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How to Boost Innova,on Tomas Chamorro-­‐Premuzic David Winsborough Economic: Levels supply & demand Social: Major source of progress Organisa/onal: Fate of businesses Individual: well-­‐being & produc,vity What drives entrepreneurial ac,vity? It’s the people -­‐ and organisa,ons should do more to aJract, develop, and retain entrepreneurial talent talented, but unemployable Two issues 1.  How to boost innova,on 2.  How to select, manage and retain entrepreneurial talent (2 is the answer to 1) The produc/vity gap Our GDP growth lags NZ GDP has risen, but the rest of the world is rising faster The produc/vity gap -­‐ Hours worked And we work really hard for less . . . And we can’t rely on striking oil . . . Immigra,on From America to Asia •  Btw 1990-­‐2000: 646% increase of Indian engineers in Silicon Valley (decreasing since) •  Silicon Valley startups founded by immigrants: from 52% to 40% in last 10 years… Environmental factors Values Personal factors Abili,es Style Random Chance Unpredictable Error Economic and policy se`ngs Government Leadership NEW ZEALAND
GDP PER CAPITA
(NZD, 2009)
OECD
AVERAGE
WHERE NZ COULD BE
BASED ON BROAD POLICIES
WHY THE PRODUCTIVITY GAP?
AND HOW IT COULD CLOSE
UNDERINVESTMENT IN
WEAK INTERNATIONAL
CONNECTIONS
55%
GREATER PARTICIPATION
IN GLOBAL
VALUE CHAINS
KNOWLEDGE,
INNOVATION
AND IDEAS
40%
INNOVATIVE,
ADAPTABLE,
WELL-RUN FIRMS
OTHER
INCLUDING
LOW SKILLS
5%
MORE
HIGHLYSKILLED
WORKERS
TAKEN FROM “AN INTERNATIONAL PERSPECTIVE ON THE NEW ZEALAND PRODUCTIVITY
PARADOX”, NEW ZEALAND PRODUCTIVITY COMMISSION WORKING PAPER 2014/01
APRIL 2014
FULL REPORT AT WWW.PRODUCTIVITY.GOVT.NZ
NEW ZEALAND
GDP PER CAPITA
(NZD, 2009)
OECD
AVERAGE
WHERE NZ COULD BE
BASED ON BROAD POLICIES
Most of tWHY
he rest oTHE
f the PRODUCTIVITY GAP?
AND HOW IT COULD CLOSE
gap reflects UNDERINVESTMENT IN
underinvestment in OTHER
WEAK INTERNATIONAL
KNOWLEDGE,
“knowledge-­‐based INNOVATION
INCLUDING
CONNECTIONS
LOW SKILLS
AND IDEAS
capital” The quality of management in New Zealand is GREATER
low, which MORE
PARTICIPATION
INNOVATIVE,
HIGHLYlowers the pIN
roduc,vity ADAPTABLE,
GLOBAL
SKILLED
WELL-RUN FIRMS
gains from VALUE
new CHAINS
WORKERS
technology. 55%
40%
5%
TAKEN FROM “AN INTERNATIONAL PERSPECTIVE ON THE NEW ZEALAND PRODUCTIVITY
PARADOX”, NEW ZEALAND PRODUCTIVITY COMMISSION WORKING PAPER 2014/01
APRIL 2014
FULL REPORT AT WWW.PRODUCTIVITY.GOVT.NZ
Going down
nz china Gregarious and nice
Change oriented
Task focussed and
competitive
Energetic
Like to learn
Less driven to win big
usa More easily satisfied
Serious
Create soft, non-commercial
cultures
australia Laid back
Going up
south africa Bad leadership is a major cause of entrepreneurship Most startups created in other people’s businesses. Why? 1.  managers don’t value crea,vity 2.  employees hate their managers 3.  crea,ve employees start own business Unless lesson learned… Poor leadership Baseline is 70% Disengageme
nt Growth Increase in number of employees For the 10% that succeed Failure to value crea,vity Forces entrepreneurial talent out Start-­‐up Incubated in and funded by previous job No interest in working for others 40 % self-­‐employed An,dote to failed career / bad boss Work more but earn less Only 10% grow (3% substan,ally) Intrapreneurship maJers… A lot! •  80% of execu,ves believe it is important •  …and believe their companies may risk their entrepreneurial lead over foreign compe,tors •  Entrepreneurial organisa,ons are consistently more profitable But badly done… •  Only 13% of entrepreneurial ideas are externally focused •  Only 21% are company wide •  Only 18% of execu,ves are happy with company innova,ons In U.S., female entrepreneurs account for $4 trillion dollars (almost 50% of China’s GDP) Values and Drivers
100 90 HIGH INTEREST 80 70 private
60 MODERATE INTEREST 50 public
40 LOW INTEREST 30 Recogni/on Power Hedonism Altruis/c Affilia/on Tradi/on Security Commerce Aesthe/cs Science The Fix Lesson learned… Good leadership Entrepreneurial vision Valuing crea,vity Engagement Growth Retains entrepreneurial talent To the benefit of own business Compe,,ve advantage Innova/on Intrapreneurship No interest in star,ng own business Enhancing mo,va,on & crea,vity •  10% gene,c •  trait vs. state crea,vity •  Openness & coaching (reciprocal effects) •  Exper,se & Mo,va,on are key IQ is irrelevant EQ is important EQ is important Strong rela,onship between entrepreneurial talent EQ If people are matched on EQ levels, their meta scores s,ll predict entrepreneurial success Entrepreneurs are more confident, emo,onally stable, and socially skilled, but their success is not due to any of these traits DNA of entrepreneurial talent Crea,vity, Opportunism, Proac,vity, Vision Crea/vity Genera,ng ideas Opportunism Vision Meaningful mission Iden,fying gaps Proac/vity Ac,ng with drive Can we train entrepreneurial talent? Boos,ng entrepreneurship 1)  Boost innova/on: brainstorm, insight training, crea,ve freedom 2)  Tolerate failure: encourage doing, avoid overthinking (not taking risks is risky) 3)  Promote an opportunis/c mindset: search, be ready to act when the opportunity comes 4)  Look for vision: beJer planning, strategic thinking, long-­‐term goals Building entrepreneurial teams Different meta strengths… the incubator (crea,vity) the networker (opportunism) the executor (proac,vity) the strategist (vision) What is the entrepreneurial organiza/on? The entrepreneurial organiza,on can be defined as: “An organisa+on that places innova+on and opportunism at its heart in order to produce economic or social value.” It is not an organiza,on full of entrepreneurs; it is an organiza,on whose culture and ways of working have a number of specific, measurable, characteris,cs SENIOR LEADERSHIP LINE ENGAGEMENT REWARD LEADERSHIP CREATIVITY OPPORTUNISM PROACTIVITY VISION DECISION MAKING TEAMWORK CULTURE KNOWLEDGE Entrepreneurial culture is rare •  87% of employees believe managers don't tolerate failure •  77% of ideas are not rewarded without results •  57% of those who quit (the job) say their ideas were not supported Building entrepreneurial teams 1)  Similar values 2)  Complementary styles 3)  Different meta strengths… the incubator (crea,vity) the networker (opportunism) the executor (proac,vity) the strategist (vision) Conclusion •  Effec,ve organisa,ons innovate by hiring, mo,va,ng, and retaining entrepreneurial talent •  Public sector needs as much innova,on as private sector •  They also need to create the rules that enable business and social enterprise