What is innovation? innovation is the implementation of a new
or significantly improved product (good or service), or process, a
new marketing method, or a new organisational method in business
practices, workplace organisation or external relations. The main
driver for innovation is often the courage and energy to better the
world. An essential element for innovation is its application in a
commercially successful way. Innovation has changed human history
(consider the development of electricity, steam engines, motor
vehicles)
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What is innovation? Innovation involves the whole process from
opportunity identification, ideation or invention to development,
prototyping, production, marketing and sales, while
entrepreneurship only needs to involve commercialization. Today it
is also said to involve the capacity to adapt quickly by adopting
new innovations (products, processes, strategies, organization,
etc) Traditionally the focus has been on new products or processes,
but recently new business models have come into focus, i.e. the way
a firm delivers value and secures profits.
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Technological innovations are defined as new products and
processes and major technological modifications to products and
processes. An innovation is considered performed if it is
introduced to the market (product innovation) or implemented in the
production process (process innovation). Innovation includes many
research, technological, organizational, financial and commercial
activities. What is innovation?
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Non technological innovation Many innovations are of a
non-technological nature, for example in areas such as marketing,
organisation, management and design. They are not primarily driven
by a technological invention or improvement, and hence referred to
as non-technological innovations. Nevertheless, technology is used
as an enabler to support most of today's innovations, even when
technology is not the main focus or driver of the innovation.
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Product innovation Process innovation Marketing innovation
Organisational innovation Technological innovations Social
innovations Business Model innovation Types of innovation
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Product innovation involves the introduction of a new good or
service that is substantially improved. This might include
improvements in user friendliness, components and materials,
software in the product, functional characteristics, technical
abilities or any other dimension. product innovation
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Process innovation A new or significantly improved production
or delivery method. This includes significant changes in
techniques, equipment and/or software. Marketing innovation
development of new marketing methods with improvement in product
design or packaging, product promotion or pricing. Process &
marketing innovation
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Organisational innovation involves the creation of new
organizations, new organisational methods in business practices,
ways of running organizations or new organizational behavior,
workplace organisation or external relations. Technological
innovations based on specific technology, invention, discovery
Organisational & technological innovation
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Social & business model innovation Social innovations in
critical historic periods more important than technological ones
(mail, educational systm, social systm, health care,..) Business
Model innovation involves changing the way business is done in
terms of capturing value e.g. Compaq vs. Dell.
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Degree of novelty Incremental innovations Radical innovations
Systemic innovations
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innovation management innovation management encompasses an
integrated approach to managing all dimensions of innovation, from
innovation in products, services and business processes to
organisational and business models, through continuous monitoring,
development and improvement processes.
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Bench marking A management tool for comparing performance
against an organisation that is widely regarded as outstanding in
one or more areas, in order to improve performance.
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What is Creativity? there are three basic ingredients to
creativity: Domain skills - Domain skills are developed as one
becomes an expert in a field. To be a creative metallurgical
engineer, one must first master the fundamentals of the discipline.
Creative thinking skills - Creative thinking skills include seeking
novelty and diversity, being independent, being persistent, and
having high standards. Intrinsic motivation - Intrinsic motivation
implies that the reasons for doing things come from within, from
passion and pleasure, not as a result of external demands,
pressures, or rewards.
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Portrait of a Creative Person Creative people pay attention to
their world, see things differently, challenge assumptions, take
risks, are not afraid to fail and strive to generate multiple
solutions to problems. They are passionate about creativity and
seek opportunities to innovate.
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1. Open Your Mind - Have one new experience every day; no
matter how small. New experiences stimulate the brain and help you
make new and original connections; critical for boosting
breakthroughs. 2. Diversify - Involve others in your
problem-solving efforts who bring a different perspective or
cultural experience than yours. Six Tips To Help You Enhance Your
Creativity
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3. Mental Floss Relax; Stress, exhaustion, boredom and even
pain can block our pathways to creativity. 4. Stop Looking For the
Right Answer - Look for many right answers. 5. Discover Your
Creative Rhythm - Start paying attention to when you get your best
ideas. 6. Health Makes Wealth - Regular exercise not only benefits
your body, it boosts brain performance as well.
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and another one: Find what you love to do We know that people
do their most creative work when they love doing what theyre doing.
Theres no substitute for intrinsic motivation, that is, motivation
that comes from within. Although such motivation doesnt guarantee
creativity, dislike or lack of interest in work practically
guarantees non-creativity.
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Classical models of innovation Science Push approaches suggest
that innovation proceeds linearly: Scientific discovery invention
manufacturing marketing Demand Pull approaches argued that
innovation originates with unmet customer need: Customer
suggestions invention manufacturing
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Characteristics of successful innovating companies Systematic
collection of all impulses that could lead to innovation Creativity
of employees Ability to evaluate the possibility of the innovation
idea Good team work Project-based approach and ability to manage
projects
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Cooperation with external experts (universities, research
laboratories) Proper rate of risk-taking Employees motivation (the
employees are willing to improve the product and the operation of
the whole company) Continued education of employees Ability to
finance the innovation activities Characteristics of successful
innovating companies
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Characteristics of successful innovation process Research and
development (R&D) Production Marketing Innovation is an
opportunity for something new, different. It is always based on
change. Innovators do not view any change as a threat but as an
opportunity.
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Three conditions for innovations Innovation means work, hard,
concentrated and thorough work. If these qualities are lacking then
there is no use for the big talent, cleverness or knowledge.
Successful innovations must build on your strong points. The
innovation must be important to the innovator. Innovation must
focus on a market, must be controlled by the market
(market-pull).
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Degree of novelty Diffusion New to the firm New to the market
New to the world Disruptive innovations
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Degree of novelty Diffusion is the way in which innovations
spread, through market or non-market channels, from their first
worldwide implementation to different consumers, countries,
regions, sectors, markets, and firms. Without diffusion, an
innovation will have no economic impact. The minimum entry for a
change in a firms products or functions to be considered as an
innovation is that it must be new (or significantly improved) to
the firm.
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Degree of novelty New to the firm: A product, process,
marketing method, or organisational method might already have been
implemented by other firms, but if it is new to the firm (or in
case of products and processes: significantly improved), then it is
an innovation for that firm.
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Degree of novelty New to the market: the firm is the first to
introduce the innovation onto its market. The market is defined as
the firm and its competitors. The geographical scope is subject to
the firms own view of its operating market and thus can include
both domestic and international firms.
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Degree of novelty New to the world: the firm is the first to
introduce the innovation for all markets and industries, domestic
and international. implies a qualitatively greater degree of
novelty than new to the market.
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Degree of novelty Disruptive innovations: an innovation that
has a significant impact on a market and on the economic activity
of firms in that market. focuses on the impact of innovations as
opposed to their novelty. These impacts can, for example, change
the structure of the market, create new markets, or render existing
products obsolete. However, it might not be apparent whether an
innovation is disruptive until long after the innovation has been
introduced.
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Innovation activities are all scientific, technological,
organisational, financial and commercial steps which actually, or
are intended to, lead to the implementation of innovations. Some
innovation activities are themselves innovative, others are not
novel activities but are necessary for the implementation of
innovations. Innovation activities also include R&D that is not
directly related to the development of a specific innovation.
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Classifying firms by degree of innovativeness The innovative
firm is one that has introduced an innovation during the period
under review. The innovations need not have been a commercial
success many innovations fail. An innovation active firm is one
that has had innovation activities during the period under review,
including those with ongoing and abandoned activities. In other
words, firms that have had innovation activities during the period
under review, regardless of whether the activity resulted in the
implementation of an innovation, are innovation active.
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A potentially innovative firm is one type of innovation active
firm, that has made innovation efforts but not achieved results.
This is a key element in innovation policies: to help them overcome
the obstacles that prevent them from being innovative (converting
efforts into innovations) Annex for developing countries.
Classifying firms by degree of innovativeness
