Innovation

Innovation, in a business context, is generally thought of as the product or application of creativity. Peter F. Drucker suggests that innovation "is the specific instrument of entrepreneurship."

Mr. Drucker further suggests that there are seven sources of innovative opportunity. Four of these relate to a specific industry or service sector: the unexpected; the incongruous; process needs; and structural change. The other three relate to the human and economic environment: demographics; changes in perception, mood, and meaning; and new knowledge.

Let us observe some of these factors at work in a coffee shop venture. The unexpected factor in the recent success of gourmet coffee shops is the willingness of the consumer to spend two or three times the cost of a generic cup of coffee for exotic, flavored or brand-name coffee. An incongruity is the popularity of fat-free desserts ("healthy" indulgence) to go with that coffee. The structural change in the industry is the emergence of franchises. Environmental changes have also contributed to this phenomenon. As the "baby-boomer" generation has aged, the preferred place to meet has moved from the bar to the health club to the coffee shop.

Let us consider information about some current trends to see if we can relate them to potential opportunities in the context of Professor Drucker's categories. For each, see if you can possibly find a niche on which to build a business: