What is innovation? Why innovation is important for a company?
Posted on July 5, 2009 - Filed Under Self Development | Leave a Comment
What is innovation?: The term ‘innovation’ means a new way of doing something. In context of corporate ‘innovation’ means the process by which an idea or invention is translated into a good service for which people will pay. It is a positive change to make someone or something better. Innovation leads to increase in productivity and is the source of increasing wealth in an economy.
Following points explain the importance of innovation in a company, throwing light on why a company have to innovate and what will happen if the company don’t innovate:
- Company needs to innovate to harmonize with the advancing technology. Fast changes in technology demands that the products are more and more sophisticated.
- Evolving society needs advanced products. The customers demand the best possible thing for the day and the latest products are in demand. Thus the factor ‘customer satisfaction’ is vital and it relates to innovation.
- The products, processes and services of the company need to be one step ahead of competitors. Otherwise the company loses the game.
- Innovation leads to better corporate positioning, increased market value and faster growth in the company.
- Fast changing environment and lifestyles of people have greater expectations. Moreover, the good ideas are quickly copied and there is pressure to devise new and better products, processes and services for the customer.
- If the company don’t innovate, the customers stop buying the products, the sales drop, revenue drops, stock price drops, shareholder returns drops, and employees leave the company and finally the company collapses.
