Process of innovation

From CEOpedia | Management online

Innovation is a process of creating something new that develops overall effects in the economy and technological approach (Mónica Edwards-Schachter 2018, p. 1). It is a presntation of something completely new or just slightly upgraded goods and services (Paula Anzola-Román 2018, p. 234). Upgrading the innovation process makes investors able to finance completely new investments (Marisa Dziallas 2018, p. 1). It is also very important to remember that innovation always require some kind of investment that company need to put in it. This can include assets, salaries or purchase of materials and more. Proper investment can give in potential returns in the future (OECD 2005, p. 35).

Linear process of innovation distinguishes following stages:

  • Basic research - theoretical considerations, the aim of which is to create new ideas.
  • Applied research - finding practical solutions for created projects.
  • Development works - creation of a prototype.
  • Implementation - starting the manufacturing activity, checking the production technology (see: importance of technology).
  • Production - start of production using the technology.
  • Sales - initiation of sales.

Innovations can arise as a result of research and development, as well as the emerging market demand for new, improved products.

Types of innovation

There are few types of innovation (R.P. Jayani Rajapathirana 2018, p. 46):

  1. Product innovation.
  2. Process innovation.
  3. Organizational innovation.
  4. Market innovation.

Policies of innovation

It is possible to divide three policies of innovation (Jan Fagerberg 2018, p. 1568):

  • Eco-innovation policy,
  • Transformative innovation policy,
  • Mission-oriented policy.

Examples of Process of innovation

  • Design Thinking: This process of innovation is used to develop new ideas that solve specific problems or create new products or services. It involves a set of activities such as understanding the problem, brainstorming ideas, prototyping, and testing. Design thinking has been applied in many areas such as engineering, business, and design (Haigh et al., 2017).
  • Lean Start-up Methodology: This is an approach to innovation that focuses on developing a minimum viable product (MVP) as quickly as possible and then testing it with customers to get feedback. The goal of the lean start-up is to quickly validate or invalidate the idea and understand what is needed to make it successful. This process is often used in the technology industry to develop new products or services (Ries, 2009).
  • Open Innovation: This is an approach to innovation where companies collaborate with external partners to develop new ideas and products. This process involves leveraging external knowledge, resources, and capabilities to create new products or services. Open innovation is often used in the pharmaceutical and biotechnology industries (Chesbrough, 2003).
  • Crowdsourcing: This is a process of innovation where companies use the power of the crowd to solve problems. Companies can post challenges on platforms such as InnoCentive or NineSigma and invite people from around the world to submit ideas or solutions. This is often used in the technology industry to develop new products or services (Schenk, 2017).

Advantages of Process of innovation

Process of innovation provides a lot of advantages, such as:

  • Increased efficiency: Innovation process enables companies to create more efficient processes and products, which can save costs and time. This can lead to increased productivity and profitability.
  • Improved customer service: By innovating, companies can develop new products and services that meet customer needs more effectively and efficiently. This can lead to improved customer satisfaction and loyalty.
  • Enhanced competitiveness: Innovation process allows companies to stay ahead of the competition by creating new products and services that give them an edge in the market.
  • Improved market share: By creating innovative products and services, companies can increase their market share and create a strong brand presence.
  • Enhanced economic growth: Innovation process can stimulate economic growth by creating jobs and increasing investment, which can lead to more opportunities for people and businesses.

Limitations of Process of innovation

The process of innovation is not without limitations. These limitations include:

  • Time - innovation requires a significant amount of time and resources to develop, refine, and bring to market. It can take years before the resulting products and services are ready for use.
  • Cost - innovation requires substantial upfront investments in research and development. It is often expensive to bring a product or service to market, and even more so to maintain it.
  • Risk - for any new product or service, there is always a risk that it will not be successful or that it will not achieve the desired outcome. This risk can be hard to quantify, and can lead to significant losses if the product or service fails.
  • Competition - competition from existing products and services can make it difficult for a new innovation to gain traction in the market. It is important to be aware of the competitive landscape when developing a new product or service.
  • Regulation - regulations can be an additional barrier to innovation, as new products and services may be subject to different rules and regulations than existing ones. It is important to understand the regulatory environment before launching a new product or service.

Other approaches related to Process of innovation

A successful innovation process can involve many different approaches. These include:

  • Developing a clear vision: Companies need to have a clear vision of their goals when it comes to innovation. This includes setting measurable objectives, understanding customer needs and interests, and establishing a timeline to achieve desired results.
  • Fostering a creative environment: Companies should create an environment that encourages and rewards creative thinking, new ideas, and risk taking. By having open lines of communication and encouraging collaboration, companies can foster a healthy climate for innovation.
  • Investing in research and development: Companies need to invest in research and development in order to stay ahead of the competition. Investing in the latest technology, tools, and processes is essential for continued innovation.
  • Analyzing data and trends: Companies should analyze data and trends related to their industry in order to identify opportunities for innovation. This analysis can help companies anticipate customer needs and develop solutions to meet them.
  • Developing a culture of innovation: Companies should develop a culture of innovation in order to ensure continued success. This means creating an environment that encourages innovation and risk-taking, while also rewarding the ideas that lead to success.

In summary, successful innovation requires companies to invest in research and development, foster a creative environment, develop a clear vision, analyze data and trends, and develop a culture of innovation. By following these steps, companies can ensure that their innovation efforts are successful.


Process of innovation — recommended articles
Innovation and creativity — Management of innovation — Suggestion for improvement — Innovation and change — Radical innovation — Total Innovation Management — Innovation — Transfer of knowledge — Entrepreneurship and innovation

References

Author: Olga Marmuszewska

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