“Science fiction writers foresee the inevitable, and although problems and catastrophes may be inevitable, solutions are not”.
– Isaac Asimov, Professor & Science Fiction Author
For long innovation has captivated the minds of many. No difference with me. So I thought why not blog about innovation? Why not give a brief overview if possible? Anyway, I had specialised in innovation and entrepreneurship while at TU Delft 🙂 This blog is unlike what I usually post, but hope it’s useful and we understand innovation in a somewhat different way!
I’ll start with Schumpeter’s definition of “Innovation”. Innovation is characterized by new (re)combinations of products, processes, services, markets & organizations. I like this definition particularly because Schumpeter looks at Innovation holistically. I won’t go into definitions henceforth but summarize and give an overview of classical literature in 2 lines and add a third, albeit my vision is part of this third statement. I won’t be audacious or foolish to claim this covers all of innovation and their terms (because they do not), but I would be fair in saying the broadest range is covered below.
Overview of Innovation
Line 1- There are essentially 5 categories of Innovation – Product, Process, Services, Business Model and Management.
Line 2 – Further which there are 2 types of Innovation – Radical and Incremental, &, Open and Closed.
Line 3 – The result, if we may call it so – once the categories and types are chosen, is the “exploration & exploitation” innovation. These are the ways of innovation. The ultimate idea is to “design” the categories and types of innovation to these ways of innovation.
But where does innovation begin?
Innovation happens at 3 levels – internal (inside the organization), alongside the extended enterprise (at the fringe with the help of suppliers, partners, competitors etc – all those enabling the functioning of the organization) and the entire ecosystem (investors, regulations, associations, university etc who influence the markets and hence the organization, forcing companies to innovate). This is important because innovation is an outside-in and inside-out activity! Innovation can happen anywhere, and so what should organizations do in this case?
From the first perspective of an “outside-in”, Innovation in the industry is predominantly two fold – Product and Services. What I mean with this is we have Product companies and we have Services companies. The former are companies that make products and innovate with artifacts or new technology, and, the latter are companies that make services for those products. Although this is a concept drastically changing, and my next post will address the blurring of lines – for simplicity, for the moment, we continue this assumption.
Product companies typically are ‘technology push’ in nature. They make the first move in the market and have large & formal R&D budgets allocated to innovation.
An Entrepreneurial setup in a product company will look at Innovation as ‘a culture where formalized, structured Innovation teams don’t work’.
Established players and large enterprises need to have a more ‘formalized innovation team with structure‘. This is not ‘wrong’, because of the impact these large enterprises have on the market, and the business-needs of the investors.
Services companies are mostly reactive or dependent on market-trends to innovate. They typically depend on product companies to innovate. They milk the cash cow with existing knowledge, scan the market for emerging technologies and learn new technologies to build new services & solutions.
For now, I stop with this. In the next post we start slicing and dicing the terms above with examples 🙂 We place innovation in perspective the current trends of Social Media, Mobility, Analytics and Cloud. I’ll end with saying Innovation is something like a design. There is no one single way to do it. There are a number of factors that affect innovation and we discuss them in the next post.
We are living in some troubled times at the moment. Much work needs to be done: people are fighting mindlessly over trifle issues! We need waves of happiness and sense knocked into the minds of some so-called powerful men to walk together as a one world family – Samgachadwam samvadadwam samvomanaamsi jaanataam! This is also a sort of innovation 🙂
Until next time