Innovation

Innovation refers to the entire process encompassing the use of creativity and research to generate new ideas, feasibility studies to evaluate their cost-effectiveness, risk analysis, design and development, new policies and procedures, market research and marketing, and implementation of the new product or service. It is, according to Porter (1991), “a new way of doing things”. Effective innovation boosts the effectiveness and efficiency of organizations and individuals. Innovation is not just related to high technology industries and is more than simply the initial "big idea" or the end product or service that results from it. Innovation is more accurately defined as a process through which knowledge can be translated into new products, new services or an increase in productivity through new methods.

The success of any new product, new service, or new production method is dependent upon the availability of a complete system of interactions between the innovator and those individuals and organizations that can help move the innovation from the idea stage to research and development and implementation.

The new knowledge can be:

• technological or
• market related.

Technological knowledge is knowledge of components, linkages between components, methods, processes, and techniques that go into product or service. Market knowledge is knowledge of distribution channels, product applications, and customer expectations, preferences, needs and wants. The product or service is new in that its cost is lower, its attributes are improved, it now has attributes it never had before, or it never existed in that market before. Often the new product or service itself is called an innovation, reflecting the fact that it is the creation of new knowledge, or it is new to clients. 

Innovation has also been defined as ‘the adoption of ideas that are new to the adopting organization’. However, coming up with the idea or prototype – invention – is one thing. Championing it, shepherding it, and nurturing it into a product or service that customer want is another. Innovation entails both innovation and implementation.