What is Innovation? – Innovation may be defined as exploiting new ideas leading to the creation of a new product, process or service. It is not just the invention of a new idea that is important, but it is actually “bringing it to market”, putting into practice and exploiting it in a manner that leads to new products, services or systems that add value or improve quality. It possibly involves technological transformation and management restructuring. Innovation also means exploiting new technology and employing out-of-the-box thinking to generate new value and to bring about significant changes in society.
Experts have identified many types of innovation such as ‘Product Innovation’ that entails the introduction of a new product or a service that is new or considerably improved, ‘Process Innovation’ comprising the implementation of a new or a significantly enhanced production or delivery method, ‘Supply Chain Innovation’ in which innovations transform the sourcing of input products from the market and the delivery of output products to customers and ‘Marketing Innovation’ which results in the evolution of new methods of marketing with enhancements in product design or packaging, its promotion or pricing, among others.
Why Innovation is important?
Studies have confirmed that all businesses want to be more innovative. One survey identified that almost 90 per cent of businesses believe that innovation is a priority for them. The conclusion is that the importance of innovation is increasing, and increasing significantly. In the current day economic scenario, innovativeness has become a major factor in influencing strategic planning. It has been acknowledged that innovation leads to wealth creation. Even though efficiency is essential for business success, in the long run, it cannot sustain business growth.
Most often planned and measured combination of ideas, objects and people leads to innovation resulting in new business ideas and technological revolutions. In order to be termed valuable innovations, new products and services need to be strong enough to progress through rigorous commercialization processes and into the marketplace. Management expert Peter Drucker said that if an established organization, which in this age necessitating innovation, is not able to innovate, it faces decline and extinction. Many organizations are adopting measures to strengthen their ability to innovate. Such companies are creating a dependable operating system for innovation, an important indicator of corporate sustainability.
Research has indicated that competition combined with strong demand is a major driver of innovation. Intensity of competition is the determinant of innovation and productivity. Innovation, besides products and services, also includes new processes, new business systems and new methods of management, which have a significant impact on productivity and growth.
Today, we need innovators more than any time before. Every organization and business is feeling the impact of globalization, migration, technological and knowledge revolutions, and climate change issues. Innovation will bring added value and widen the employment base. Innovation is imperative if the quality of life in these trying circumstances is to improve. Innovation will make the world a better place for the younger generation.