Innovation 101: What is Innovation?

Creativity is the ability to bring something new. It is the ability not the activity of bringing something new. People are born creative but we train them out of it. Invention is a unique or novel device, method, composition, process or discovery. It may also be an improvement upon, or alternate means, of achieving an existing desired result or function. Invention is the activity of bringing something new. Innovation is the process of doing new things. The process of introducing the creative idea or invention to the market.

If creativity is the seed that inspires entrepreneurship, innovation is the process of entrepreneurship. Drucker “Innovation… is the means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth” It is important to recognize that innovation implies actions, not just conceiving new ideas. When people have passed through the illumination and verification stage of creativity, they may have become inventors, but they are not yet innovators.

It is only when technological development finds a market that the research and development effort is rewarded in economical-social terms.

Technological breakthroughs open new vistas for industrial development and economic growth. Scientific Knowledge focus on natural phenomena is neutral on the question of how this knowledge may be used. Historically Speaking, scientific knowledge and technology progressed slowly until very recently. Only when science and technology started to interact and enforce one another did the real explosion in knowledge and technology development. When we discuss science we mention scientific discoveries. But when we talk about technology, we mention technology innovation. Scientific discovery and basic research has no instantaneous commercial value and it is the role of universities and research centers. Inventions are the applied science by which scientific discoveries are shaped into physical structures and processes, may never be developed into marketable products. Innovation is the adoption of invention and the process by which invention is introduced to markets through the commercialization process. Then markets (buyers) may buy or ignore the innovation. By diffusing the innovation, the wealth creation process starts.

Technology is an Expression of human Creativity. Managing Technology involves continuous effort in creating Technology, developing novel products and services, and successfully marketing them. This requires great creativity along with a system designed to exploit them. It also requires an investment in Research and Development-R&D. R&D is a costly endeavor. It is a risky investment and therefore needs to be well managed. It is an investment in the future that cannot be neglected, nor can its value be underestimated.Technology creation and exploitation require a chain of events, starting with inventions and end at the market place.

Innovation has many forms, either process or product innovation. Process innovation means the implementation of a new or significantly improved production or delivery method (including significant changes in techniques, equipment and/or software). Product innovation is the creation and subsequent introduction of a good or service that is either new, or an improved version of previous goods or services. There are two ways that companies can innovate, incrementally or radically. This is a neat way of saying “a little bit at a time” or “in a completely crazy way.” Incremental innovation is not about huge sweeping changes. On the contrary, firms that innovate incrementally tend to do so just a little bit at a time. Think of incremental innovation as cost cutting or feature improvements in existing products or services. Radical innovation in on the opposite, it is about introducing something that do not exist. Radical innovation involves not fighting competition but circumventing it. Rather than fighting for market share a company steps aside and simply creates its own market, following the blue ocean strategy.

Innovation is associated with the creation of value or the satisfaction of a customer need. Creativity is the engine of innovation. The essence of creativity is combining two or more ideas to arrive at an entirely new one. For Example, Henry Ford assembly line was based on combining the production of standardized parts, as a concept that had been introduced a century earlier, with the idea of bringing the parts to the worker rather than moving the worker to the parts.