Innovation is an inherently risky undertaking. Most innovation projects are characterized by both technical uncertainty (will the project result in a technically feasible product or service?) and market uncertainty (what features will customer prefer and what will they be willing to pay for them?) In their eagerness to innovate, firms are at risk of undertaking too many projects, overestimating their potential returns and underestimating their uncertainty. This is compounded by the fact that many people mistakenly believe that creativity can only be tapped through an unstructured process, when in fact innovation is most powerful and has a greater likelihood of success when it is planned and implemented strategically.
In Innovation projects it's always a process of finding out a new thing or new outcome. In that point throughout the project only the costs and expenses are associated with the project. For example research and development, material cost and etc. as we can see only the expenses are generated up to the final point of the project where the final outcome appears. For example if a company runs a project on an innovation project which is about new fairness cream until final product, the fairness cream only the expenses and costs are associated for the areas such as research and development, materials for the cream, wages and etc. The generating of revenue or economic return begins when the fairness cream reach the market place and when there is the start of sales and marketing process of the company. Therefore to reach the breakeven point it takes some time after the project. Therefore only project itself does not generate any economic return as it only generates a final outcome which is a product or a service. In that point economic return generation is a process which I s always after the innovation process, that's the main reason why all the innovation projects fail in economic return generation.
Please join StudyMode to read the full document