Study Guide for Chapter 1 of Exploring Innovation – Introduction
By Team 1 of G27
Members: Lee Qian Yi, Mai, Sharon, Alicia Poon, Terence Tan
Appreciate the importance of innovation for business and the national economy 2.
Understand the nature of innovation and able to distinguish between invention and
3i. Describe the activities associated with innovation
3ii. Appreciate the part business models play in innovation
4. Understand the link between innovation and diffusion
Note: The words in blue are our group’s examples and the underline parts are the important keywords
Importance of innovation:
1.1 Innovation is important for business for the following reasons: *
It allows them to respond to social/global trends and competitions via the processes of differentiation. Social trends are always in a constant course of change due to our drive for development and the ever-zealous competitions between multinational corporations. As such, this conveyor belt of responses to social trends allows for differentiation because it encourages varying companies to come up with unique selling points of their own.
In doing so, businesses benefit from innovation as consumer’s demands are constantly being met while satisfied customers in turn are willing to pay for an assured value of their purchase every time a new innovation is being announced. This form of value proposition signifies the importance of innovation to businesses because not only profits are to be gained from improvements to existing products or from radical innovations.
Businesses are essentially expanding their pool of consumers by further satisfying their needs and demands. This in turn provides for a steady stream of profits for the businesses.
Innovation can also assist businesses in cutting down production costs on the whole. For example, Toyota’s manufacturing lines are constantly being updated and improved to suit the production of varying car models at a reduced cost and higher efficiency. While technology allows for their car manufacturing to be sped up – via the usage of computers and virtual transmission of information – innovation can also be exploited to hasten the processes of manufacturing by modifying the production line. In the long run, innovations can effectively enable a business to reduce production cost significantly while maintaining/increasing their production output.
This will indubitably ensure the survival of the business in the economy over a long period of time.
1.2 Innovation is important for the national economy for the following reasons *
It allows for nation branding on a global scale. Take Japan for example, their intensive investment in electronic device innovation has claimed them a global status of technological paradise.
This is beneficial for a nation’s economy because it essentially increases a country’s international attractiveness and consequently the robustness of their economy.
Innovation also allows for a country to respond to shifting global trends. This can be seen in the example of Maldives. In the past, Maldives used to be a country that relied on intensive agricultural activities to sustain its economy. However, recognizing a rising trend in the west where people are willing to pay more for luxury goods and tourism activities, Maldives has successfully took this new idea of responding to the west and innovated it by transforming their island into a prime tourism spot. Today, we see Maldives populated by many luxury hotels filled with expensive tourism packages for tourists to indulge in.
From here, we can clearly see that innovation can boost the vitality of a nation’s economy by responding to shifting global trends and competitions.
2. Definitions of “Innovation” :
‘Innovation is the successful exploitation of ideas’...
Please join StudyMode to read the full document