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Lecture notes by Peter F. Drucker for a business economics course, Entrepreneurship in Business Enterprise, regarding innovative organizations. Drucker argues that there is no shortage of innovative organizations, and how innovative organizations are not confined to business, stressing how an organization's ability to innovate is a function of management rather than industry. Defining innovation as the creation of new wealth rather than new knowledge, Drucker proceeds to identify the characteristics of an organization that enable it to innovate, these being organized leadership, top management's role in converting abstract ideas into concrete innovative reality, and creating an atmosphere of learning. Ultimately, Drucker finds that those organizations that share a common quest to overcome resistance to change and make their organizations more flexible are the ones that innovate successfully, and concludes that innovation in education institutions will be the most important change into the future.