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PERSPECTIVES ON INNOVATION

LEARNING OUTCOMES

At the end of this chapter, students should be able


to:
 Describe the various definitions of innovation.
 Distinguish between innovation, invention and
creativity.
 Discuss the factors that affect innovation.
 Identify the sources of innovation.

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INTRODUCTION

 The word innovation originates from the Latin word “innovare”,


which means ‘to make something new’.
 Innovation includes both new technologies and new ways of doing
things.
 Innovation as a process which has to be established in an
organization for continued enhancement.
 Innovation management is the systematic processes that used to
develop new and improved products, services and processes.
 Innovation is a major part of any organization, essential for growth
by distinguishing the organization from others.
 Success of innovation depends on the future vision of and the
encouragement from the organizational culture.

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IMPORTANCE OF INNOVATION

 Innovativeness has become a force in wealth creation and


business success.
 It leads to new business ideas and technological revolutions.
 The survival aspect that an established organization would need is
to innovate, or face the consequences of extinction.
 Innovation, apart from products and services, also includes
processes, supply chain systems, marketing methods and
leadership/management styles
 With the impact of globalization, coupled with technological and
knowledge revolutions, organizations and businesses will have to
constantly adapt to an ever changing business climate.
 Innovation will help add value and propel organizations forward
towards overall improvement.
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INNOVATION, INVENTION AND
CREATIVITY

 Innovation
– Ideas, concepts, and inventions are the precursors of innovation. Ideas
and concepts cannot generally be implemented.
– Innovation is about introducing something new or doing something in a
new way. The goal of innovation is to take an idea from concept to
realization and improve business performance.
– Innovation begins with an idea that is transformed into a concept that
includes some new combination of what is already known and can be
implemented to serve a purpose.
– Invention and innovation involve creativity.
– The goal of innovation is positive change, to make someone or
something better.

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INNOVATION, INVENTION AND
CREATIVITY

 Invention
– Invent something did not exist.
– Example of invention: Components, assemblies, mechanisms, and
various types of equipment used in daily living
– Inventions normally associated with patents, however many inventions
are never patented.
– Many organizations do not patent their processes but instead treat them
as organization–confidential
– Because once a patent is issued, knowledge of the invention becomes
available to all who choose to search the patent literature.
– To be competitive is to have patents that add significant value.

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INNOVATION, INVENTION AND
CREATIVITY

 Creativity
– Creativity is the generation of ideas that result in the improved efficiency
or effectiveness of a system.
– Creativity (or creativeness) is a mental process involving the generation
of new ideas or concepts, or new associations between existing ideas or
concepts.
– Creativity allows the entrepreneur to manufacture products that are
different from products manufactured by competitors, allows a product
to stay in the market and have preference among customers.
– Creativity has close connections with revolution, evolution and
dynamism.
– Innovation and creativity work in a kind of critical tandem, but successful
innovation requires more than just creativity

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THE INNOVATION CONTINUUM

 Innovation lies on a continuum of events that begins with a raw


idea, which is developed into a concept, which then yields some
type of invention, and which is finally implemented and
commercialized.
 These are progressive and iterative stages that describe the
innovation process.
 Too often words like ‘ideas’, ‘concepts’, ‘inventions’, and
‘innovation’ are used interchangeably.
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THE INNOVATION CONTINUUM

 Ideas
– Raw ideas provide little value unless someone pursues them.
– Few idea generators take the time to adequately describe the idea, and
many organizations, though not suffering from a lack of raw ideas, suffer
from a lack of interest in pursuing them.
 Transforming Idea to Concept
– Transforming an idea into a workable concept involves taking account of
the system in which the idea will be implemented.
– In the formative stages of the concept, the available information may be
limited but still needs to be considered.
– In addition, new information needs to be gathered and factored into the
decision process.

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THE INNOVATION CONTINUUM

 The work effort in transforming ideas into developing concepts


includes the following tasks:
 Identifying the available resources—the required resources from either within or
outside the organization
 Understanding the organizational infrastructure—the infrastructure that supports
innovation
 Assessing the competencies and capabilities of the organization—individual,
team, and various group competencies that are required to develop into
organizational capability
 Interpreting economic and global demographic information—information related
to the context of the concept under consideration
 Evaluating the competencies of all the support functions—the skill levels of the
organizational support functions, noting the deficiencies
 Managing the interfaces—those involved in bringing any concept to fruition
 Integrating individual, team and group competencies into organizational
capability—individual competence that develops into organizational capability.
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FACTORS THAT AFFECT
INNOVATION

 Resources
– Organizational resources include people, money, intellectual property,
access to information, capability, time, customers, suppliers, plant and
equipment and financial reserves.
– All the resources mentioned play a vital role in producing innovative
products or services for an organization.
 Infrastructure
– The organizational infrastructure includes the purpose of the
organization, its objectives, its strategies, management attributes, and
its support of innovation.
– The infrastructure of an organization will also provide support for any
new ideas, invention and innovative ideas.
– A strong organization with such strategies will encourage employees to
co-operate in producing new products.
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FACTORS THAT AFFECT
INNOVATION

 Culture
– An organizational culture includes shared values, beliefs, legends,
rituals, past history, intellectual and operational traditions, pride in past
accomplishments, policies and practices, rules of conduct, the
organization’s general philosophy of operation, and other artifacts that
define the organization.
– A healthy culture will make employees feel easy to give suggestions to
the organization’s management team.
 Process
– Consists of an idea from some recognized need that is developed into a
concept, followed by an invention, and then taken through development,
production, diffusion and adoption by end users.

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SOURCES OF INNOVATION

 The Unexpected Event


– An unexpected failure, an unexpected success or an unexpected
outside event can be a platform of a unique opportunity.
 The Incongruous
– A discrepancy between reality and what everyone assumes it to be, or
between what is and what ought to be, can create an innovative
opportunity.
 The Process Need
– This one is task-focused rather than situation-focused. A process is
perfected, redesigned or a weak link replaced.
 The Industry and Market Structure Change
– The opportunity for an innovative product, service or business approach
occurs when the underlying foundation of the industry or market shifts.

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SOURCES OF INNOVATION

 Demographics
– Changes in the population’s age structure, size, income, level of
education and employment can create opportunities for innovation.
 Changes in Perception, Meaning, and Mood
– Innovative opportunities can develop when a society’s beliefs, attitudes
and general assumptions change.
 New Knowledge
– Advances in scientific and non-scientific knowledge can create new
products and new markets.

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INNOVATION CULTURE AND
MYTHS

Myths Reality
Individuals drive innovation. Innovation is a team sport.
Innovation begins with brainstorming. Innovation begins with understanding
the customer.

Innovation requires creative people. Innovation requires effective problem


solvers rather than creative people.

An innovation process will give the The innovation process is only one tool
results you need. for successful innovation.

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SUMMARY

 Innovation encompasses four major components: culture,


resources, process and infrastructure.
 An organization needs to be innovative in order to survive in the
marketplace.
 Innovation involves ideas developing into concepts, materializing
into invention, ending with innovation.
 Innovation happens when an invention matches implementation
and is finally commercialized.
 Innovation effort must be nourished by a supportive organization
culture.

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