In-house collection of innovation ideas from employees is an interesting area. The brainstorming system is very often utilized during staff meetings on all the levels. Here, some companies also apply a motivation element in the form of a one-time bonus paid to an employee who solves a problem in question. On the other hand, other companies have a system based on collection points where employees may leave their impulses that are further evaluated during staff meetings. Based on realized interviews, it is possible to state that individual systems of communication with one's own employees when collecting innovative ideas differ from company to company. The bonus system represents a unifying element.

Table 6. Innovation incitation and its importance

70 Entrepreneurship – Creativity and Innovative Business Models

Inspiration by competitors represented an important motive as well. Therefore, it is possible to find so-called imitating companies among companies that implemented innovations, which created new innovations only for their own company, but not from the aspect of the market; i.e. they implemented new products or services already provided by competitors. A similar situation applies to process innovations where sources of innovations were modified or assumed technologies developed by competitors. As for inquired companies, innovators

Motives of innovation activities represent a starting point for innovation strategies. Strategic marketing and research, with a nomination by top management, participates in strategy proposal and formulation. The objective of every innovation strategy rests in achieving a competitive advantage leading to the company's improved position on the market (other objectives are derived). When creating a competitive advantage, first of all, companies have to be aware of their competitors' strategies, as well as their own competitive advantage.

Almost all inquired companies (93% of respondents) are aware of their competitive advantage, which they have in comparison with their competitors. Only 7% are not aware of

The process of formulating strategy results in production of an innovation plan that serves as the base for creation of other partial plans. When evaluating how much importance a company gives to production of innovation plans, the majority of companies replied that the biggest consideration goes to short-term plans, plans up to 1 year, and plans up to 2-3 years. Then, 8% of respondents do not compile any innovation plans and 1% of respondents

**Short-term plans** 2.1618 0.9642 2 23 28 20 8 21 51 **1 year plan** 2.4783 0.8095 2 8 34 30 8 20 42 **2–3 years plan** 2.5714 0.9974 3 12 17 23 13 35 29 **None plan** 2.7500 0.8874 3 2 6 10 5 77 8 **Other** 2.7500 0.4330 3 0 1 4 0 95 1

If we wish to seek sources of innovation ideas, it is necessary to verify if companies are able to identify, grab, and further process innovation impulses and ideas. Impulses for innovations in a company's vicinity come most often from external customers. That is closely followed by generation of impulses based on competitors. Utilization of impulses from professional literature, conferences, trade fairs, and exhibitions comes next. Innovation impulses inside a company come the most often from employees or as a result of a need to change technology and processes, via which products are produced or services offered. A

In-house collection of innovation ideas from employees is an interesting area. The brainstorming system is very often utilized during staff meetings on all the levels. Here,

**deviation Modus Evaluating 1–5 (%) Σ 1+2**

**1 2 3 4 5 (%)**

who assume and modify already known technologies unambiguously prevail.

compile plans that have different deadlines than defined (see Table 5).

list and evaluation of innovation impulses are shown in Table 6.

**Average Standard**

such advantage.

Table 5. Innovation plans development

**4.2 Marketing area**

When determining in which manner market information is shared in a company, it was discovered that 32% of companies are utilizing a high-quality information system (hereinafter the "IS") that is used by competent workers. That is a status in which a company has correctly implemented IS with correctly defined access possibilities for competent workers. That creates prerequisites for effective creation of strategic plans in a company and for sharing innovation impulses within individual company departments and between them. Unfortunately, only approx. 1/3 of inquired companies operate like this. For the other 32% of companies, there is practical knowledge that is sufficient and known to all the competent workers and, therefore, there is no need to engage in collecting and processing additional information. Such companies are utilizing know-how of their workers. When such worker leaves, a problem occurs. Non-sharing of information leads to growth of such worker's value and creation of pseudo-key positions in the company. For 29% of inquired companies, information on the market, contracts, and competitors is usually taken by competitive workers; however, they are not systematically shared for further utilization in the company. Such companies have IS, but only on the level of local stations, and mutual interconnection of information flow across a company is not utilized. Slow-down of flow of marketing information then expresses itself in delay in production of strategic plans or their frequent changes and corrections. The remaining

The Development and Implementation

Fig. 6. Way of communication with partners

25%

6% 5%

**innovation activities evaluation / markets**

quantile 2 0,95

was demonstrated.

**5. Discussions**

the research hypothesis as confirmed.

of Marketing Information System Within Innovation: The Increasing of Innovative Performance 73

**Way of communication with**

**partners**

**forecasts No Yes ni No** 26 8 34 **Yes** 37 68 105 **nj** 63 76 139 Table 7. Relations research of innovation activities evaluation and markets forecasts

64%

Independency statistic test of two qualitative characters will be carried out for statistic dependency verification. Null fragmental hypothesis DH0 is going to be tested that random

DH0: *Expression of innovation effects and modeling future markets are not relate to each other.* DH1: *Expression of innovation effects and modeling future markets are related to each other.*

Calculated test criterion χ2 = 6,959 for selected significance level α = 0,05 is determined a

criterion was realized in critical field (6,959 > 3,841), fragmental null hypothesis DH0 is refused on five percentage level signification and alternative fragmental hypothesis DH1 is accepted. Random values are dependent and relationship between direct expression of innovation activities effects and market progress forecasts by marketing information system

Based on primary research results and statistic independency test it is possible to consider

In SMR, those most engaged in innovations are micro companies (43%) and small companies (33%) that have a Czech owner (82%); of those, 39% operate on the domestic market within the whole Czech Republic and 27% operate only on the regional market.

0,95

1 3,841 . Because the value of test

No reaction on partners' new

Communication only in case of serious troubles

ideas

values are not depended in comparison with alternative fragmental hypothesis DH1.

1 of Pearson distribution 2

7% of inquired companies record information about the market by means of the company's information system, but workers do not optimally utilize it. Such companies do not pay enough attention to transfer of marketing information. Such companies are usually based on routine and practical experience and adjust their planning accordingly. Results of answers of inquiries companies to the transfer of market information issue are shown on Figure 5.

Fig. 5. Way of marketing information transfer

In addition to internal communication, external communication with the company's partners is important for a company as well, and in the majority of cases, it takes place via competent workers who register suggestions and comments (64% of respondents). Informal communication with partners via marketing staff is the basis. They are responsible for transfer of information to the company and for ensuring that it is undistorted. A quarter of companies communicate with partners via the company's information system (25% of respondents). 6% of companies do not have the scope to react to partners' suggestions. Such companies behave as closed units and consider all the information related to their internal environment their know-how and, therefore, they usually are not too willing to communicate with their partners. The remaining 5% of companies communicate with partners only in the case of serious problems. Figure 6 presents results of communication with partners.

Next aim of a questionnaire research was to find out whether companies do evaluate the realized innovations activities and whether they utilize marketing information system for the evaluation of predictions of future markets. For that purpose the hypothesis H2 *Direct expression of innovation activities effects significantly depends on market development forecasts. Marketing information systems have to support their predictions* and following questions from the questionnaire will be used: *Does your company evaluate the realized innovation projects?* and *Is there implemented and utilized marketing information system for future markets modelling in your company?*

Fig. 6. Way of communication with partners

72 Entrepreneurship – Creativity and Innovative Business Models

7% of inquired companies record information about the market by means of the company's information system, but workers do not optimally utilize it. Such companies do not pay enough attention to transfer of marketing information. Such companies are usually based on routine and practical experience and adjust their planning accordingly. Results of answers of inquiries companies to the transfer of market information issue are

**Way of market information**

**transfer**

In addition to internal communication, external communication with the company's partners is important for a company as well, and in the majority of cases, it takes place via competent workers who register suggestions and comments (64% of respondents). Informal communication with partners via marketing staff is the basis. They are responsible for transfer of information to the company and for ensuring that it is undistorted. A quarter of companies communicate with partners via the company's information system (25% of respondents). 6% of companies do not have the scope to react to partners' suggestions. Such companies behave as closed units and consider all the information related to their internal environment their know-how and, therefore, they usually are not too willing to communicate with their partners. The remaining 5% of companies communicate with partners only in the case of serious problems. Figure 6 presents results of communication

7%

Utilization of IS

Evidence in IS, but none utilization of information

32%

Next aim of a questionnaire research was to find out whether companies do evaluate the realized innovations activities and whether they utilize marketing information system for the evaluation of predictions of future markets. For that purpose the hypothesis H2 *Direct expression of innovation activities effects significantly depends on market development forecasts. Marketing information systems have to support their predictions* and following questions from the questionnaire will be used: *Does your company evaluate the realized innovation projects?* and *Is there implemented and utilized marketing information system for future markets modelling in your*

shown on Figure 5.

with partners.

*company?*

Fig. 5. Way of marketing information transfer

29%

32%

Table 7. Relations research of innovation activities evaluation and markets forecasts

Independency statistic test of two qualitative characters will be carried out for statistic dependency verification. Null fragmental hypothesis DH0 is going to be tested that random values are not depended in comparison with alternative fragmental hypothesis DH1.

DH0: *Expression of innovation effects and modeling future markets are not relate to each other.*

DH1: *Expression of innovation effects and modeling future markets are related to each other.*

Calculated test criterion χ2 = 6,959 for selected significance level α = 0,05 is determined a quantile 2 0,95 1 of Pearson distribution 2 0,95 1 3,841 . Because the value of test criterion was realized in critical field (6,959 > 3,841), fragmental null hypothesis DH0 is refused on five percentage level signification and alternative fragmental hypothesis DH1 is accepted. Random values are dependent and relationship between direct expression of innovation activities effects and market progress forecasts by marketing information system was demonstrated.

Based on primary research results and statistic independency test it is possible to consider the research hypothesis as confirmed.

#### **5. Discussions**

In SMR, those most engaged in innovations are micro companies (43%) and small companies (33%) that have a Czech owner (82%); of those, 39% operate on the domestic market within the whole Czech Republic and 27% operate only on the regional market.

The Development and Implementation

trying to motivate them.

problems in the future.

system has to be formalized and systemically built.

In the ideal situation, MIS serves the purpose of:

analysis of new expansion areas.

are considered very important.

data collection decreased.

of Marketing Information System Within Innovation: The Increasing of Innovative Performance 75

Individual innovation impulses are then target-collected by a company. During the collection, in-house networks are utilized, as well as networks of external co-workers; for example, authorized dealers, etc. In practice, collection that is rather informal is more often proven good; for example, via discussions with service technicians during assemblies. A customer does not feel so bound and is willing to handle matters that he would not even mention otherwise. With regards to their own potential, companies try to convert received impulses to innovation ideas that can be utilized during the following work. The main source of innovation ideas are then employees or management of companies. With regard to the fact that companies engage their employees in seeking innovation ideas, they are also

In personal interviews, managers of some companies admitted that they do not pay enough attention to transfer of marketing information, despite the existence of some information system. At the same time, marketing management within the innovation process is usually left out, especially in the case of small and medium-sized companies. Therefore, a company management loses its insight into environment and new trends, which can cause problems with distribution, downturn of revenues, decreased profit, and it can even lead to existential

These days, everybody is probably aware of the importance of high-quality and timely information for correct decision making. It is also considered a matter of fact that a company has to reflect the wishes of its customers and very closely monitor development on markets, otherwise it would not be able to react accordingly and maintain its position on markets. Therefore, companies should have marketing information systems (hereinafter the "MIS") implemented. Their necessity was ultimately highlighted by results of the primary research as well. In smaller companies, such system can even have a completely informal process when all the interested parties meet and discuss a problem. It is apparent that from a certain size of a company, such "system" is completely unsuitable, and a marketing information

Unfortunately, as shown by the primary research, the majority of companies lack a sophisticated marketing information system, modeling and analysis of the future market, analyses of customers, their behavior and unsaid needs, definition of price strategies, and

Information necessary for effective functioning of a marketing information system that is necessary for acquiring innovation impulses from the market and management of the whole innovation process with the objective of increases competitiveness of a company as a whole can originate from different sources. Information received from contacts between companies' employees and customers, competitors, and suppliers within business meetings, exhibitions and trade fairs, professional seminars, execution of maintenance and repairs, etc.

 Collection and transfer of information – thanks to computers and other communication means, collection and transfer of information is significantly faster and, also, costs of

During the last three years, the majority of innovations executed by companies were organization and marketing innovations; however, companies perceive product and process innovations as more important. It generally applies that almost every product innovation should invoke at least one process innovation. When, for example, a company begins to produce a new product, a need for necessary technology that is needed for production of a new product can arise. Such a need can be fulfilled by purchase of new machinery. This is innovation of a production process. In other cases, companies maybe do not even perceive changes executed in relation to product innovations as process innovations. When a company, e.g. as a result of a new product supply, modifies activities of its sales department, in reality it is a process innovation invoked by the initial product innovation. In some cases, even product innovation of a lower intensity invokes subsequent process innovation of a higher intensity. (Theodor, 2008) singles out the beginning of the Ford car factory, as an example. Even though its first mass-produced car, the Model T, meant an important product innovation, production organization through standardization, flow production, and Taylor principles of scientific management brought a lot of much more fundamental innovations. The Model T was designed in such a way that it prompted a need to completely innovate the process of its production. Without such process innovations, Henry Ford would not be able to achieve his plans for production of a standardized cheap car in large series.

The result of a significant innovation activity is logical because, in general, if organizations are not prepared to continually renew their products and processes, their chances of survival are significantly jeopardized.

The main motives leading to commencement of such innovation activities are especially factors of growth of revenues and, therefore, operation profits, reaction to demand, increased quality of products or services, and increased market share. The aforementioned motives are derived from innovation needs prompted by a customer, and they serve as a starting point for creation of innovation strategy.

The structure and intensity of competition and its more or less aggressive behaviour affects competition and innovation pressure. According to (Trommsdorff & Steinhoff, 2006), when identifying competitors, it is necessary to include, in addition to publicly acting competitors, also the potential ones, i.e. those who are not in the market yet or who do not engage in public tenders of the field in question, but have potential and strategy available. The majority of enquired companies (87%) monitor and know the competitors' strategy and, at the same time, 93% of respondents are therefore aware of their competitive advantage.

The process of formulating strategy results in production of an innovation plan that serves as the base for creation of other partial plans. Almost all inquired companies emphasize processing of short-term plans and plans for 1 year.

The conclusion derived from the aforementioned facts is that if a company wants to receive impulses for its further development and maintain its position on the top, it is necessary to always focus on a customer who should be perceived as a driving force for progress. Highquality relations have to be built between companies and their customers. Primary research results showed that an innovation impulse primarily arises from a customer.

During the last three years, the majority of innovations executed by companies were organization and marketing innovations; however, companies perceive product and process innovations as more important. It generally applies that almost every product innovation should invoke at least one process innovation. When, for example, a company begins to produce a new product, a need for necessary technology that is needed for production of a new product can arise. Such a need can be fulfilled by purchase of new machinery. This is innovation of a production process. In other cases, companies maybe do not even perceive changes executed in relation to product innovations as process innovations. When a company, e.g. as a result of a new product supply, modifies activities of its sales department, in reality it is a process innovation invoked by the initial product innovation. In some cases, even product innovation of a lower intensity invokes subsequent process innovation of a higher intensity. (Theodor, 2008) singles out the beginning of the Ford car factory, as an example. Even though its first mass-produced car, the Model T, meant an important product innovation, production organization through standardization, flow production, and Taylor principles of scientific management brought a lot of much more fundamental innovations. The Model T was designed in such a way that it prompted a need to completely innovate the process of its production. Without such process innovations, Henry Ford would not be able to achieve his plans for production of a standardized cheap

The result of a significant innovation activity is logical because, in general, if organizations are not prepared to continually renew their products and processes, their chances of

The main motives leading to commencement of such innovation activities are especially factors of growth of revenues and, therefore, operation profits, reaction to demand, increased quality of products or services, and increased market share. The aforementioned motives are derived from innovation needs prompted by a customer, and they serve as a

The structure and intensity of competition and its more or less aggressive behaviour affects competition and innovation pressure. According to (Trommsdorff & Steinhoff, 2006), when identifying competitors, it is necessary to include, in addition to publicly acting competitors, also the potential ones, i.e. those who are not in the market yet or who do not engage in public tenders of the field in question, but have potential and strategy available. The majority of enquired companies (87%) monitor and know the competitors' strategy and, at the same time, 93% of respondents are therefore aware of their competitive advantage.

The process of formulating strategy results in production of an innovation plan that serves as the base for creation of other partial plans. Almost all inquired companies emphasize

The conclusion derived from the aforementioned facts is that if a company wants to receive impulses for its further development and maintain its position on the top, it is necessary to always focus on a customer who should be perceived as a driving force for progress. Highquality relations have to be built between companies and their customers. Primary research

results showed that an innovation impulse primarily arises from a customer.

car in large series.

survival are significantly jeopardized.

starting point for creation of innovation strategy.

processing of short-term plans and plans for 1 year.

Individual innovation impulses are then target-collected by a company. During the collection, in-house networks are utilized, as well as networks of external co-workers; for example, authorized dealers, etc. In practice, collection that is rather informal is more often proven good; for example, via discussions with service technicians during assemblies. A customer does not feel so bound and is willing to handle matters that he would not even mention otherwise. With regards to their own potential, companies try to convert received impulses to innovation ideas that can be utilized during the following work. The main source of innovation ideas are then employees or management of companies. With regard to the fact that companies engage their employees in seeking innovation ideas, they are also trying to motivate them.

In personal interviews, managers of some companies admitted that they do not pay enough attention to transfer of marketing information, despite the existence of some information system. At the same time, marketing management within the innovation process is usually left out, especially in the case of small and medium-sized companies. Therefore, a company management loses its insight into environment and new trends, which can cause problems with distribution, downturn of revenues, decreased profit, and it can even lead to existential problems in the future.

These days, everybody is probably aware of the importance of high-quality and timely information for correct decision making. It is also considered a matter of fact that a company has to reflect the wishes of its customers and very closely monitor development on markets, otherwise it would not be able to react accordingly and maintain its position on markets. Therefore, companies should have marketing information systems (hereinafter the "MIS") implemented. Their necessity was ultimately highlighted by results of the primary research as well. In smaller companies, such system can even have a completely informal process when all the interested parties meet and discuss a problem. It is apparent that from a certain size of a company, such "system" is completely unsuitable, and a marketing information system has to be formalized and systemically built.

Unfortunately, as shown by the primary research, the majority of companies lack a sophisticated marketing information system, modeling and analysis of the future market, analyses of customers, their behavior and unsaid needs, definition of price strategies, and analysis of new expansion areas.

Information necessary for effective functioning of a marketing information system that is necessary for acquiring innovation impulses from the market and management of the whole innovation process with the objective of increases competitiveness of a company as a whole can originate from different sources. Information received from contacts between companies' employees and customers, competitors, and suppliers within business meetings, exhibitions and trade fairs, professional seminars, execution of maintenance and repairs, etc. are considered very important.

In the ideal situation, MIS serves the purpose of:

 Collection and transfer of information – thanks to computers and other communication means, collection and transfer of information is significantly faster and, also, costs of data collection decreased.

The Development and Implementation

their competitive advantage.

"breach" of human rights of employees (Solar, 2006).

of Marketing Information System Within Innovation: The Increasing of Innovative Performance 77

we know from experience of foreign companies that enforcement of a company's interests is possible, but it requires long-term influence on a company's culture and, sometimes, slight

Limited funds of small and medium-sized companies significantly limit possibilities of utilization of external information sources for MIS whose level keeps increasing, but prices of the services are high. Therefore, it is necessary to carefully consider every utilization of their services. Organizational provision of collection of free external data from the Internet and other external sources is also problematic for small and medium-sized companies. However, it applies to them as well, that even small and medium-sized companies have to collect, save, and utilize information so that they can improve their decision making, communication with customers, suppliers, and consumers so that they are able to maintain

Solution of marketing and MIS problems that are available in professional literature, e.g. (Ranchhod & Gurau, 2007), are very complex and systemic, but practically useless for small, as well as a lot of medium-sized companies. If we examine their organization structure, we will find out that marketing is often provided by one staff member who is organizationally placed either in the sales department, or the department of the company's CEO. There is the same staffing for controlling of small companies whose performance is again provided (in the optimistic variant) by one staff member usually placed in the financial department

The authors of the article see a possible solution in nomination of a team consisting of more professions that will ensure motivation and evaluation of results of collection of external and internal information for MIS by all the company's employees, solution of problems related to authorization of access to the information stored in MIS, evaluation of information from MIS from the aspect of comparison of the company's performance with its main competitors, and proposing measures within strategy updating. Such team should be led by a CFO, and it should consist of professions necessary for evaluation of products, technologies, customers, suppliers, and markets, i.e. representatives of all main functions in a company. Selection of particular team members would be carried out by a company CEO, in cooperation with a team leader. MIS would represent the technical provision of work of the team, and a designated worker also carrying out collection of internal and external

The proposed access would simplify realization of a necessary change of a style of work with information, regular saving of critical data to the system, and enable its sharing by other staff members. It is a complicated problem in the area of a company culture, and the proposed system of team management could contribute to its solution. It is necessary to realize that to acquire information is one thing, but to process it, interpret it, and subsequently use it is an entirely different thing. Therefore, it is necessary to think about an information system, create certain rules, procedures, and processes so that everybody in a

A complex marketing information system has a wide range of use in a company. It is able to inform on the current market development and performance of its own company, as well as

where such person is usually also assigned a lot of other functions.

information would be responsible for its operation.

competitors. The basic information structure of MIS is as follows:

company would know what to do.

Fig. 7. Scheme of MIS

The majority of renowned companies thoroughly monitor all their employees' contacts and information received about them. Such information is very important and, in principle, it is a company's asset because staff handles all dealing at its costs. It is a problem of effect of a company's culture and due verification of evaluation and a bonus system to make sure that staff members accept organization rules and enter information into MIS via standard forms. Especially for small and medium-sized companies, such a system is irreplaceable, but its accessibility is not easy. That is, employees consider acquired information their personal know-how and intend to utilize it for strengthening of their own positions only. However,

 Information processing – when data is saved, it has to be processed, which can sometimes be difficult without utilization of an information system, especially in a large

Data interpretation and modeling – information is useful only if it has a value for a user.

 Information utilization – thanks to an information system that integrates data processing techniques with data modeling and with analytical tools supporting strategic decisions, it is possible to utilize acquired information for marketing decision

**Planning and management**

Technical engineers Service men

Distributors Managers

The majority of renowned companies thoroughly monitor all their employees' contacts and information received about them. Such information is very important and, in principle, it is a company's asset because staff handles all dealing at its costs. It is a problem of effect of a company's culture and due verification of evaluation and a bonus system to make sure that staff members accept organization rules and enter information into MIS via standard forms. Especially for small and medium-sized companies, such a system is irreplaceable, but its accessibility is not easy. That is, employees consider acquired information their personal know-how and intend to utilize it for strengthening of their own positions only. However,

Marketing intelligence system

**Development so**

**far**  Customers Products Competitors

**Future development**  Customers Products Strategies Opportunities Competitors

Marketing research system

Collected information has to be put into context and interpreted.

Internal informational system

> Support system

volume of various data.

making on various levels.

Businessmen

**External data**  Environment Competitors Suppliers Customers Media Databases Internet Seminars **Internal data**  Own studies R&D Trade-fairs Exhibitions Catalogues Prospects

Fig. 7. Scheme of MIS

we know from experience of foreign companies that enforcement of a company's interests is possible, but it requires long-term influence on a company's culture and, sometimes, slight "breach" of human rights of employees (Solar, 2006).

Limited funds of small and medium-sized companies significantly limit possibilities of utilization of external information sources for MIS whose level keeps increasing, but prices of the services are high. Therefore, it is necessary to carefully consider every utilization of their services. Organizational provision of collection of free external data from the Internet and other external sources is also problematic for small and medium-sized companies. However, it applies to them as well, that even small and medium-sized companies have to collect, save, and utilize information so that they can improve their decision making, communication with customers, suppliers, and consumers so that they are able to maintain their competitive advantage.

Solution of marketing and MIS problems that are available in professional literature, e.g. (Ranchhod & Gurau, 2007), are very complex and systemic, but practically useless for small, as well as a lot of medium-sized companies. If we examine their organization structure, we will find out that marketing is often provided by one staff member who is organizationally placed either in the sales department, or the department of the company's CEO. There is the same staffing for controlling of small companies whose performance is again provided (in the optimistic variant) by one staff member usually placed in the financial department where such person is usually also assigned a lot of other functions.

The authors of the article see a possible solution in nomination of a team consisting of more professions that will ensure motivation and evaluation of results of collection of external and internal information for MIS by all the company's employees, solution of problems related to authorization of access to the information stored in MIS, evaluation of information from MIS from the aspect of comparison of the company's performance with its main competitors, and proposing measures within strategy updating. Such team should be led by a CFO, and it should consist of professions necessary for evaluation of products, technologies, customers, suppliers, and markets, i.e. representatives of all main functions in a company. Selection of particular team members would be carried out by a company CEO, in cooperation with a team leader. MIS would represent the technical provision of work of the team, and a designated worker also carrying out collection of internal and external information would be responsible for its operation.

The proposed access would simplify realization of a necessary change of a style of work with information, regular saving of critical data to the system, and enable its sharing by other staff members. It is a complicated problem in the area of a company culture, and the proposed system of team management could contribute to its solution. It is necessary to realize that to acquire information is one thing, but to process it, interpret it, and subsequently use it is an entirely different thing. Therefore, it is necessary to think about an information system, create certain rules, procedures, and processes so that everybody in a company would know what to do.

A complex marketing information system has a wide range of use in a company. It is able to inform on the current market development and performance of its own company, as well as competitors. The basic information structure of MIS is as follows:

The Development and Implementation

**6. Conclusion**

**7. Acknowledgement**

197-220, ISSN 1097-0266

**8. References**

of Marketing Information System Within Innovation: The Increasing of Innovative Performance 79

MIS implementation itself, from preparation, over installation, to verification lasts several months; however, significant contributions for management can be expected only after databases are filled, i.e. within 1 to 2 years. The authors also perceive utilization of the newest versions of MIS in small companies as problematic. Here, upon agreement with a supplier, it will be necessary to accede to implementation of simplified versions because the newest versions – very extensive ones – could not be filled and it would not even make sense to fill them because of significantly simplified process, as well as the organization structure of small companies. These requirements are logical, and the system supplier should be able to flexibly react to them. The ability of a supplier to ensure interconnection

The article summarizes the issue of management of innovation activities and findings of empirical research. It strives to show the importance of information provision of innovation activities linked to the overall effectiveness and competitiveness of an entrepreneurship. As the research proved, information support for modeling of future markets, analyses of customers, their behavior, and needs is extremely important in innovation marketing and, therefore, innovation activities should be supported by a successfully implemented and functioning marketing information system. Only then, is it possible to recognize and process potential innovation signals, acquire necessary information, and carry out decisions as for

Several hypotheses were declared before the research was commenced. In the area of potential predetermining more or less innovative companies, a company's size used to be considered the key factor when innovation activities are usually undertaken by large and medium-sized companies that have sufficient resources for it. However, this hypothesis was not confirmed because in the South Moravian Region, the majority of innovations are undertaken by micro

In the marketing area, it was assumed that direct expression of effects of innovation activities strongly depends on market development prognoses, and marketing information systems have to help with their predictions. Based on the found facts and statistic

The author would like to thank participants at the research survey and Faculty of Business

Ahuja, G. & Katila, R. (2001). Technological acquisition and the innovative performance of

Allak, B. (2010). Evaluating the Adoption and use Internet–based Marketing Information

acquiring firms: a longitudinal study. *Strategic Management Journal,* Vol. 22, No. 3,

system to Improve Marketing Intelligence (The Case of Tourism SMEs in Jordan). *International Journal of Marketing Studies*, Vol. 2, No. 2, 87-101, ISSN 1918-719X Dinis, A. (2004). Marketing and Innovation: Useful tools for competitiveness in rural and Peripheral Area. *European Planning Studies*, Vol. 14, No. 1, 9-22, ISSN 0965- 4313

and Management BUT for its support within research projects and this publication.

between MIS and the existing basic ERP system is also a limiting factor.

which innovations a company would focus and spend resources on.

independency test, it is possible to declare this hypothesis confirmed.

companies and small companies (these groups form a total of 75% respondents).

In addition to the basic structure, MIS can also contain software tools for execution of analyses (SWOT, Pareto, Portfolio, etc.), management of projects, administrative activities, and various supporting tasks. By utilizing information from MIS, it is possible to decrease risks of strategic decisions, prepare to a high standard for dealing with partners, increase purchase effectiveness, or improve the marketing mix for a certain product.

Necessary condition for developments in marketing and innovation activities is working MIS. MIS should be an indivisible part of the Executive Information System (hereinafter the "EIS"). Currently there are many Enterprise Resource Planning (hereinafter the "ERP") systems to choose from. These ERP systems can be enhanced when connected to Supply Chain Management (hereinafter the "SCM") and Customer Relationship Management (hereinafter the "CRM") systems. In the Czech Republic the EISs which support decision making are not used very frequently. An array of large Czech companies therefore implements the MIS as a way to improve their existing ERP system. Some ERP systems partially serve as SCM and CRM with obvious limitations. The philosophy of integration of the MIS into the existing IS is demonstrated in Figure 8.

Fig. 8. Scheme of the integration of the MIS into the existing IS structure

MIS implementation itself, from preparation, over installation, to verification lasts several months; however, significant contributions for management can be expected only after databases are filled, i.e. within 1 to 2 years. The authors also perceive utilization of the newest versions of MIS in small companies as problematic. Here, upon agreement with a supplier, it will be necessary to accede to implementation of simplified versions because the newest versions – very extensive ones – could not be filled and it would not even make sense to fill them because of significantly simplified process, as well as the organization structure of small companies. These requirements are logical, and the system supplier should be able to flexibly react to them. The ability of a supplier to ensure interconnection between MIS and the existing basic ERP system is also a limiting factor.

### **6. Conclusion**

78 Entrepreneurship – Creativity and Innovative Business Models

 Information on market objects (products and services purchased, as well as produced). Information on business cases (data transfer from customers' and suppliers' invoices).

In addition to the basic structure, MIS can also contain software tools for execution of analyses (SWOT, Pareto, Portfolio, etc.), management of projects, administrative activities, and various supporting tasks. By utilizing information from MIS, it is possible to decrease risks of strategic decisions, prepare to a high standard for dealing with partners, increase

Necessary condition for developments in marketing and innovation activities is working MIS. MIS should be an indivisible part of the Executive Information System (hereinafter the "EIS"). Currently there are many Enterprise Resource Planning (hereinafter the "ERP") systems to choose from. These ERP systems can be enhanced when connected to Supply Chain Management (hereinafter the "SCM") and Customer Relationship Management (hereinafter the "CRM") systems. In the Czech Republic the EISs which support decision making are not used very frequently. An array of large Czech companies therefore implements the MIS as a way to improve their existing ERP system. Some ERP systems partially serve as SCM and CRM with obvious limitations. The philosophy of integration of

Information on market subjects (suppliers, customers, competitors).

Information on contacts (evaluation of contacts, planning of contacts).

purchase effectiveness, or improve the marketing mix for a certain product.

Fig. 8. Scheme of the integration of the MIS into the existing IS structure

Information on demands (filling, performance evaluation).

the MIS into the existing IS is demonstrated in Figure 8.

The article summarizes the issue of management of innovation activities and findings of empirical research. It strives to show the importance of information provision of innovation activities linked to the overall effectiveness and competitiveness of an entrepreneurship. As the research proved, information support for modeling of future markets, analyses of customers, their behavior, and needs is extremely important in innovation marketing and, therefore, innovation activities should be supported by a successfully implemented and functioning marketing information system. Only then, is it possible to recognize and process potential innovation signals, acquire necessary information, and carry out decisions as for which innovations a company would focus and spend resources on.

Several hypotheses were declared before the research was commenced. In the area of potential predetermining more or less innovative companies, a company's size used to be considered the key factor when innovation activities are usually undertaken by large and medium-sized companies that have sufficient resources for it. However, this hypothesis was not confirmed because in the South Moravian Region, the majority of innovations are undertaken by micro companies and small companies (these groups form a total of 75% respondents).

In the marketing area, it was assumed that direct expression of effects of innovation activities strongly depends on market development prognoses, and marketing information systems have to help with their predictions. Based on the found facts and statistic independency test, it is possible to declare this hypothesis confirmed.

### **7. Acknowledgement**

The author would like to thank participants at the research survey and Faculty of Business and Management BUT for its support within research projects and this publication.

#### **8. References**

**5**

*Brazil*

**Brazilian Entrepreneurship Reality:**

Eric Charles Henri Dorion, Eliana Andrea Severo, Pelayo Munhoz Olea and Cristine Hermann Nodari

*University of Caxias do Sul, Caxias do Sul,*

**A Trilogy of Imitation, Invention and Innovation**

There are a lot of discussions on the characteristics of the successful businessman, who contributes to development of the economy through wealth creation. There are many authors who talk about such businessman as someone innovative, creator of differences, creative in services or business, or else. For theses reasons it is intended to study the entrepreneurial and innovative dimensions, more precisely in a Brazilian context, discussing innovation from the inside in a business perspective. From this discussion, it is our objective to demonstrate that Brazilian people are either entrepreneurs or inventors but not so innovative. On one hand, there is a clear perception related to new business opportunities but most of them are in an imitation process of existing businesses. On the other hand, Brazil is offering an extensive network of incubators that create inventors instead of

This chapter shows an extended bibliographic research about different concepts that various authors have related to entrepreneurship and innovation in order to consequently, discuss such concepts, comparing them to data from researches on Brazilian entrepreneurs about

Pirich et al. (2001) mentions that observing innovation jointly with entrepreneurship are consequent on three key elements: economical conditions and encouraging incentive of business behavior; sophistication and efficiency in generating and spreading knowledge and

The ANPROTEC (2006) literature demonstrates that entrepreneurship and innovation refer to a stimulus or support in the creation process of new ventures; it also refers to the preparation of people to act in new market shares, proposition of new ways to take profit of regional potentialities as well as local qualities to create new products and services, involving a community to discuss forms of economical empowerment for its region and create a favorable environment to emerge creative ideas that may generate in new

Schumpeter (1934) mentions that entrepreneurship behavior is a configuration of competitiveness in search of combinations of elements that generate innovation. For

the proper capability of companies, employees, and individuals.

**1. Introduction**

entrepreneurs.

businesses.

innovativeness of their business.

### **Brazilian Entrepreneurship Reality: A Trilogy of Imitation, Invention and Innovation**

Eric Charles Henri Dorion, Eliana Andrea Severo, Pelayo Munhoz Olea and Cristine Hermann Nodari *University of Caxias do Sul, Caxias do Sul, Brazil*

#### **1. Introduction**

80 Entrepreneurship – Creativity and Innovative Business Models

Doloreux, D. (2004). Regional Networks of Small and Medium Sized Enterprises: Evidence

Ernst, H. (2001). Patent applications and subsequent changes of performance: evidence from

Hamel, G. & Green, B. (2007). *The Future of Management*. Harvard Business School Press,

Hauser, J.; Tellis, J. G. & Griffin, A. (2006). Research on Innovation: A Reviwe and Agenda for Marketing Science. *Marketing Science*, Vol. 25, No. 6, 687-717, ISSN 0732- 2399 Chatyipanagiotou, K.; Vassilikopoulou, A. & Siomkos, G. (2008). An Empirical investigation

Kislingerova, E. (2008). *Inovace nastroju ekonomiky a managementu organizaci*, C.H.Beck, ISBN

Kosturiak, J. & Chal, J. (2008). *Inovace: Vase konkurencni vyhoda*, Computer press, ISBN 978-

Maciariello, J. (2009). Marketing and Innovation it he Drucker Management system. *Journal of the Academy of Marketing Science*, Vol. 37, No. 1, 35-49, ISSN 0092- 0703 OECD (2005). *Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data*, OECD

Ranchhod, A. & Gurau, C. (2007). *Marketing Strategies a Contemporary Approach*, Pearson

Reid, R. & Bojanic, D. (2009). *Hospitality Marketing Management*, Wiley, ISBN 978-0-4700-

Schumpeter, J. (1912). *Theorie der wirtschaftlichen Entwicklung*, Duncker und Humblot,

Skarzynski, P. & Gibson, R. (2008). *Innovation to the Core: A Blueprint for Transforming the Way*

Solar, J. (2006). The Problems of Efficient Functioning Appraising the Efficiency and

Stuart, T. (2000). Interorganizational alliances and the performance of firms: a study of

Synek, M. (2011). *Manazerska ekonomika,* Grada Publishing, ISBN 978-80-247-3494-1, Prague,

Theodor, M. (2008). Intensity of innovations and impulses of innovations. *Ekonomika a*

Tidd, J. & Bessant, J. (2009). *Managing Innovation: Integrating Technological, Market and Organizational Change*, Wiley, ISBN 978-0-4709-9810-6, West Sussex, U.K. Trommsdorff, V. & Steinhoff, F. (2006). *Innovationsmarketing*, Vahlen, ISBN 978-3-8006-2022-

Valenta, F. (2001). *Inovace v manazerske praxi*, Velryba, ISBN 80-85860-11-2, Prague, Czech

Zizlavsky, O. (2009). *Approaches to Innovation Performance Increasing in Manufacturing Companies*, Brno University of Technology, ISBN 978-80-214-4091-3, Brno, Czech Republic

*Your Company Innovates*, Harvard Business School Press, ISBN 978-1-4221-0251-0,

Benchmarking in the Production Companies, *Proceedings of Management, Economics and Business Development in the New European Conditions*, ISBN 80-7204-454-0, Brno, May 2006

growth and innovation rates in a high-technology industry. *Strategic Management*

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80-251-1929-7, Brno, Czech Republic

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*Journal,* Vol. 21, No. 8, 791-811, ISSN 1097-0266

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from the Metropolitan Area of Ottawa in Canada. *European Planning Studies*, Vol.

time-series cross-section analyses on the firm level. *Research Policy,* Vol 30, No. 1,

of the relationship between market orientation and MrkIS effectiveness in upscale hotels in Greece. *Journal of Targeting, Measurement and Analysis for Marketing*, Vol.

> There are a lot of discussions on the characteristics of the successful businessman, who contributes to development of the economy through wealth creation. There are many authors who talk about such businessman as someone innovative, creator of differences, creative in services or business, or else. For theses reasons it is intended to study the entrepreneurial and innovative dimensions, more precisely in a Brazilian context, discussing innovation from the inside in a business perspective. From this discussion, it is our objective to demonstrate that Brazilian people are either entrepreneurs or inventors but not so innovative. On one hand, there is a clear perception related to new business opportunities but most of them are in an imitation process of existing businesses. On the other hand, Brazil is offering an extensive network of incubators that create inventors instead of entrepreneurs.

> This chapter shows an extended bibliographic research about different concepts that various authors have related to entrepreneurship and innovation in order to consequently, discuss such concepts, comparing them to data from researches on Brazilian entrepreneurs about innovativeness of their business.

> Pirich et al. (2001) mentions that observing innovation jointly with entrepreneurship are consequent on three key elements: economical conditions and encouraging incentive of business behavior; sophistication and efficiency in generating and spreading knowledge and the proper capability of companies, employees, and individuals.

> The ANPROTEC (2006) literature demonstrates that entrepreneurship and innovation refer to a stimulus or support in the creation process of new ventures; it also refers to the preparation of people to act in new market shares, proposition of new ways to take profit of regional potentialities as well as local qualities to create new products and services, involving a community to discuss forms of economical empowerment for its region and create a favorable environment to emerge creative ideas that may generate in new businesses.

> Schumpeter (1934) mentions that entrepreneurship behavior is a configuration of competitiveness in search of combinations of elements that generate innovation. For

Brazilian Entrepreneurship Reality: A Trilogy of Imitation, Invention and Innovation 83

XVII Century Person who would take risks for profit (or loss) in a contract of fixed

1725 Richard Cantillon – a person who takes risks is different from the one

1803 Jean Baptiste Say – enterpriser's profits are separate from the capital

1934 Joseph Schumpeter – the entrepreneur is an innovative person and develops technology that has not been tested yet 1961 David McClelland – the entrepreneur is someone dynamic who takes

1975 Albert Shapero – the entrepreneur has initiative, organizes some social

1980 Karl Vesper – the entrepreneur is differently perceived from the point of

1983 Gifford Pinchot – the intra entrepreneur is an entrepreneur who acts

1985 Robert Hisrich – entrepreneurship is the process of creating something

The economists understand entrepreneurship is motivated in the comprehension of its interlink to the economical system. Thus, they understand entrepreneurs are responsible for detecting and making a good use of opportunities; foreseeing profit and (re) acting to some risks (Filion, 1991; Paiva Jr. & Cordeiro, 2002). Schumpeter believes the entrepreneur is responsible for a process he called creative destruction, the fundamental impulse to trigger and keep on working in the capitalist economy. This person, according to the author, should constantly create new products, new production methods, new markets, implacably

The function of the entrepreneur is to reform or to revolutionize the production pattern by exploring an invention or, more generically, a technological possibility not tested yet, in order to produce new goods or to find another way of producing something that already exists. It may happen through the discovery of new supply sources or new distribution for products, or through the organization of a new industry (live translation from Schumpeter,

view of economists, psychologists, businessmen or politicians

receiving the consequent rewards of economical and personal

different and with value, spending time and necessary efforts to do so, assuming corresponding financial, psychological, and social risks, and

1964 Peter Drucker – the entrepreneur maximizes opportunities

and economical mechanisms and takes risks

Table 1. Development of the theory of entrepreneurship and of the entrepreneur

overcoming old methods that are less efficient and more expensive.

1876 Francis Walker – he distinguished between the ones who would support

founds and receive from taxes and the ones who would gain from

 Evolution of the theories on entrepreneurship and on the entrepreneur Middle Age Person in charge of projects for large scale production

value with the government

who offers capital

management abilities

inside an organization

satisfaction

Source: Hisrich & Peters (2001)

1934).

moderate risks

profits

Drucker (1985), innovation is a specific instrument for entrepreneurs in a way to explore changes as an opportunity for a different business or services. Entrepreneurs must deliberatively look for innovation sources, changes and their symptoms, which indicate opportunities so that innovation can happen and be successful.

Throughout times, Schumpeter's (1934) point of view became predominant: the entrepreneur is the engine to move the economy forward, the agent of innovation and changes, able to trigger economical growth. This is very important, because it means that communities, through their entrepreneurial activity, may have the initiative to lead and coordinate efforts for their own economical growth. There is a possibility to change economical and social stagnation curve by inducing innovative activities, capable of joining economical and social values (Dolabela, 1999:54).

The entrepreneur is the agent of creative destruction process. It is a fundamental impulse to start and keep on going the capitalist engine, constantly creating new products, new markets, and, implacably, overcoming old methods less efficient and more expensive (Schumpeter, 1934).

Innovation emerges to entrepreneurs as advantages from the point of view of economical prosperity. It allows developing new products or services for the market as well as it stimulates interest in investing in newborn businesses.

This chapter initially presents various concepts throughout time related to entrepreneurship and innovation. Then it discusses imitation as a form of entrepreneurship from many authors' points of view and afterwards, it presents the challenges for entrepreneurship in Brazil. It shows figures related to new businesses, their importance for the economy in this country and after that presents some data related to innovation in the industry.

It has the objective to confront the profile of the most common behavior in Brazilian industry. As a result of various researches realized, it is possible to demonstrate that Brazilian entrepreneurs are either, in most cases, in a deliberate imitation process of existing businesses, or engaged in an incubating process based on product invention, still with a poor innovative profile. These conclusions allow discussing entrepreneurship concepts presented by several authors that mostly tend to characterize the entrepreneur as someone who is primarily active but not necessarily very creative, innovative.

### **2. Theoretical thoughts of entrepreneurship thru time**

The Word "entrepreneurship" means to deliberate about practices, to propose them and put them into execution, to try it on. The first definition of an entrepreneur as a broker is Marco Polo, who tried to establish commercial routes to the Far East (Hisrich & Peters, 2001).

In the XII century, an entrepreneur was someone who used to incite fights. Later in the XVII century, it meant someone who was responsible for and coordinator of a military action. Only by the end of the XVII century and beginning of the XVIII century, the word referred to someone who created or ruled enterprises. The following Table shows the evolution of the theory of entrepreneurship and of the entrepreneur.

Source: Hisrich & Peters (2001)

82 Entrepreneurship – Creativity and Innovative Business Models

Drucker (1985), innovation is a specific instrument for entrepreneurs in a way to explore changes as an opportunity for a different business or services. Entrepreneurs must deliberatively look for innovation sources, changes and their symptoms, which indicate

Throughout times, Schumpeter's (1934) point of view became predominant: the entrepreneur is the engine to move the economy forward, the agent of innovation and changes, able to trigger economical growth. This is very important, because it means that communities, through their entrepreneurial activity, may have the initiative to lead and coordinate efforts for their own economical growth. There is a possibility to change economical and social stagnation curve by inducing innovative activities, capable of joining

The entrepreneur is the agent of creative destruction process. It is a fundamental impulse to start and keep on going the capitalist engine, constantly creating new products, new markets, and, implacably, overcoming old methods less efficient and more expensive

Innovation emerges to entrepreneurs as advantages from the point of view of economical prosperity. It allows developing new products or services for the market as well as it

This chapter initially presents various concepts throughout time related to entrepreneurship and innovation. Then it discusses imitation as a form of entrepreneurship from many authors' points of view and afterwards, it presents the challenges for entrepreneurship in Brazil. It shows figures related to new businesses, their importance for the economy in this

It has the objective to confront the profile of the most common behavior in Brazilian industry. As a result of various researches realized, it is possible to demonstrate that Brazilian entrepreneurs are either, in most cases, in a deliberate imitation process of existing businesses, or engaged in an incubating process based on product invention, still with a poor innovative profile. These conclusions allow discussing entrepreneurship concepts presented by several authors that mostly tend to characterize the entrepreneur as someone

The Word "entrepreneurship" means to deliberate about practices, to propose them and put them into execution, to try it on. The first definition of an entrepreneur as a broker is Marco Polo, who tried to establish commercial routes to the Far East (Hisrich & Peters,

In the XII century, an entrepreneur was someone who used to incite fights. Later in the XVII century, it meant someone who was responsible for and coordinator of a military action. Only by the end of the XVII century and beginning of the XVIII century, the word referred to someone who created or ruled enterprises. The following Table shows the evolution of

country and after that presents some data related to innovation in the industry.

who is primarily active but not necessarily very creative, innovative.

**2. Theoretical thoughts of entrepreneurship thru time**

the theory of entrepreneurship and of the entrepreneur.

opportunities so that innovation can happen and be successful.

economical and social values (Dolabela, 1999:54).

stimulates interest in investing in newborn businesses.

(Schumpeter, 1934).

2001).

Table 1. Development of the theory of entrepreneurship and of the entrepreneur

The economists understand entrepreneurship is motivated in the comprehension of its interlink to the economical system. Thus, they understand entrepreneurs are responsible for detecting and making a good use of opportunities; foreseeing profit and (re) acting to some risks (Filion, 1991; Paiva Jr. & Cordeiro, 2002). Schumpeter believes the entrepreneur is responsible for a process he called creative destruction, the fundamental impulse to trigger and keep on working in the capitalist economy. This person, according to the author, should constantly create new products, new production methods, new markets, implacably overcoming old methods that are less efficient and more expensive.

The function of the entrepreneur is to reform or to revolutionize the production pattern by exploring an invention or, more generically, a technological possibility not tested yet, in order to produce new goods or to find another way of producing something that already exists. It may happen through the discovery of new supply sources or new distribution for products, or through the organization of a new industry (live translation from Schumpeter, 1934).

Brazilian Entrepreneurship Reality: A Trilogy of Imitation, Invention and Innovation 85

GEM (2000) determines entrepreneurship as any tentative of creating a new business or a new enterprise; for example, autonomous activities, a new company or expanding an existing business. These initiatives may come from an individual, from groups of people or

Concluding, we may understand that entrepreneurship has various perspective of study, including economical, political, social, cultural and compartmental issues. To Hisrich & Peters (2001), entrepreneurship is a dynamic process of creating more wealth to a region, for

Despite a strong consensus in conceptualizing innovation as "something new", there also is a great disagreement about what may be considered "new". Once newness is a situational quality, it is possible to presume innovation is situational as well. If something is new for some sort of environment, it may be seen as innovation, even if it is well known by others

One of the pioneers and still up to now the most distinguished author in the innovation area, Chris Freeman used to point that one of the problems in managing innovation is the great range of understandings people have of this word, frequently confusing its meaning to invention. Innovation is the process of making new ideas from opportunities and putting

For Plonski (2005), confusion happens because of three misunderstandings: *reductionism* (considering innovation only as a technological basis), *enchantment* (considering technological innovation as spectacular), and *mischaracterization* (relaxing on the

By the end of the XIX century and beginning of the XX century, entrepreneurs and managers were not distinguished. So, in order to make a difference between those who never invented anything, but would adapt a new technology in creating products to reach an economical vitality, it was established the notion of entrepreneur as an innovative person (Hisrich &

Schumpeter (1934) points out this way: "The function of the entrepreneur is to rebuild or to revolutionize the production pattern by exploring an invention or, more generally, a nonexperimented method, in order to produce a new good or a new commercialization for

Entrepreneurship, for the economists, is the engine of the economical system. According to

Entrepreneurs are agents of changes; they make things new and different. One can only call a person entrepreneur if he contributes with something new (Filion, 2001). Schumpeter, Hoselitz, Cole, Gartner, and Dollinger (Paiva Jr & Cordeiro, 2002) conceptualize the practice of entrepreneurship as the act of creating an economical and innovative organization for the

Schumpeter, taking profit from new opportunities is connected to innovation.

purpose of getting profit or increasing under conditions of risks and uncertainty.

from companies that are already established.

**3. Concept of innovation in an academic perspective**

them into practice of an extensive use (Plonski, 2005).

technological change requisite for the innovation).

the benefit of its own community.

(Moreira & Queiroz, 2007).

Peters, 2001).

goods, organizing a new sector".

Behaviorists' school refers to psychologists, psychiatrists, sociologists, and others who are specialists in human behavior (Filion, 1991). For them, entrepreneurship is more than increasing production or the *per capita* income because it involves starting and building changes in the structure of the business and of the society. This transformation happens while production increases and there is more wealth to be shared among participants. Entrepreneurship is an efficient method that links science to the market economy, creating new companies and bringing new products or services to the world of business (Hisrich & Peters, 2001).

The modern definition of entrepreneurship described by Filion (2001) covers essential elements of its specific characteristics: An entrepreneur is a person who imagines, develops, and executes visions.

Hisrich & Peters (2001) indicates that even if there is some divergence among concepts related to entrepreneur, there is a common understanding for a specific behavior that includes having initiative, to organize and reorganize social and economical mechanisms to transform resources and situations to take a practical profit and accept risk or failure. Table 2 is a matrix of quotations of these characteristics throughout time.

Source: Elaborated by the authors.

Table 2. Matrix of quotations of entrepreneur's characteristics throughout time

Behaviorists' school refers to psychologists, psychiatrists, sociologists, and others who are specialists in human behavior (Filion, 1991). For them, entrepreneurship is more than increasing production or the *per capita* income because it involves starting and building changes in the structure of the business and of the society. This transformation happens while production increases and there is more wealth to be shared among participants. Entrepreneurship is an efficient method that links science to the market economy, creating new companies and bringing new products or services to the world of business (Hisrich &

The modern definition of entrepreneurship described by Filion (2001) covers essential elements of its specific characteristics: An entrepreneur is a person who imagines, develops,

Hisrich & Peters (2001) indicates that even if there is some divergence among concepts related to entrepreneur, there is a common understanding for a specific behavior that includes having initiative, to organize and reorganize social and economical mechanisms to transform resources and situations to take a practical profit and accept risk or failure. Table

1963 Davids Ambition, desire for independence, responsibility, self-

1964 Pickle Human relationship, communication ability, knowledge of

1971 Hornaday & Aboud Need for realization, autonomy, aggressiveness, power,

1978 Timmons Self-confidence, target guided, moderate-risk taker, control center, creativity, innovation

1981 Welsh & White Need for control, responsibility aimer, self-confidence, moderate-risk taker

Cooper Growth guided, be professional, independence

Table 2. Matrix of quotations of entrepreneur's characteristics throughout time

recognition, innovation, independence

confidence

1980 Sexton Energetic, ambitious, positive reverse

the technique

2 is a matrix of quotations of these characteristics throughout time.

1917 Weber Origin of formal authority 1934 Schumpeter Innovation, initiative 1954 Sutton Search for responsibility 1959 Hartman Search for formal authority 1961 McClelland Risk taker and need for realization

**Date Author Characteristics**  1848 Mill Tolerance to risk

1971 Palmer Risk evaluator

1973 Winter Need for power 1974 Borland Internal control 1974 Liles Need for realization 1977 Gasse Guided by personal values

1982Dunkelberg &

Source: Elaborated by the authors.

Peters, 2001).

and executes visions.

GEM (2000) determines entrepreneurship as any tentative of creating a new business or a new enterprise; for example, autonomous activities, a new company or expanding an existing business. These initiatives may come from an individual, from groups of people or from companies that are already established.

Concluding, we may understand that entrepreneurship has various perspective of study, including economical, political, social, cultural and compartmental issues. To Hisrich & Peters (2001), entrepreneurship is a dynamic process of creating more wealth to a region, for the benefit of its own community.

#### **3. Concept of innovation in an academic perspective**

Despite a strong consensus in conceptualizing innovation as "something new", there also is a great disagreement about what may be considered "new". Once newness is a situational quality, it is possible to presume innovation is situational as well. If something is new for some sort of environment, it may be seen as innovation, even if it is well known by others (Moreira & Queiroz, 2007).

One of the pioneers and still up to now the most distinguished author in the innovation area, Chris Freeman used to point that one of the problems in managing innovation is the great range of understandings people have of this word, frequently confusing its meaning to invention. Innovation is the process of making new ideas from opportunities and putting them into practice of an extensive use (Plonski, 2005).

For Plonski (2005), confusion happens because of three misunderstandings: *reductionism* (considering innovation only as a technological basis), *enchantment* (considering technological innovation as spectacular), and *mischaracterization* (relaxing on the technological change requisite for the innovation).

By the end of the XIX century and beginning of the XX century, entrepreneurs and managers were not distinguished. So, in order to make a difference between those who never invented anything, but would adapt a new technology in creating products to reach an economical vitality, it was established the notion of entrepreneur as an innovative person (Hisrich & Peters, 2001).

Schumpeter (1934) points out this way: "The function of the entrepreneur is to rebuild or to revolutionize the production pattern by exploring an invention or, more generally, a nonexperimented method, in order to produce a new good or a new commercialization for goods, organizing a new sector".

Entrepreneurship, for the economists, is the engine of the economical system. According to Schumpeter, taking profit from new opportunities is connected to innovation.

Entrepreneurs are agents of changes; they make things new and different. One can only call a person entrepreneur if he contributes with something new (Filion, 2001). Schumpeter, Hoselitz, Cole, Gartner, and Dollinger (Paiva Jr & Cordeiro, 2002) conceptualize the practice of entrepreneurship as the act of creating an economical and innovative organization for the purpose of getting profit or increasing under conditions of risks and uncertainty.

Brazilian Entrepreneurship Reality: A Trilogy of Imitation, Invention and Innovation 87

entrepreneurs who open similar business, whether with the same product or processes, or

Consequently, it can be considered that there is the individual who is, in fact, either an agent of change, as suggested by (Filion, 1992), or there is this other individual who does not opt for change, but more for copying what is already available in the market, without producing something new for its community. Both types can be considered equally as an entrepreneur,

According to Schumpeter (1934), it is proposed three basic phases to define the process of innovation: (i) invention, as a result of a discovery process, new technical principles, potentially opened for commercial exploration but not necessarily carried through; (ii) innovation, as a process of development of an invention for commercial purpose and; (iii) diffusion, as the expansion of an innovation of commercial use, new products and processes. Pinchot (1985) also indicates the distinction between innovation and invention. Invention consists in the creation of a new concept; but innovation not only demands invention, but

For Schumpeter (1934), inventions are economically irrelevant; considering that innovations are conversions of suitable inventions into consumer's habits and contribute, therefore, to

The difference between the entrepreneur and the inventor is that the entrepreneur uses his creativity combined with his management abilities and his knowledge of the businesses to identify opportunities to innovate. The inventor does not have any commitment to create something with economic results; his motivation is the creation, the discovery and nothing

It is obvious that in joining the attributes of entrepreneurship and innovation to one individual constitutes the best combination for economic growth, because it creates an ideal mix which results in the opening of new enterprises focused on innovation, which creates exclusive and new market demands. Innovation constitutes one constant challenge for the organizations, considering the inherent risks and the advantages that it can generate. The risks are the consequences of the consumption of resources without getting returns, or even worse, not to spend and not to be prepared duly for the future challenges (Dorion et al.,

In this sense, Paiva Jr. & Cordeiro (2002) defines the entrepreneur as being a person who initiates a business or a person who operates and develops it. For them, the entrepreneur is the person who destroys the economic order already existing thru the introduction, in the market, of new products/services, with the creation of new forms of management or thru

When there is a surplus of information in a specific process, imitation becomes a convenient heuristic resource. Considering the epistemological sense of the concept of imitation, imitation itself does not consist in a worthless resource; to the contrary, it represents the fundaments of learning and language, contributing to social cohesion and is the natural mechanism for both inspiration and aspiration. It can also be considered a rational economic

considering that both have some of the characteristics of the entrepreneur.

the transformation of the invention into a commercial success.

the exploration of new resources, materials and technologies.

either in the same region.

economic development.

more (Dornelas, 2003, p. 18).

option (Bonabeau, 2004).

2008).

The difference between the entrepreneur and the inventor is that the first one uses his creativity connected to his management abilities and business knowledge to identify opportunities to innovate. The inventor does not have the commitment of creating something with economical objectives; his motivation is the creation itself, the discovery, and nothing else (Dornelas, 2003).

#### **4. Innovation profile and its relation with entrepreneurship**

With respect to innovation profile, it is known of a strong consensus on understanding its concept as "something new". Nevertheless, there is great disagreement on what can be considered as "new". Since "newness" is a situational quality, it can be presumed that innovation is situational, if something is new for environmental data, it can be considered as innovation. One of the problems in managing innovation comes from the variety of understandings that researchers have on this term, frequently confusing it with the concept of invention. For Plonski (2005), this confusion happens for three reasons: reductionism (to only consider innovation as a technological matter), enchantment (to consider technological innovation spectacular) and un-characterization (to ease the requirement of technological change in an innovation).

Throughout history, more specifically in the XVIIIth century, Adam Smith relates the accumulation of capital with manufacturing technology; studying the concepts related to technological change, to division of work and, to growth of production and competitiveness. In the XIXth century, List was considered a pioneer to introduce the concept of intangible investment. For him, the condition of a country is the result of the set of all the discoveries, inventions, improvements, up-grades and efforts of all the generations that had lived before us: this forms the intellectual capital of the human race. Marx and Schumpeter analyzed the concept of technology under the perspective of economic development. For Schumpeter (1934), it is necessary to develop ways to combine material and knowledge in order to promote economic development; consequently, it is necessary to introduce new combinations, which are known as innovative processes. At the beginning of the XXth century, there still was no research that distinguished the characteristics of an entrepreneur from the ones of a manager. To differentiate the characteristics of the ones who did not invent from the ones who used new technologies for the creation and the development of new products, to reach economic vitality, it was established the notion of the entrepreneur as innovative (Hisrich & Peters, 2001).

The function of the entrepreneur is to remodel or to revolutionize the production standard exploring an invention or, in a more general way, a non experimented method, to produce a new good or for the commercialization of products, in a new sector (Schumpeter 1934).

For Schumpeter, the proper advantage of new opportunities is associated to innovation. For Drucker (1985), innovation is an act that contemplates the resources with a new capacity to create wealth. "Entrepreneur is an agent of change; it makes new and different things. It can only be called an entrepreneur if it contributes to something new." (Filion, 1992).

Schumpeter, Hoselitz, Cole, Gartner e Dollinger appraise the practice of entrepreneurship as an act of creation of an economic and innovative organization with the intention to get profitability or growth under risk conditions and uncertainty. However, there are some

The difference between the entrepreneur and the inventor is that the first one uses his creativity connected to his management abilities and business knowledge to identify opportunities to innovate. The inventor does not have the commitment of creating something with economical objectives; his motivation is the creation itself, the discovery,

With respect to innovation profile, it is known of a strong consensus on understanding its concept as "something new". Nevertheless, there is great disagreement on what can be considered as "new". Since "newness" is a situational quality, it can be presumed that innovation is situational, if something is new for environmental data, it can be considered as innovation. One of the problems in managing innovation comes from the variety of understandings that researchers have on this term, frequently confusing it with the concept of invention. For Plonski (2005), this confusion happens for three reasons: reductionism (to only consider innovation as a technological matter), enchantment (to consider technological innovation spectacular) and un-characterization (to ease the requirement of technological

Throughout history, more specifically in the XVIIIth century, Adam Smith relates the accumulation of capital with manufacturing technology; studying the concepts related to technological change, to division of work and, to growth of production and competitiveness. In the XIXth century, List was considered a pioneer to introduce the concept of intangible investment. For him, the condition of a country is the result of the set of all the discoveries, inventions, improvements, up-grades and efforts of all the generations that had lived before us: this forms the intellectual capital of the human race. Marx and Schumpeter analyzed the concept of technology under the perspective of economic development. For Schumpeter (1934), it is necessary to develop ways to combine material and knowledge in order to promote economic development; consequently, it is necessary to introduce new combinations, which are known as innovative processes. At the beginning of the XXth century, there still was no research that distinguished the characteristics of an entrepreneur from the ones of a manager. To differentiate the characteristics of the ones who did not invent from the ones who used new technologies for the creation and the development of new products, to reach economic vitality, it was established the notion of the entrepreneur

The function of the entrepreneur is to remodel or to revolutionize the production standard exploring an invention or, in a more general way, a non experimented method, to produce a new good or for the commercialization of products, in a new sector (Schumpeter 1934).

For Schumpeter, the proper advantage of new opportunities is associated to innovation. For Drucker (1985), innovation is an act that contemplates the resources with a new capacity to create wealth. "Entrepreneur is an agent of change; it makes new and different things. It can

Schumpeter, Hoselitz, Cole, Gartner e Dollinger appraise the practice of entrepreneurship as an act of creation of an economic and innovative organization with the intention to get profitability or growth under risk conditions and uncertainty. However, there are some

only be called an entrepreneur if it contributes to something new." (Filion, 1992).

**4. Innovation profile and its relation with entrepreneurship**

and nothing else (Dornelas, 2003).

change in an innovation).

as innovative (Hisrich & Peters, 2001).

entrepreneurs who open similar business, whether with the same product or processes, or either in the same region.

Consequently, it can be considered that there is the individual who is, in fact, either an agent of change, as suggested by (Filion, 1992), or there is this other individual who does not opt for change, but more for copying what is already available in the market, without producing something new for its community. Both types can be considered equally as an entrepreneur, considering that both have some of the characteristics of the entrepreneur.

According to Schumpeter (1934), it is proposed three basic phases to define the process of innovation: (i) invention, as a result of a discovery process, new technical principles, potentially opened for commercial exploration but not necessarily carried through; (ii) innovation, as a process of development of an invention for commercial purpose and; (iii) diffusion, as the expansion of an innovation of commercial use, new products and processes.

Pinchot (1985) also indicates the distinction between innovation and invention. Invention consists in the creation of a new concept; but innovation not only demands invention, but the transformation of the invention into a commercial success.

For Schumpeter (1934), inventions are economically irrelevant; considering that innovations are conversions of suitable inventions into consumer's habits and contribute, therefore, to economic development.

The difference between the entrepreneur and the inventor is that the entrepreneur uses his creativity combined with his management abilities and his knowledge of the businesses to identify opportunities to innovate. The inventor does not have any commitment to create something with economic results; his motivation is the creation, the discovery and nothing more (Dornelas, 2003, p. 18).

It is obvious that in joining the attributes of entrepreneurship and innovation to one individual constitutes the best combination for economic growth, because it creates an ideal mix which results in the opening of new enterprises focused on innovation, which creates exclusive and new market demands. Innovation constitutes one constant challenge for the organizations, considering the inherent risks and the advantages that it can generate. The risks are the consequences of the consumption of resources without getting returns, or even worse, not to spend and not to be prepared duly for the future challenges (Dorion et al., 2008).

In this sense, Paiva Jr. & Cordeiro (2002) defines the entrepreneur as being a person who initiates a business or a person who operates and develops it. For them, the entrepreneur is the person who destroys the economic order already existing thru the introduction, in the market, of new products/services, with the creation of new forms of management or thru the exploration of new resources, materials and technologies.

When there is a surplus of information in a specific process, imitation becomes a convenient heuristic resource. Considering the epistemological sense of the concept of imitation, imitation itself does not consist in a worthless resource; to the contrary, it represents the fundaments of learning and language, contributing to social cohesion and is the natural mechanism for both inspiration and aspiration. It can also be considered a rational economic option (Bonabeau, 2004).

Brazilian Entrepreneurship Reality: A Trilogy of Imitation, Invention and Innovation 89

and outside the company; and (vii) he understands that as part of his work to convince other

The innovation profile of an enterprise shows that up to 30% of its billing comes from products or services launched less than five years. The result of a stimuli for innovation can be seen as a learning aspect (the produced knowledge is stored and shared with the other areas of the enterprise); as content (a new good, service or product); as value (financial and economic profits thru innovation); as behaviour (incorporation of capacities that changes the forms to act and to think of the people); and as entrepreneurial spirit (incentive for innovation projects without raising a concern for immediate success) (Simantob & Lippi,

Thus, it cannot automatically be attributed to the entrepreneur the practice of innovation, since many entrepreneurs launch their business in the market with some products already in use or, a lot of times, with some ideas identical to unedited management models, as a practice of entrepreneurship and wealth creation. The habit of copying success models is a common practice in Brazilian companies, considering the data on the initial amount of royalties and licenses of US\$ 200 million paid in 1992, passed to US\$ 3,5 billion in 2001 (Simantob & Lippi, 2003). Drucker (1985), positioning himself as a partisan of the attribute of innovation to the entrepreneur, agrees with the importance of the imitation process of the entrepreneur, meaning that the entrepreneur can make or do something that somebody else has already made. However, the author considers that such imitation process is, in fact, innovative when applied to his development strategy because the entrepreneur understands

It is not possible to necessarily insert to entrepreneurship the practice of innovation, once many entrepreneurs come to the market with similar ideas, or many time these ideas are identical to the inedited model; this way, they do not only undertake action but they also

The habit of copying successful models is a practice in Brazilian companies. This fact can be demonstrated just facing the amount of royalties and licenses paid: US\$ 200 million in 1992

Drucker (2002), still considering innovation as an attribute to entrepreneurship, recognizes entrepreneur's imitation as a deliberate strategy. He believes that aggregating the entrepreneur with an innovative profile gives attributes to the same person and constitute the best combination for economical growth. It allies inherent disposition to start new enterprise thru innovations, creating openings in the consuming market fore new demands. Paiva Jr. & Cordeiro, 2002 defines the entrepreneur as a person who starts a business or a person who operates or develops it. To him still, the entrepreneur is a person who destroys the existing economic order for the insertion of new products or services in the market, to the creation of new management patterns, or to exploring new resources, substances, and

Imitation becomes a convenient heuristic resource when there is too much information to be processed. Imitation is not a despicable resource; for example, it is fundamental to learning

people to bare a new and good idea to be implemented (Simantob &Lippi, 2003)

better what the imitation represents and what can be aggregated from it.

**5. Imitations as an entrepreneurship action**

and US\$ 3.5 billion in 2001 (Simantob & Lippi, 2003).

create wealth, despite of not innovating.

technologies.

2003).

In a research carried through in one hundred of the 500 companies who demonstrated the most important growths in the United States, in 1989, it points out that 71% of the ideas of the entrepreneurs refer to current modifications from their previous work environment. On the other hand, only 4% of the entrepreneurs discover, through systematic research, opportunities (Bhide, 1994).

Then, innovation constitutes an effort to produce an intentional and focused change in the economic or social potential of the enterprise (Drucker, 1985). It consists in the creation and the lucrative use of new technologies, new products, new services, new systems and new forms of operation (Pinchot &Pellman, 2000). As mention Simantob & Lippi (2003), to innovate is to have an idea that its competitors do not have yet and to implant it successfully. Innovation is part of the strategy of the companies: its focus is the economic performance and the creation of value.

The Organization for Economic Co-operation and Development (OECD), in Becker & Cunha (2006), differentiates technological innovation from innovative activity. The first one refers to new products and processes launched in the market or existing product or process significant improvements. The second one consists in organizational policies and practices directed (i) to research activities and development (it refers to creative and systematic activities which aims at increasing knowledge supply); (ii) to industrial engineering (with the objective of acquiring or modifying equipment, tools, quality control, methods and standards, and produce new products or to adopt new process); (iii) to production (modifications of product and process); (iv) to marketing of new products (launching of these products in the market, its adaptation and commercialization); (v) to acquisition of intangible technology (register of patents, licenses, know-how and services of technological content and also the acquisition of equipment and machines of technological content introduced thru the innovations of the company); and (vi) design activities (definition of procedures, operational and technical specifications and production of new product or adoption of new processes, and the activities of design related to new product or process).

Simantob and Lippi (2003) mention that technological innovation consists in the development or in the improvement of a process or a service that already exists. It differs from the concept of invention, which refers to the creation of inexistent intellectual capital that may not have still any economic consequence. According to Moreira & Queiroz (2007), "in more recent studies, technological innovation is defined by the introduction in the market of a product (good or service) technologically new or substantially improved or by the introduction in a company of a productive process technologically improved or new". Technological innovation may result from new technological developments, new combinations of existing technologies or the proper use of knowledge acquired in a company.

In respect to the innovation profile of a manager, authors mention that this professional is associated with the following characteristics: (i) he attracts, stimulates and give autonomy to the decision process of the team; (ii) he has sense of urgency to resolve problems with high degree of uncertainty; (iii) he has tolerance to risk, but he always measures the return on investment; (iv) he knows how to take risk with responsibility and persistence; (v) he creates an experimentation culture; (vi) he enhances commitment with any learning process, inside

In a research carried through in one hundred of the 500 companies who demonstrated the most important growths in the United States, in 1989, it points out that 71% of the ideas of the entrepreneurs refer to current modifications from their previous work environment. On the other hand, only 4% of the entrepreneurs discover, through systematic research,

Then, innovation constitutes an effort to produce an intentional and focused change in the economic or social potential of the enterprise (Drucker, 1985). It consists in the creation and the lucrative use of new technologies, new products, new services, new systems and new forms of operation (Pinchot &Pellman, 2000). As mention Simantob & Lippi (2003), to innovate is to have an idea that its competitors do not have yet and to implant it successfully. Innovation is part of the strategy of the companies: its focus is the economic

The Organization for Economic Co-operation and Development (OECD), in Becker & Cunha (2006), differentiates technological innovation from innovative activity. The first one refers to new products and processes launched in the market or existing product or process significant improvements. The second one consists in organizational policies and practices directed (i) to research activities and development (it refers to creative and systematic activities which aims at increasing knowledge supply); (ii) to industrial engineering (with the objective of acquiring or modifying equipment, tools, quality control, methods and standards, and produce new products or to adopt new process); (iii) to production (modifications of product and process); (iv) to marketing of new products (launching of these products in the market, its adaptation and commercialization); (v) to acquisition of intangible technology (register of patents, licenses, know-how and services of technological content and also the acquisition of equipment and machines of technological content introduced thru the innovations of the company); and (vi) design activities (definition of procedures, operational and technical specifications and production of new product or adoption of new processes, and the activities of design related to new product or process).

Simantob and Lippi (2003) mention that technological innovation consists in the development or in the improvement of a process or a service that already exists. It differs from the concept of invention, which refers to the creation of inexistent intellectual capital that may not have still any economic consequence. According to Moreira & Queiroz (2007), "in more recent studies, technological innovation is defined by the introduction in the market of a product (good or service) technologically new or substantially improved or by the introduction in a company of a productive process technologically improved or new". Technological innovation may result from new technological developments, new combinations of existing technologies or the proper use of knowledge acquired in a

In respect to the innovation profile of a manager, authors mention that this professional is associated with the following characteristics: (i) he attracts, stimulates and give autonomy to the decision process of the team; (ii) he has sense of urgency to resolve problems with high degree of uncertainty; (iii) he has tolerance to risk, but he always measures the return on investment; (iv) he knows how to take risk with responsibility and persistence; (v) he creates an experimentation culture; (vi) he enhances commitment with any learning process, inside

opportunities (Bhide, 1994).

company.

performance and the creation of value.

and outside the company; and (vii) he understands that as part of his work to convince other people to bare a new and good idea to be implemented (Simantob &Lippi, 2003)

The innovation profile of an enterprise shows that up to 30% of its billing comes from products or services launched less than five years. The result of a stimuli for innovation can be seen as a learning aspect (the produced knowledge is stored and shared with the other areas of the enterprise); as content (a new good, service or product); as value (financial and economic profits thru innovation); as behaviour (incorporation of capacities that changes the forms to act and to think of the people); and as entrepreneurial spirit (incentive for innovation projects without raising a concern for immediate success) (Simantob & Lippi, 2003).

Thus, it cannot automatically be attributed to the entrepreneur the practice of innovation, since many entrepreneurs launch their business in the market with some products already in use or, a lot of times, with some ideas identical to unedited management models, as a practice of entrepreneurship and wealth creation. The habit of copying success models is a common practice in Brazilian companies, considering the data on the initial amount of royalties and licenses of US\$ 200 million paid in 1992, passed to US\$ 3,5 billion in 2001 (Simantob & Lippi, 2003). Drucker (1985), positioning himself as a partisan of the attribute of innovation to the entrepreneur, agrees with the importance of the imitation process of the entrepreneur, meaning that the entrepreneur can make or do something that somebody else has already made. However, the author considers that such imitation process is, in fact, innovative when applied to his development strategy because the entrepreneur understands better what the imitation represents and what can be aggregated from it.

#### **5. Imitations as an entrepreneurship action**

It is not possible to necessarily insert to entrepreneurship the practice of innovation, once many entrepreneurs come to the market with similar ideas, or many time these ideas are identical to the inedited model; this way, they do not only undertake action but they also create wealth, despite of not innovating.

The habit of copying successful models is a practice in Brazilian companies. This fact can be demonstrated just facing the amount of royalties and licenses paid: US\$ 200 million in 1992 and US\$ 3.5 billion in 2001 (Simantob & Lippi, 2003).

Drucker (2002), still considering innovation as an attribute to entrepreneurship, recognizes entrepreneur's imitation as a deliberate strategy. He believes that aggregating the entrepreneur with an innovative profile gives attributes to the same person and constitute the best combination for economical growth. It allies inherent disposition to start new enterprise thru innovations, creating openings in the consuming market fore new demands. Paiva Jr. & Cordeiro, 2002 defines the entrepreneur as a person who starts a business or a person who operates or develops it. To him still, the entrepreneur is a person who destroys the existing economic order for the insertion of new products or services in the market, to the creation of new management patterns, or to exploring new resources, substances, and technologies.

Imitation becomes a convenient heuristic resource when there is too much information to be processed. Imitation is not a despicable resource; for example, it is fundamental to learning

Brazilian Entrepreneurship Reality: A Trilogy of Imitation, Invention and Innovation 91

There are some indexes on the importance of technological innovation on economical

a. Technological innovation has been responsible for about 70% of economical growth,

b. Private taxes of return on investments in R&D are around 20% and 30%, while social

On the other hand, investments are slow in Brazil. In 1994, Brazil invested 0.7% of its GNP in science and technology; from this sum, 75% are still supported by the government

growth and business competitiveness (IBGE, 2003):

and perhaps for 80% to 90% of productiveness gain;

a. The belief that there always is a correct answer to a certain problem; b. The fallacy that the resolution for any problem must be logical;

d. Breaking up rules, beliefs or paradigms is innovation in many cases;

g. Think of solutions only on the activities of a certain sector of the company;

i. To be a person who believes to be without any talent or creative intelligence.

To Simantob & Lippi (2003), inhibitor factors for innovation are critics and punishment. Thus, there is a block for the capacity to dare, to risk. The innovator, as well as the entrepreneur, needs to be tolerant with unsuccessful ideas. The companies themselves define their innovative profile. They can see 30% of their income comes from products or

A Mintzberg & Quinn (1992) state that in innovative configuration is the environment what precedes? An innovative environment, according to Simantob & Lippi (2003), is composed of qualified and continuously trained people, clear and transparent communication, without any filter, a good environment for exchanging information, for daring, and for collective recognition. In Table 3 below, it is possible to analyze the nine dimensions of innovative

Once there are these necessary characteristics so that companies may have an innovative environment, in Brazil it seems that challenges are even greater. A research carried out by IBGE/CEMPRE (SEBRAE, 2006), surveyed that the number of micro companies in the country, between 1996 and 2002, has increased from 2,956,749 to 4,605,607. The accumulated growth of 55.8% passed to a participation in the total number of companies from 93.2%, in 1996, to 93.6%, in 2002. The total number of people occupied in micro companies has gone from 6,878,964 to 9,967,201. With a growth of 44.9% in this period, it increased its participation in total occupation in companies from 31.8% to 36.2%. The number of companies with activities for the same period has increased from 181,115 to 274,009, a growth of 51.3%. The total of people increased from 4,054,635 to 5,789,875, with a growth of 42.8%, showing an evolution from 18.8% to 21.0%. According to this research, micro and small companies corresponded, in 2002, for 99.2% of the total number of formal companies, 57.2% of total jobs, and 26.0% of salary mass. Because of the expressive increase of the

taxes of these same investments are over 50%.

What blocks creativity, according to Filion (2001), is:

e. Observing only one perspective for the problem;

environment proposed by Simantob & Lippi (2003):

f. Not seeing a connection between mistake and innovation;

services launched less than five years ago (Simantob & Lippi, 2003).

h. Non-conventional thought criticized by the colleagues;

c. The practical sense limits creativity;

(Guedes & Bermúdez, 2006).

processes, it promotes social cohesion, and it is a natural mechanism to breath in and breath out. Besides, it may also be a rational economical option (Bonabeau, 2004).

In a research held in 100 of 500 companies that a major growth in the United States in 1989, it was pointed that 71% of entrepreneur's ideas were modifications of ideas identified in their former working environment, and only 4% of theses managers discovered new opportunities through a systematic research (Bhide, 1994).

Innovation is an effort to produce an intentional change, focused in the economical or social potential of entrepreneurship (DRUCKER, 1985). Innovation consists in creating and profitably using new technologies, new products, new services, new systems, and new operation forms (Pinchot & Pellman, 2000). It does constitute a central matter for businesses expecting to become more competitive, desiring to develop new knowledge based management strategies about cooperation/alliance for technology products (Dorion et al., 2008).

The Organization for Economic Co-operation and Development (OECD) (Becker & Cunha, 2006) makes a difference between technological innovation and innovative activity. The first means new products and processes inserted in the market or a significant improvement in these same products or processes. The second refers to policies and organizational practices focused on research actions and development (they refer to creative and systematic work that aims to increase the knowledge stock); industrial engineering (acquiring or changing equipment, tools, quality control, methods and patterns, with the objective of manufacturing a new product or adopting a new process); production (changes in product and process); marketing of new products (launching these products into the market, their adaptation and commercialization); acquisition of intangible technology (patent office, licenses, know-how, and services of technological content, as well as acquiring equipment and machines of technological characteristic related to innovations started by the company); and drawing activities (definition of proceedings, technical and operational specifications, for the production of a new product or for the adoption of a new process, and artistic drawing activities related to the new product or process.

According to Moreira & Queiroz (2007), the most recent studies define technological innovation as introducing in the market a product (a good or a service) technologically new or substantially improved, or as introducing in the company a productive process technologically improved or new. Technological innovation may result from new technological development, from new combinations of the existing technology, or from the use of other knowledge acquired by the company.

#### **6. Do Brazilian entrepreneurs imitate or innovate?**

Historical factors of the Brazilian industrialization process have contributed to the dominant perception among national companies and businessmen of treating technology as something finished and ready to be applied. This "alienation" ended up in developing a feeling of suspicion related to technological development that has prejudiced the companies and excluded them from world tendency of taking part in international networks of strategic alliances. The protectionist character of the Brazilian industrialization model in substituting importations has de-motivated national sectors that would be beneficiated in being part of technological competition with potential international opponents, once they had a domestic market of great proportions.

There are some indexes on the importance of technological innovation on economical growth and business competitiveness (IBGE, 2003):

On the other hand, investments are slow in Brazil. In 1994, Brazil invested 0.7% of its GNP in science and technology; from this sum, 75% are still supported by the government (Guedes & Bermúdez, 2006).

What blocks creativity, according to Filion (2001), is:

90 Entrepreneurship – Creativity and Innovative Business Models

processes, it promotes social cohesion, and it is a natural mechanism to breath in and breath

In a research held in 100 of 500 companies that a major growth in the United States in 1989, it was pointed that 71% of entrepreneur's ideas were modifications of ideas identified in their former working environment, and only 4% of theses managers discovered new

Innovation is an effort to produce an intentional change, focused in the economical or social potential of entrepreneurship (DRUCKER, 1985). Innovation consists in creating and profitably using new technologies, new products, new services, new systems, and new operation forms (Pinchot & Pellman, 2000). It does constitute a central matter for businesses expecting to become more competitive, desiring to develop new knowledge based management strategies

The Organization for Economic Co-operation and Development (OECD) (Becker & Cunha, 2006) makes a difference between technological innovation and innovative activity. The first means new products and processes inserted in the market or a significant improvement in these same products or processes. The second refers to policies and organizational practices focused on research actions and development (they refer to creative and systematic work that aims to increase the knowledge stock); industrial engineering (acquiring or changing equipment, tools, quality control, methods and patterns, with the objective of manufacturing a new product or adopting a new process); production (changes in product and process); marketing of new products (launching these products into the market, their adaptation and commercialization); acquisition of intangible technology (patent office, licenses, know-how, and services of technological content, as well as acquiring equipment and machines of technological characteristic related to innovations started by the company); and drawing activities (definition of proceedings, technical and operational specifications, for the production of a new product or for the adoption of a new process, and artistic drawing

According to Moreira & Queiroz (2007), the most recent studies define technological innovation as introducing in the market a product (a good or a service) technologically new or substantially improved, or as introducing in the company a productive process technologically improved or new. Technological innovation may result from new technological development, from new combinations of the existing technology, or from the

Historical factors of the Brazilian industrialization process have contributed to the dominant perception among national companies and businessmen of treating technology as something finished and ready to be applied. This "alienation" ended up in developing a feeling of suspicion related to technological development that has prejudiced the companies and excluded them from world tendency of taking part in international networks of strategic alliances. The protectionist character of the Brazilian industrialization model in substituting importations has de-motivated national sectors that would be beneficiated in being part of technological competition with potential international opponents, once they had a domestic

out. Besides, it may also be a rational economical option (Bonabeau, 2004).

about cooperation/alliance for technology products (Dorion et al., 2008).

opportunities through a systematic research (Bhide, 1994).

activities related to the new product or process.

use of other knowledge acquired by the company.

market of great proportions.

**6. Do Brazilian entrepreneurs imitate or innovate?**

To Simantob & Lippi (2003), inhibitor factors for innovation are critics and punishment. Thus, there is a block for the capacity to dare, to risk. The innovator, as well as the entrepreneur, needs to be tolerant with unsuccessful ideas. The companies themselves define their innovative profile. They can see 30% of their income comes from products or services launched less than five years ago (Simantob & Lippi, 2003).

A Mintzberg & Quinn (1992) state that in innovative configuration is the environment what precedes? An innovative environment, according to Simantob & Lippi (2003), is composed of qualified and continuously trained people, clear and transparent communication, without any filter, a good environment for exchanging information, for daring, and for collective recognition. In Table 3 below, it is possible to analyze the nine dimensions of innovative environment proposed by Simantob & Lippi (2003):

Once there are these necessary characteristics so that companies may have an innovative environment, in Brazil it seems that challenges are even greater. A research carried out by IBGE/CEMPRE (SEBRAE, 2006), surveyed that the number of micro companies in the country, between 1996 and 2002, has increased from 2,956,749 to 4,605,607. The accumulated growth of 55.8% passed to a participation in the total number of companies from 93.2%, in 1996, to 93.6%, in 2002. The total number of people occupied in micro companies has gone from 6,878,964 to 9,967,201. With a growth of 44.9% in this period, it increased its participation in total occupation in companies from 31.8% to 36.2%. The number of companies with activities for the same period has increased from 181,115 to 274,009, a growth of 51.3%. The total of people increased from 4,054,635 to 5,789,875, with a growth of 42.8%, showing an evolution from 18.8% to 21.0%. According to this research, micro and small companies corresponded, in 2002, for 99.2% of the total number of formal companies, 57.2% of total jobs, and 26.0% of salary mass. Because of the expressive increase of the

Brazilian Entrepreneurship Reality: A Trilogy of Imitation, Invention and Innovation 93

around 3% of their GNP in science and technology, Brazil invests around 1%. According to a research realized by *Human Development Report* (UNDP), that established the index of technological development, Brazil, in 2001, occupied the 41st place in the ranking that was headed by Finland, the United States and Sweden. While Brazil has patented 125 technological innovations in 2003, the United States registered 98,663 (Simantob & Lippi,

Competitive strategy Number of companies Participation (%)

1,199

15,311

55,495

Source: Institute of Economical Applied Research (Arbix et al., 2005) Table 4. Competitive strategy and innovations in companies

only 177 companies made some worldwide innovation in 2003.

time, divided in classes of number of people occupied by them.

Total 31.5 33.3 From 10 to 29 25.3 30.4 From 30 to 49 33.3 34.2 From 50 to 99 43.0 34.9 From 100 to 249 49.3 43.8 From 250 to 499 56.8 48.0 From 500 on 75.7 72.5

Table 5. Indexes of innovation in companies 1998-2000 and 2001-2003

relate the entrepreneur to a creative and innovative person.

Total 72,005 100 100

According to IBGE (2003), 50% of investment in innovations refers to the acquisition of machines and equipment; only 20% are destined to research and development. In Brazil,

In Table 5 below, it is possible to observe the index of Brazilian innovations throughout

The smaller the company is, the smaller is the index of innovativeness of this same company. It proves once again that Brazilian entrepreneurs do not have an innovative profile, in disagreement with the concept of entrepreneur of most authors mentioned that

In a research carried out by FAPESP agency, despite of the number of innovative companies in Brazil increased from 22,698, in 2000, to 28,036, in 2003, this increase has not reflected in

Innovation index 1998-2000 (%)

Profit Employment

Innovation index 2001-2003 (%)

1,7% 25.9 13.2

21.3% 62.6 48.7

77.1% 11.5 38.2

2003).

difference

products

Innovation and product

Specialization in pattern

Non differentiation for product and smaller productiveness

People occupied with

Source: IBGE, PINTEC (2003).

innovations

number of jobs generated in in both segments, salary mass presented a real improvement of 57.3% in micro companies and of 37.9% in small companies. Data from this research demonstrates that there are in Brazil a great number of entrepreneurs and they have a major participation in the economical activity of the country.

Source: Simantob & Lippi (2003)

Table 3. Nine dimensions to innovative environment

Another research, carried out by the Institute of Economical Applied Research (Ipead), presents, in Table 4 below, that 1.7% of Brazilian industrial companies innovate. Furthermore, the results demonstrate that an innovative company has 16% more chances to be an exporter than the other ones and represents 25.9% of the whole Brazilian industrial income, occupy 13.2% of all jobs generated in the activity, and pay salaries that are 23% higher that the other ones.

The effort of these companies to innovate corresponds to 3.06% of expenses with internal R&D; however, as they represent a minority among Brazilian companies, the total spending by industries with R&D falls to 0.7%, while the average of other countries like Germany and France corresponds to 2.7% and 2.5%, respectively (Arbix et al., 2005).

It is possible to observe from data presented in both Sebrae and Ipead research that although there are a great number of micro and small companies, there also is a practically insignificant percentage of companies which formally innovate in Brazil. It proves these new companies are merely imitator's entities of already existing businesses.

Other researches indicate a correlation between expenses with innovation and R&D and wealth. While England, the United States, Japan, South Korea, France, and Germany invest around 3% of their GNP in science and technology, Brazil invests around 1%. According to a research realized by *Human Development Report* (UNDP), that established the index of technological development, Brazil, in 2001, occupied the 41st place in the ranking that was headed by Finland, the United States and Sweden. While Brazil has patented 125 technological innovations in 2003, the United States registered 98,663 (Simantob & Lippi, 2003).

Source: Institute of Economical Applied Research (Arbix et al., 2005)

Table 4. Competitive strategy and innovations in companies

According to IBGE (2003), 50% of investment in innovations refers to the acquisition of machines and equipment; only 20% are destined to research and development. In Brazil, only 177 companies made some worldwide innovation in 2003.

In Table 5 below, it is possible to observe the index of Brazilian innovations throughout time, divided in classes of number of people occupied by them.

Source: IBGE, PINTEC (2003).

92 Entrepreneurship – Creativity and Innovative Business Models

number of jobs generated in in both segments, salary mass presented a real improvement of 57.3% in micro companies and of 37.9% in small companies. Data from this research demonstrates that there are in Brazil a great number of entrepreneurs and they have a major

consequence is a strong complicity to the activity. Freedom It conquers autonomy to execute and develop ideas and projects. Time to create There is a greater and greater demand for time in the agenda and physical environment proper to have ideas.

Conflict Sometimes, organizations stimulate good competition. As athletes of a

Debates They are basic ingredient to share ideas and knowledge, respecting

Tolerance to risk It expresses clear understanding in accepting mistakes as part of the

Another research, carried out by the Institute of Economical Applied Research (Ipead), presents, in Table 4 below, that 1.7% of Brazilian industrial companies innovate. Furthermore, the results demonstrate that an innovative company has 16% more chances to be an exporter than the other ones and represents 25.9% of the whole Brazilian industrial income, occupy 13.2% of all jobs generated in the activity, and pay salaries that are 23%

The effort of these companies to innovate corresponds to 3.06% of expenses with internal R&D; however, as they represent a minority among Brazilian companies, the total spending by industries with R&D falls to 0.7%, while the average of other countries like Germany and

It is possible to observe from data presented in both Sebrae and Ipead research that although there are a great number of micro and small companies, there also is a practically insignificant percentage of companies which formally innovate in Brazil. It proves these new

Other researches indicate a correlation between expenses with innovation and R&D and wealth. While England, the United States, Japan, South Korea, France, and Germany invest

France corresponds to 2.7% and 2.5%, respectively (Arbix et al., 2005).

companies are merely imitator's entities of already existing businesses.

Humor and joy They are more natural in informal environments and with few behavior

They come out when people make what let them happy. The natural

patronage from leaderships, either for investing in uncertain experiment

There is not so much one can do without resources, support or

same team, people compete among themselves to look for a better

They are perhaps the most important stimuli to assure the freedom of speech and the consciousness that punishment is something to be

participation in the economical activity of the country.

or to recognize a group merit.

result, but respecting team spirit.

opposed points of view.

rules.

avoided.

Source: Simantob & Lippi (2003)

higher that the other ones.

learning process.

Table 3. Nine dimensions to innovative environment

Challenge and involvement

Support to create

Trust and sincerity

Table 5. Indexes of innovation in companies 1998-2000 and 2001-2003

The smaller the company is, the smaller is the index of innovativeness of this same company. It proves once again that Brazilian entrepreneurs do not have an innovative profile, in disagreement with the concept of entrepreneur of most authors mentioned that relate the entrepreneur to a creative and innovative person.

In a research carried out by FAPESP agency, despite of the number of innovative companies in Brazil increased from 22,698, in 2000, to 28,036, in 2003, this increase has not reflected in

Brazilian Entrepreneurship Reality: A Trilogy of Imitation, Invention and Innovation 95

Evaluating the profile of the managers of the incubators, under the optics of the entrepreneurship and innovation, there are great similarities with the managers of the incubated companies, which must facilitate the tuning and the harmony in communication,

Intra-entrepreneurship constitutes a strong and important characteristic for the managers of incubators. However, by having only one citation referring to this characteristic, this does not mean that the managers do not have it, since, in the elapsing of the interviews, it was asked to the participants to cite entrepreneur's characteristics and knowing that the answers were open and represented the most noticeable and remembered characteristics from the

In respect to the evaluation of the incubated companies and its collaborators, the profile is, in its majority, of technicians, which are constituted of researchers of specific areas that develop studies on ideas for the construction of innovative solutions. The most present citations consisted in the expressions: "to look for new", "to search other alternatives", "to create new solutions for old problems". This indicates the direct link with characteristics related to innovation. This way, the incoming ones to the incubator have innovative characteristics, understanding that business incubators are disseminators of these practices,