Innovation is one of the cornerstones of business life and it plays a vital role in the modern economy. Innovation may be defined as the imaginative, constructive or creative application of knowledge, skills or inventing new methods and products for particular purposes. Innovation can also be defined as an original product or process, developed with minimal changes from existing resources. It can also be called a breakthrough. Innovation can be defined as a process whereby technology is diffused and made available to a wider market, stimulating production and consumption.
The basic definition of innovation is “the creation of something new either by the addition of something original to an already existing thing or by the development of something new that has not been previously available”. The most important feature of innovation therefore, is its uniqueness; something that cannot be imitated by anyone else. Innovation can thus be defined as the process through which companies create new ideas to compete with their counterparts and to differentiate their products or services from those of their competitors. Standards on innovation management suggest that in order to create new ideas, senior management must:
Innovation is therefore about capturing new value added value. A company needs to identify its customer, identify the market opportunity, and then develop processes to facilitate the capture and transformation of that market opportunity. The primary objective of innovation should be to create new value by applying new knowledge in a different manner. Innovation is therefore an ongoing activity, in which research and analysis to determine the client’s requirements, the likely benefits resulting from those requirements and the means of exploiting those benefits economically.
Innovation therefore is a never-ending process. The ability to stay ahead of competition becomes crucial. It is therefore essential to be flexible and open to innovative ideas and innovation. In order to capture the competitive advantage, innovation must be continuous and expansive, focusing on processes that make the business operate more efficiently. Companies therefore have to focus on new market developments and be prepared to re-invent themselves time and again.
Companies that fail to define innovation clearly and effectively can end up being left behind by their competitors. Many think that the definition of innovation is very easy to follow; however it is not. Companies that fail to implement an innovative strategy often end up behind instead of where they should be. Moreover, those that fail to change tend to remain stagnant or fall behind.
The bottom line is that innovation is a critical element for any company to strive on. A superior innovation capability will translate into superior competitiveness and ultimately, higher gross domestic product (GDP). The true innovation process therefore begins at the top, from developing a set of strategies, evaluating them rigorously, and then implementing and improving them through ongoing evaluation and research. Innovation therefore is necessary, whether or not senior management realizes it.