I received many emails after I wrote the post on innovation - “Innovation - a mantra to survive in business“. Thank you for your time and effort to write me and also asking me to share more on this.

Innovation has always perplexed people, at the same time, it is essential for progress and ultimately for economic growth. I have seen people who treats equally to the invention and innovation. Joseph Alois Schumpeter, an Austrian economist known for the theory of business cycle, attributed innovation to entrepreneurs. He was of the view that entrepreneurs innovate, not only the finding uses for inventions, but also by introducing new means of production, new products, new ways of providing services,and new forms of organizations.

Innovation, the term itself is derived from the latin “innovatus”, which means to “change” from the present way of doing things. And, that precisely is why there are challenges associated with innovation.

People define innovation in many ways, and each definition brings with it a new set of challenges. Innovation could be of three different types: radical innovation, obvious by its name, incremental innovation, which is an improvement on an already existing things and third one, general purpose innovation, which has mostly to do with infrastructural innovation centered around power, electricity, the Internet, etc.

General purpose innovations need more than the effort of a single organization, as their scope is wide and their adoption cycle long. But the potential for commercialization and success if very high for such innovations, since they have a wide range of use in a broad variety of products and processes. Moreover, they complement existing technologies and, thus face little resistance in adoption.

Incremental innovations are small improvements. These may originate as part of the learning curve effect. This improvement are continuous, and represent one of the few areas in innovation, where future improvements can be more or less accurately can be predicted. Even though they cause relatively little disruption, they are easily copied and their life cycle is very short.

Radical innovations - where a totally new technology replaces the existing technology. Because of their disruptive nature, these innovations take a long time to get into the market, and grow. They usually occur in large organizations, but are neglected as they go against their policy of serving customers needs and, therefore make their way into the hands of small start-ups that don’t such major risks. Such innovations thrive under these start-ups, and challenge the survival of the organization where they once originated, and become indispensable in the market.

Commercialization a radical innovation remains one of the biggest challenges because it involves market creation and not market protection as in the case of incremental innovation. Companies have to systematize the process of innovation and inculcate the culture of risk-taking.

If you enjoyed reading my posts, then please Click Here to Subscribe to my RSS feed.