What Is Innovation?

Innovation is the process of creating something new. The last century has witnessed explosive innovation with dramatic results. Innovation makes our lives easier, enhances our productivity, improves our health, entertains us, and broadens our ability to communicate and connect on a global scale. Virtually every improvement in the quality of living in the past century can be traced back to innovation at some level.

Innovation is a broad, diverse, complex, unpredictable, and widely studied force in business. Hundreds of books, articles, and research papers have been written by scholars devoted to the study of innovation, its sources, objectives, trajectories, and lasting impact. Innovation serves as the catalyst for growth in business and economics..

Types of Innovation

We often think of innovation today in terms of technology. While it's true that technological innovations in the recent past have been groundbreaking, innovation can come in many forms. It can be a creative new teaching method to enhance student engagement. It can be a unique incentive program to reward high-performing employees. Or, it can be a process, such as lean methodology, a model which streamlines workflows and eliminates waste to keep costs low while maintaining quality.

Innovation can be incremental, such as a slight variation on an existing product formulation, like adding a new color or fragrance, or a groundbreaking product that revolutionizes an industry - think iPod. Innovation can respond to a clearly defined problem, or create a complete paradigm shift when the problem itself is undefined, or the path to a solution is unclear.

The benefits of innovation are not limited to new product development. The models of innovation are just about as numerous as the objectives they are intended to serve. Innovation can improve almost every aspect of a product or service life cycle, from business model innovation to pricing strategies, marketing, and service delivery. with its innovative distribution channels, making a huge array of products available nationwide virtually overnight.

Innovation doesn't always produce something entirely new. Sometimes innovation makes an existing product or service better. Small entrepreneurial businesses often develop new products that are components of products that larger, more established firms manufacture and sell under an established brand name. Improvements to everyday products, such as DVD players, digital cameras, and prescription drugs, are not unique to the companies that sell them. Cutting-edge component parts or pioneering research and development were provided by smaller firms with innovative ideas. Some small firms have built their entire business models around developing and producing products that help larger, well-known companies be more efficient or effective, and ultimately more competitive.

How Does Innovation Happen?

There are dozens of published theories of innovation. Perhaps the best known is the concept of creative destruction. Joseph Schumpeter was a renowned economist who first coined the term. He argued that innovative thinkers develop new products and technologies that, over time, make obsolete a product or process that had once dominated its market. The innovation often starts at the low end of the market; for example, with lower priced goods or components of higher-end products, and slowly works up to the higher end, taking market share from the big players as processes and products improve. Word processors made typewriters, and, often, their manufacturers, obsolete.

BY MWAKINYUKE
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