenants is shown in Figure 2. The incubator is structured as a company that is the interface between the tenants and the other stakeholders (internal and external). It has had modest success and has been able to attract university alumni and notable businesspeople to act as mentors. Since its formation in 2002, it has "graduated" 28 small and medium enterprises (SMEs) representing 14 in information technology, 11 in engineering, and three in the field of biotechnology. It is presently incubating 19 firms.

Two of its tenants, Universal Vision Biotechnology and Genozyme Biotech, were introduced to the participants. Universal Vision Biotechnology is the first management consultation company in the field of professional ophthalmic treatment and the first to specialize in ophthalmic biotechnology in the ROC. It is in the incubator because one of its projects is R&D involving the NTU faculty to improve vision biotechnology techniques using excimer lasers, the vision treatment commonly associated with high myopia called LASIK. The other tenant, Genozyme Biotech, focuses on biotechnology applications for the livestock industry and produces enzymes for feed improvement and tests for the detection of toxins in feed which ranchers can use to improve livestock yields.

Figure 2. Incubators, tenants, and other stakeholders in the NTUIIC

1.7 The Interface between Entrepreneurship, Creativity, and Innovation: The Malaysian Experience

Dato’ Mustafa Mansur drew from the Malaysian experience to demonstrate how Malaysian entrepreneurs and enterprises have continued to find niches and expand their markets. He presented two case studies: Royal Selangor International and Air Asia.

Royal Selangor International is a world-renowned producer of pewterware and high-end gift items, including jewellery. Although it has its share of competitors who have tried to mimic its products, Royal Selangor has employed an innovative marketing strategy involving creatively displayed showrooms, on-line shopping opportunities since 1996, and new design collections. It has found innovations to be critical because its products have short life cycles, and its designs can be easily copied by competitors and are nonessential luxury items.

AirAsia is Asia’s first low-fare, no-frills airline to introduce ticketless travel. It operates frequent flights and plies routes not covered by mainline operators, saving costs through the use of modern technologies to manage its operations like on-line booking and payment facilities, a multilingual Web site offering real-time holiday packages, mobile phone short message booking and checking of flight schedules, and a direct "B2B engine" with agents and virtual credit cards. The interesting element is that the creative team did not come from the airline industry but from the music industry. They infused techniques used in the promotion of services and advertisements in the music industry in the new airline.

1.8 Creativity and Entrepreneurship

Dr. M.K. Kim of Soongsil University School of Entrepreneurship and SME Management in his presentation focused on the theory of creativity and how it interfaces with entrepreneurship. In particular, he stressed that creativity is a collective capability that the whole organization can embrace. There are steps that organizations need to take, however. They should develop skills and capabilities that make it unique both in the present and in the future. The uniqueness is collective in nature, founded on the culture of the organization, in particular the way it operates and communicates as a team, rather than the creative skills of a few elite employees. The creative capability of the organization is shaped by the way the entire staff works and feels about the organization. Therefore creativity often involves organizational development processes rather than recruitment and career management tasks.

In addition to the resource speakers, the participants presented papers on the theme of the study meeting. The topics of their papers are listed below. The participants, to varying degrees, covered the topics assigned to them. The presentation contents served as the basis for the ensuing discussions.

The participants devoted time in syndicate groups to a discussion of what creative entrepreneurship really means. They agreed that various definitions existed but adopted Professor Tan’s proposed definition of "any new business activity involving creativity and innovation." The definition is important as the type of enterprises and mindsets that the countries, companies, and individuals seek to establish are identified based on the definition.

The participants were divided into three syndicate groups to facilitate discussion and active learning from the papers and site visits. The three syndicates and the members are listed below.

Through the discussions, the participants concluded that to encourage creative entrepreneurship, policy makers need to encourage the various stakeholders in society to enhance the adoption of technology and encourage innovation within enterprises. These stakeholders include governments, trade associations, and tertiary educational institutions.

The Role of Governments, Trade Associations, and Other Stakeholders

It is important for governments, trade associations, and other stakeholders to assist entrepreneurs in sharpening their skills in management and leadership qualities and to provide the necessary tools to identify opportunities. They often provide the external impetus and staff experience that lead to productive changes in management processes to facilitate the creation of new products and services. Their suggested main roles are:

Government: foster the environment conducive to creativity and the adoption of technology.

Trade/industrial bodies and societies: act as catalysts for business growth, facilitators of governmental policies, and channels for businesses information.

Institutions of higher learning: provide specialists and researchers, platforms for technology development, and tools for management and serve as focal points for economic literacy.

They can provide platforms for entrepreneurs to move forward in the right environment to create, innovate, and adopt technologies to succeed or to survive. There are six elements in successful and positive environments for creative entrepreneurship: market support, intelligence support, financial support, legislative support, technology support, and infrastructure support. These elements of the environment should be freely accessible to entrepreneurs. They should work hand-in-hand to promote the efficiency and productivity of enterprises leading to a synergistic outcome.

Pertinent to creative entrepreneurship is the role of these stakeholders in the promotion of innovation and technology adoption. The participants recommended the following:

Networking

Networks should be encouraged as means for the exchange of ideas. Alumni, trade, or industrial bodies and societies, and informal business contacts could provide a good platform for like-minded and complementary businesspeople to interact, exchange best practices, and possibly ignite technology transfers among enterprises. Networks can facilitate the rapid dissemination of knowledge and know-how. In addition, trade or industrial bodies and societies can be screening agents for good business matchmaking opportunities for businesses, thus enhancing the ability of businesses to collaborate.

Government Policies

Governments could assist in providing conducive environments for the creation of innovation and the adoption of technology. In many countries, governments could provide technology upgrading incentive schemes and financing schemes to ease cash flows or increase capital for R&D activities within enterprises. Governments may pass laws or guidelines to protect SMEs from intellectual property rights abuses. This will encourage small businesses to innovate and reinvent.

The main objective of government policies on these issues is a substantial net increase in the level of high-quality R&D in enterprises and to ensure an integrated and unified approach to research-related activities. These should cover industrial R&D, process development and innovation, and technology acquisition.

Communication

Organizations should be encouraged to promote open channels of communication among all levels of management so that no ideas are brushed aside. Stakeholders could play a significant role in the provision of information and intelligence to enterprises. For example, industrial associations could provide regular updates on changes in government policies and new incentive schemes to enterprises. This would make it easier for enterprise decision makers to utilize government incentive schemes.

Incubators and Mentors

Incubators run by universities and research groups could assist businesses, especially SMEs, to grow in a conducive environment. Researchers, specialists, and consultants should be available to enterprises being incubated. The credibility of the "host" could lend weight to the tenants, thus attracting better funding from the government or business "angels." Access to R&D facilities is the main advantage for promising SMEs to be based in incubators. Mentors lend their experience to the incubating enterprises and guide them through potentially disruptive innovation.

Education

Educational institutions could provide the technical know-how and innovation process management skills to senior managers in corporations. Studies have also shown that general education can enhance innovation. The adoption of technologies is more rapid in countries with higher literacy rates. Thus education and academic institutions can play a significant role in the adoption of technology and innovation creation in an economy.

Business plan competitions, which incorporate technology adoption and innovation, are a good opportunity to start young would-be entrepreneurs thinking about innovation at an early age.

APO Entrepreneur of the Year Award

To encourage innovation and measure the success of entrepreneurship, the participants suggested the introduction of an APO Entrepreneur of the Year Award (EYA). The award could provide a consistent platform to measure successful entrepreneurship. One main criterion for the APO EYA should be how entrepreneurs encourage the use of technology and the promotion of innovation in enterprises. This may be the hallmark of a successful entrepreneur.

Overall, the study meeting met its intended objectives. There was lively discussion of the issues faced by member countries seeking to develop creative entrepreneurship. The mix of policy makers, entrepreneurs, and representatives from trade and professional associations facilitated the discussions. The country papers and case studies revealed the myriad forms that creative entrepreneurship can take in an economy. Positive feedback was obtained from the participants, and some of the entrepreneurs found common interest in business ventures and may pursue collaborative alliances.

Attachments: Annex 1 & 2