Why Innovation is Important to Business Success?

By: Frank Reynold

What is innovation?

Innovation is coming up with a new idea and turning it into an effective process, a new product or service. The implementation of creativity and innovation in business is likely to incorporate success and help you stand competitiveness in the market. Innovation can be referred to as something new or introduced differently and has impact on market or society.

Organizations need development first to keep presence in the market, and second to be competitive. There are a lot reasons why you need innovation in your business. A successful business model won’t be developed if you have a walking dead organization, meaning to have a

stagnated business that does not embrace change and refuse or don’t know how to let creativity breath come in.

You need instead dynamism on different levels. You may innovate by coming up with new ideas of new products or reshape existing ones. Innovation can also be implemented by improving services and the way the organization is operating. As businesses and activities vary, there are also different types of innovation, and you choose your model depending on your needs and markets’.

Innovation Importance

Innovation has always been so important, thus it was under the radar of academic research. A lot of scientific studies have been carried by researchers to understand innovation process and how can Innovation Impact Enterprises? They gone through importance of innovation for businesses and investigated the implementation of innovation in different models and measurement of performance.

With the new challenges of globalization and open markets, competition toughens considerably and need for change is becoming more crucial. A recently published study carried by researchers from a Faculty of Management and Economics in Czech Republic has investigated this defy and noticed how Czech business companies “assign big importance to both inner and outer innovation.”

The effective innovation process is something done strategically based on creative thinking and innovation strategy. Unlike the invention process that starts by problem and goes for solutions, effective innovation can start by supposing a solution and looks what problem it solves.

Innovation and Performance

Another study from South Africa has gone through the understanding of “conceptual framework of an innovation system model”. Researchers said that “Education and training bodies were found to be amongst the most important participants, supporting firms in the innovation system due to their contributions to the development of sufficiently qualified human resources and by their contribution to R&D capacity - two of the most important determinants of innovation”.

There are a lot of factors that affect innovation process of business including “science, technology and R&D intermediaries” as stated by the researchers. They also stressed on the importance of government as well as “Financial institutions and venture capitalists… due to the role that finances play in innovative activities.”

Innovation and Knowledge

One of the matters that should not be overlooked in innovation is relation between knowledge and innovation. Researchers focused that “knowledge and expertise are transferred serve as both

a source for, and stimulus to, innovation”. So, effective and true innovation is led by knowledge. “The transfer of knowledge from universities to firms or from MNEs to their national branches was one of the better-known knowledge transfer linkages identified” the study confirms.

Measuring Innovation

Innovation is believed to be a generator of growth and success for businesses. As stated in this research “relation between innovation and performance provide evidence that this relation is positive”. Yet, measuring innovation results and their impact has not been something easy. It is something done based on different metrics. “Measuring innovation should be carried out effectively, efficiently (must bring relevant information to the corporate management) and economically (must be done at a reasonable cost)” as stated by the mentioned research.

What differs a business from another is the new ideas it come up with. You can live on imitating others’ steps for a while, but this won’t last, or it won’t take your far away to meet success you opt for. To ensure success for your business, you need to think out of the box and come up with original ideas that might be in many times simple, but would define your business model and will lead success of your organization.