INNOVATION

What do you mean by Innovation ? What is need and importance? The term innovation derives from the Latin word innovatus, which is the noun form of innovare "to renew or change," stemming from in-"into" + novus-"new". It may refer to incremental and emergent or radical and revolutionary changes in thinking , products , processes , or organisations.

Innovative companies will typically be working on new innovations that will eventually replace older ones. Successive s-curves will come along to replace older ones and continue to drive growth upwards. In the figure above the first curve shows a current technology. The second shows an emerging technology that current yields lower growth but will eventually overtake current technology and lead to even greater levels of growth. The length of life will depend on many factors.

Innovation, according to Schumpeter (1934), covers: 1) The introduction of a new good or a new quality of the good 2) The introduction of a new method of production 3) The opening of a new market 4) The conquest of a new source of supply

MAIN TYPES OF INNOVATION :

1) A product innovation is the introduction of a good or service that is new or

significantly improved with respect to its characteristics or intended uses. This includes significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics. Product innovations can utilize new knowledge or technologies, or can be based on new uses or combinations of existing knowledge or technologies. 2) A process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software. Process innovations can be intended to decrease unit costs of production or delivery, to increase quality, or to produce or deliver new or significantly improved products. 3) A marketing innovation is the implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing. Marketing innovations are aimed at better addressing customer needs, opening up new markets, or newly positioning a firms product on the market, with the objective of increasing the firms sales. 4) An organizational innovation is the implementation of a new organizational method in the firms business practices, workplace organization or external relations. Organizational innovations can be intended to increase a firms performance by reducing administrative costs or transaction costs, improving workplace satisfaction (and thus labor productivity), gaining access to nontradable assets (such as non-codified external knowledge) or reducing costs of supplies. MAIN TYPES OF INNOVATION

Product

Process

Marketing

Organisational

Element that can jeopardize Innovation Poor Leadership / Organisation/ Communication. Poor Empowerment/Knowledge Management. Poor goal definition. Poor participation in teams.

 Poor monitoring of results. Poor communication and access to information. NEED & IMPORTANCE : WHY WE NEED TO INNOVATE? In order to cope up with changing environment there is need to innovate something as change can be anticipated but cannot be eliminated. Today due to increasing competition and accelerated products and service development cycles, innovation factor is now taking the driver seat and playing crucial role in any corporate success. Companies may seize upon a good idea that gives them an advantage for a while, but sooner or later, they cede this advantage to a competitor who has found an even better idea. Innovation is at the heart of sustaining a companys competitive advantage. This holds very true as long as any company wants to stay on top of their competitors and win the innovation game. IMPORTANCE OF INNOVATION : Anticipate market tendencies
Technology is changing fast, new products come from new competitors

Fast changing environment, product lifetimes shorter, need to replace products sooner
Products are increasingly difficult to differentiate Customers are more sophisticated, segmented and demanding, and expect more in terms of customization, newness, quality and price Customers have more choice New technologies no-one understands Apparently separate technologies come together Markets forming and changing fast.

Valuation of longevity of business With markets and technology changing fast, and good ideas quickly copied, there is continual pressure to devise new and better products, processes and services faster

CONCLUSION: Innovation is extremely important that companies often see their employees creativity as a solution. Innovation is a tool to measure the value the longevity of business. A business must also sustain itself, be able to constantly evolve to fulfil the demands of the community and the people. In every business, it is imperative to be industrious, innovative and resourceful . The importance of innovation in entrepreneurship is shown by coming up with new way to produce a product or a solution.