why innovation important

Innovation is the process of transforming ideas into novel products, services, or processes, whether they pertain to goods or processes. It necessitates not only the identification of demands, but also the availability of qualified personnel, pertinent technology, and financial backing. An idea is innovative if it can be replicated economically and satisfies specific demands.

4 TYPES OF INNOVATION

1.	Sustaining, or incremental innovation
2.	Breakthrough innovation
3.	Disruptive innovation
4.	Basic research

The significance of innovation

Innovation is the most essential source of competitive advantage, particularly during the fierce competition (hyper-competition). With it, businesses can:

• Develop new items that better meet customer requirements, for as by differentiating them.

• Improve the quality of existing items to increase income and enable the company to charge a premium price.

• Lower the cost of producing the customer-requested product.

• Enhance the efficacy and productivity of corporate processes.

• Boost the likelihood of discovering new possibilities.

• Respond effectively in dynamic corporate contexts to change.

Often, competitors will attempt to imitate effective and frequently successful innovations. Maintaining a competitive advantage necessitates a continuous commitment to innovation.

Varieties of innovation

There are four sorts of innovation:

• Product development

• Process development

• Position innovation

• Paradigm innovation

If it is based on pre-existing products, innovation may also be continual innovation. Businesses implement tiny modifications without altering client habits.

Or, it is discontinuous innovation in which the product is as novel and distinct as a light bulb or computer when they first appear. It frequently alters consumer behavior and the competitive landscape.

Clayton Christensen makes a distinction between sustaining and disruptive innovation. The former refers to product enhancements based on the present client needs that are known. In the meantime, disruptive technologies generate new markets and alter the competitive landscape by displacing existing competitors.

Product development

It generates new goods from existing concepts or modifies existing products in terms of their technical specifications, components and materials, user-friendliness, or other functional aspects.

Creating electric or hybrid automobiles is one example. Developing laptops following the invention of the personal computer is another example.

Process development

It creates new or modified methods, procedures, and techniques for producing a product. Methods such as lean manufacturing, six sigma quality, and overall quality management are examples. It may also involve considerable modifications to production procedures, equipment, and software.

Position innovation

It involves shifting customer views of a specific product. As an illustration, mobile phones were sold as communication instruments. Yet, they are increasingly considered indispensable lifestyle and fashion items.

Paradigm innovation

This is a standard modification to the way things are done. Currently, a cell phone is all that is required to carry a book when traveling. Similarly, meeting new friends does not require face-to-face interaction, as social media sites and other online methods are sufficient.

The spread of innovation

Creativity does not spread, and the entire population takes it for granted. Instead, its adoption is occurring gradually. Specialists then create the innovation diffusion theory to explain how, why, and how quickly new ideas and breakthroughs spread. They split market users into five categories:

• Innovators

• Initial adopters

• Early middle age

• Late majority

• Laggards

Innovators are the pioneers of adoption. There are a few of them. People are prepared to assume the risks connected with adopting the product since it may be backed by a high social position or significant financial backing. In addition, they have the most engagement and contact with other innovators and scientific sources.

The early adopters are the following group. They have the highest degrees of opinion leadership and make adoption decisions with greater wisdom than innovators. In addition, they receive enough financial and educational support.

Early majorities captured a significant portion of the market population. They eventually accept advances, as do quite a few people. They have an above-average social standing, yet they rarely assume positions of opinion leadership.

Late majorities are the population segment that follows the early majority. They accepted the innovation after the majority of the populace had already done so. They are relatively cautious of innovations, maybe as a result of their below-average financial and social standing.

Laggards are the slowest to accept new technologies. They tend to resist change and preserve the status quo and traditions. They have the lowest social standing and financial assistance among the five categories.

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