Innovation is the conversion of new knowledge into new products and services. Innovation is the process of making changes, large and small, radical and incremental, to products, processes, and services that results in the introduction of something new for the organization that adds value to customers and contributes to the knowledge store of the organization. It is the ability to apply solutions to problems and opportunities to enhance or to enrich people’s lives. Innovation is a process by which entrepreneurs convert opportunities into marketable ideas (Howell&Higgins,1990). Innovation is the specific instrument of entrepreneurs, the mean which they exploit change as an opportunity for a different business or a different service(Drucker,1985).
The terms entrepreneurship and innovation are often used inter - changeably, but this is misleading. Innovation is often the basis on which an entrepreneurial business is built because of the competitive advantage it provides. On the other hand, the act of entrepreneurship is only one way of bringing an innovation to the marketplace. Technology entrepreneurs often choose to build a start up company around a technological innovation. This will provide financial and skill-based resources that will exploit the opportunity to develop and commercialize the innovation. Once the entrepreneur has established an organization, the focus shifts toward its sustainability, and the best way that this can be achieved is through organizational innovation. However, innovation can be brought to market by means other than entrepreneurial start ups ; it can also be exploited through established organizations and strategic alliances between organizations.
An innovation must add value to customers to make them purchase or consume the product or service or perceive an improvement. An important part of the exploitation process is ensuring that the innovation adequately full fills prospective customers’ needs. The better the innovation full fills customer needs, the more likely customers are to adopt it. A common mistake technology companies make is to focus on the technological capability of their offering rather than on how that technology can satisfy customer needs. It is important to emphasize that a customer is anyone who purchases or uses a product or service. Customers can include students who purchase a book in the university bookstore, patients who use services in a hospital, or members of the public who use the services of a local library. Customers can also be internal to an organization. University lecturers who offer a service to students are in turn customers of the library, for example. Doctors who deliver a service to patients are also customers of support laboratories, and librarians are customers of the library’s computer service department. Forms of Innovation.
Innovation is often in the eye of the beholder - what may be new and radical for one person, may be old news for another. Despite this subjectivity in identifying and classifying innovation, there has been useful work in thinking about the focus of different innovation processes, guided by the question: what is it that innovation processes seek to change and improve? The ‘4Ps’ model developed by John Bessant and Joe Tidd provide a powerful tool for such analysis. It builds on the hypothesis that successful innovation is essentially about positive change, and puts forward four broad categories where such change can take place: 'Product innovation’ – changes in the things (products/services) which an organisation offers 'Process innovation’ – changes in the ways in which products and services are created or delivered 'Position innovation’ – changes in the context in which the products/services are framed and communicated 'Paradigm innovation’ – changes in the underlying mental models which shape what the organisation does Product innovation Perhaps the most commonly understood form of innovation is that...
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