What is Innovation.?

1. a new idea, method, or device : novelty.

2. : the introduction of something new. Meriam Webster

 Innovation is the practical implementation of ideas that result in the introduction of new goods or services
or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines
innovation as "a new or changed entity realizing or redistributing value". Wikipedia

Innovation is a process by which a domain, a product, or a service is renewed and brought up to date by
applying new processes, introducing new techniques, or establishing successful ideas to create new value.
The creation of value is a defining characteristic of innovation. Innolytics.com

Innovation starts with a new idea. It could be a plan for an improved product or service; it could be an updated
method for running your operations; it could also be a new business model. It can touch on any part of your
business and does not necessarily need to be novel—it could have been implemented at another company.
https://www.bdc.ca/en/articles-tools/business-strategy-planning/innovate/what-is-innovation

If there is a term that is difficult to define, it is “innovation”. However, there are common delimiters to the
concept of innovation, such as novelty or that a new product or service creates value for its stakeholders and
can meet the needs of its main market.

For a 21st-century company, one mantra reigns: growth velocity. In a world of constant change, the
organizations that thrive are those that innovate, that can make decisions in real-time, and whose processes
are continuously improving. It is a matter of keeping up with market demands and scaling fast.

While the debate about its meaning could take hours, the idea is to give the most accurate definition of
innovation. According to the Organization for Economic Co-operation and Development (OECD) innovation is:

“The implementation of a new or significantly improved product (good or service) or process, a new
marketing method or a new organizational method in business practices, workplace organization or
external relations.“

As such, the new version of a product is always more attractive than the previous one, even if the innovation
lies in the marketing message of that product. Take Apple for example, they present each new iPhone model
as the innovation of the year when in reality it’s almost identical to its predecessor.
https://get.agorize.com/en/resources/what-are-the-4-types-of-innovation/

 is generation and implementation of new ideas, processes, products and services. The both definitions.
contain the word implementation, and that there is. something new to attribute. Diva-portal.org
 In a business context, innovation is the ability to conceive, develop, deliver, and scale new products,
services, processes, and business models for customers. mckinsey.com

What is innovation Management?

Innovation management involves the process of managing an organization's innovation procedure, starting at
the initial stage of ideation, to its final stage of successful implementation. It encompasses the decisions,
activities and practices of devising and implementing an innovation strategy. Techtarget.com

Innovation management is a combination of the management of innovation processes, and change management. It
refers to product, business process, marketing and organizational innovation. Innovation management is the subject
of ISO 56000 series standards being developed by ISO TC 279. Wikipedia

Gartner defines innovation management as a business discipline that aims to drive a repeatable, sustainable
innovation process or culture within an organization. Innovation management initiatives focus on disruptive or
step changes that transform the business in some significant way.
www.gartner.com
Influences of Technology on Innovations

Technology is, without a doubt, one of the most important developments in human history in terms of human
advancement. From new scientific discoveries to helping us live longer and healthier lives to ways of
communicating and sharing ideas with people in various parts of the world, technology has enhanced our lives
in ways we could never have imagined.

Technology has revolutionized many aspects of our daily lives and has become an integral part of our work,
relationships, culture, and society, from education to health, finance to entertainment, insurance to real estate,
etc. https://www.linkedin.com/pulse/impact-technological-innovation-society-emozo-labs-inc

Technology as founder of new markets

New technology has a huge impact on markets and market dynamics. This has always been the case, but in
the digital age this is happening faster than ever before. Over the last decades we’ve seen how digital
technology has disrupted many different markets. Streaming has disrupted the music industry, as well as TV
and film, and social media has radically disrupted the entire media sector.

Let’s take a look at 5G – a technology that Ericsson is developing. As 5G starts to become a reality in the
marketplace, many new capabilities and possibilities emerge, such as network slicing, ultra-low latency,
lightening fast speeds, and extreme reliability to mention a few. And these capabilities are enabling many new
use cases: from remote controlling vehicles in a mine to small sensors that have 10 years of battery life. These
technology features will transform the current logic in many businesses and create new markets for those who
sees the possibilities.

When new technology becomes established in our society it also drives new behaviors among people and their
role as consumers, and these new behaviors represent potential new markets. The same thing happens in
industries: when a new technology becomes available organizations can possibly change areas within their
business, such as value chains and operations, but also whole business models and the entire market itself.

Artificial intelligence (AI) is another hot technology area that will open new markets and market niches in many
industries. Today, most areas are related to innovation efficiency and effectiveness (the areas to the left in the
model I described in my previous blogpost).

The most common area of exploration today is the automation of business processes, for example, digital and
physical tasks. Harvard Business Review recently said that 25 percent of the 250 business executives in their
survey think AI will help them pursue new markets. Far more of these executives see AI as helping out with
efficiency and effectiveness in their current business logic.

Technology as vehicle for innovation

As we’ve previously discussed, innovation and technology are tightly interlaced. Two very notable ways
technology propels innovation forward is that it boosts tinkering and experimentation, and that in itself
accelerates innovation processes.

Not long ago experimentation with new technologies was only possible by multinational corporations or
government-funded research labs. Today, affordable technology – digital and other – makes it possible for
most enterprises – big and small – to experiment with ideas and concepts in whole new ways, and also in
reality instead of only in test labs.

For example, it’s now possible to test products and services online at a very low cost, as well as test out
updates, alterations and tweaks. Prototyping has become available to all through easy to use software and 3D
printing. AI can simulate various market scenarios based on available real-life data. Virtual reality makes it
possible to create completely new types of blueprints that actually make products and services come alive for
real, and thus make them possible to evaluate prior to building or manufacturing them.
Digital technology and the new technologies that it enables (like AR, VR and AI) cut the traditional industrial
age innovation process short. What used to take years of planning, testing, and executing can now be
accomplished in months and sometimes even weeks.

Another way emerging technologies – AI in particular – can speed up innovation, is by removing obstacles of
uncertainty or lack of information. Continuously identifying and ruling out hypotheses at a quick pace will no
doubt make the innovation process more focused and effective in generating strong solutions. AI, being far
superior to humans in analyzing big amounts of data in an instant, cuts innovation processes significantly. Data
is the protein of AI systems: if there is a sufficient amount of data, AI will be able to increase the speed of
innovation.

Technology as enhancer of human capabilities

One way of looking at it is that digital transformation, after having transformed domain after domain, has
reached technology itself and is beginning to recursively transform technological evolution as we know it. This
unlocks a great potential, but it also raises concerns as to what it means that technology – and not only
humans – has control over technological progress. As discussed further, there are both optimistic and
pessimistic stances in regard to our technological future.

Regardless of position in this matter, it is clear that emerging technologies are becoming increasingly important
in the very process of innovation.

Now, technological evolution has reached a point where it can help us overcome – or at least circumvent – our
own cognitive short-comings. Where the human mind fails to display characteristics beneficial for driving
change and creative thinking, technology can give us an extra push towards a greater innovative capacity.

One area close to my heart is design, and in particular design and innovation. The designer today has a
completely new set of possibilities and tools for designing and prototyping. Both rapid as well as creating
shapes and interactions that would have been impossible a decade ago.

Ericsson Strategic Design Lab is working with cities and city planning questions, and for this they are using AR
to remove buildings from a real environment and place models of the new architecture into it, creating a tool
that makes it possible to explore city planning with an extreme low cost and possibilities that were only fantasy
some year ago.

Another example is seen in car manufacturing, were companies are starting to do car models in VR instead of
the super expensive and time-consuming clay model that was traditionally used. And in the same industry,
there are newcomers such as Local Motors who are challenging the traditional way of designing and producing
cars using crowd sourcing, open source and 3D printing technologies for physical prototyping and production.

Finally, and to summarize, an understanding of new technology is necessary in two primary capacities:

 Understanding technology as a starting point: Organizations that want to innovate must (in most
cases) understand the seedbed that new technology creates for any market today. How has new
technology changed the conditions in your market and what technologies are out there that will
transform your products and services, and how do you model them for the market?
 Understanding technology as an enabler: The second capacity in which an understanding of
technology is necessary for innovation is as an enabler. For example, how new technology can help
make new ideas and inventions possible to realize on the market. Technology is also an enabler for
experimenting with new ideas and testing out new concepts, and organizations that understand how to
utilize new tech in this phase of innovation will gain leverage that other organizations lack.
www.erickson.com

What are the 4 types of innovation?

These are the four types of innovation that stand out and seem to be the preferred ‘solution’ among
organizations looking for groundbreaking ideas, concepts, products or talent.

1. Incremental innovation

Incremental innovation, also known as continuous improvement, refers to improving a product or service that
already exists. It is less ‘spectacular’ and disruptive than other types of innovation, but incremental innovation
is effective when addressing transformation issues within the company.

Moreover, incremental innovation is especially powerful thanks to its collaborative and collective nature. Value-
creating ideas often come from client-facing employees, those that talk with customers on a daily basis. In
addition, successful human resource development leaders have made it an asset to building a collective
culture of improvement. In this article, we dive deeper into the best ways to create such a culture.

The iPhone is a good example of incremental innovation, going from the iPhone 13 to the 14 and beyond.

To unleash the value of incremental innovation, you must have an idea management solution in place. Our
platform helps corporates engage talent, collect and assess ideas in a central hub and integrates with systems
through API. Learn more about how idea management platforms work here.

2. Adjacent innovation

Adjacent innovation is a typical example of a successful expansion. It refers to using existing capabilities (like
technology or knowledge) to appeal to a new audience or enter a new market. This provides a competitive
advantage to the original product or service that allows it to be differentiated in the market.

Let’s illustrate the concept of adjacent innovation. Big companies want to integrate groundbreaking products
and services into their portfolio. Rather than developing solutions themselves, they’ll look at their startups
ecosystems. They will use startup scouting programs to identify existing technologies, buy them and integrate
it in their own portfolio.

3. Disruptive innovation

Disruptive innovation refers to the actions taken by a smaller company to shake up an industry by targeting its
large, existing competitors’ overlooked segments.

Over time, the disruptive innovation party will accelerate and start taking over the main segments of the
industry. When the adoption of the new innovation by the main segment happens, we speak of disruptive
innovation.

Netflix is a very good example of disruptive innovation. The company started out by targeting a less essential
segment of Blockbuster’s audience with its relatively unpopular offer of mailing rental DVDs. They then moved
on to improve its services while keeping a low price, which appealed to and conquered Blockbuster’s main
audience completely.

4. Radical innovation

Radical innovation is the “one more thing” of our article. And for good reason, it is the creation of a brand new
product or service that nobody expected and that tends to impose itself on the life of users. Television and the
smartphone are two typical examples of radical innovations that have changed our daily lives.
Not all the results of an innovation are easily measurable. The method proposed in the Oslo manual from
OECD consists of distinguishing the result of innovative activities from the resources invested to carry them
out.

It is no longer surprising that, in large companies, the results of an innovation are assessed in terms of
accounting and financial indicators. It’s measured in profit, revenue growth, changes in share value, market
capitalization, or productivity.

Interested in trying out radical innovation? Consider the importance of two things. You need to thoroughly
understand, or even anticipate, the market. Secondly, you must be able to develop advanced solutions rapidly.
The answers to both can be found in external communities. Agorize has seen many global clients co-create
solutions based on customer insights with innovation programs. Whether you’re in IT, HR, Marketing or CSR,
you can build the innovation program that fits your needs. https://get.agorize.com/en/resources/what-are-the-
4-types-of-innovation/

What is Innovation Life Cycle?

The Innovation Life Cycle is a framework for the stages of an innovation from its inception through to adoption
and diffusion.

The Innovation Life Cycle outlines the typical stages an innovation goes through - from the initial idea
generation to development, implementation, evaluation, and adoption. This concept is closely related to
product and technology life cycles, but it encompasses all types of innovations (not just those for products or
technologies).

Stages of the innovation life cycle

At each stage in the life cycle, different tasks and stakeholders are involved depending on what is needed to
help the innovation progress.

First off, there's the idea generation stage - this is all about coming up with concepts or solutions to a specific
problem. These ideas can come from either internal and external sources, such as customers, competitors,
employees, or consultants.
Then, during development, these ideas are evaluated for feasibility to ensure they're effective at solving the
issues they set out to solve.

Once a team believes the innovation is feasible, the implementation phase can begin. This sees an innovation
take shape on a small scale (usually in the form of a new product or service released to a few people or
stores).

However, after implementation, it's important to monitor an innovation closely. There are often unexpected
problems or complications when trying something for the first time, so it's important to identify these issues
early on and and address them to maximize the chances of success.

Finally, during the diffusion stage, the innovation heads out into the wider world and is adopted on a larger
scale. At this point, users need to understand how best to use the new product, service, or technology so they
can benefit fully from it - so a company often has the role of educating its users on how something works.

Fluid, transitional, and specific stages

The stages in the life cycle outlined above can also be broken down into three broad stages: Fluid, transitional,
and specific.

In the fluid stage, an innovation is constantly changing since innovators are trying to define the opportunity and
obtain patents for it.

Once the innovation has been clearly defined, the transitional stage develops the business model of the
innovation.

Finally, in the specific stage, innovators focus on fine-tuning the production process. This minimizes costs and
decreases the development cycle time.

What to expect from the innovation life cycle

While all innovation life cycles follow the same broad path, they can differ depending on the type of innovation
being developed. Sometimes, an innovation moves through the phases quickly; other times, a concept is more
complex and requires more preparation, or needs to operate on a greater scale. These factors can result in
something moving through the life cycle more slowly.

There are also other variables that can influence how the life cycle progresses, such as as culture, regulations,
and market dynamics. For example, if a company is trying to carry out an innovation in the form of a new
software platform, it would need to consider factors like user interface design and whether technical
infrastructure meets regulatory compliance standards around the world.

Meanwhile, a firm developing a mobile app would have different considerations than a company making
software for desktop computers - user experience design is more much important in smaller devices due to
size constraints and battery limitations.

However, it's not just the stages themselves that matter - firms also need to pay attention to how activities
leading up to each stage can maximize the chances of successful outcomes. For instance, carrying out
customer segmentation prior to idea generation gives an organization a better understanding of its audience,
helping it to produce a better product and identify the best opportunities before launching.

Overall, effective management of each phase in the innovation life cycle is crucial for leading a successful
innovation with greater uptake that provides more value for organizations and individuals.
https://www.reallygoodinnovation.com/glossaries/innovation-life-cycle

The Six steps of Innovation Cycle

Innovation isn’t a one-time project. It’s a continuous activity. Which is why we are seeing numerous
organizations adding an innovation department to their company infrastructure. In fact, in a recent survey of
our client base, we were surprised to learn that almost 40% of our customers operate out of a dedicated
innovation group.

We’ve also noticed that innovation also moves through a cycle with a repeating set of activities, goals, and
outputs. That cycle includes six basic steps.

Identifying a Problem to Solve. Successful innovation programs are not only great at generating solutions,
they excel at identifying problems. Identifying problems requires that organizations take these four steps to
prepare for problem solving: gather & organize existing information, reframe and ask why, set expectations,
and identify what success looks like.

Identifying a Process that Works For You. Should I use design thinking or six sigma methodology? Having a
process for sharing, identifying and selecting great ideas is what makes innovation a repeatable (even
predictable) practice. Get an overview of the different options available to you and figure out which one works
best for both your organization, but also for this unique innovation initiative.

Engaging Others in the Process. Employee engagement, open innovation – the future of innovative thinking
requires that you reach out to the collective intelligence surrounding you. But how do you get people to share
their ideas? How do you keep them coming back to build on the ideas of others? What sorts of incentives
motivate creative participation? Every innovation push needs to include a communications plan.

Empowering Groups of People to Build Ideas into Projects. When it comes to turning great ideas into great
projects, it’s important to build teams of people that will help steward it through to completion. They need to
refine ideas, do research, find collaborators, and more.

Evaluate and Prioritize. Your organization has lots of great ideas, but you only want to move forward with the
best ones, the ones most in line with your organizational goals. How do you funnel ideas through a process
that helps you evaluate and identify the ideas that will deliver the highest ROI?

Idea Implementation. The best programs have been anticipating this step from the beginning. You’ll need to
have buy-in, organizational allies, and creativity in marshalling resources. This is the most important step, of
course, in your innovation program. If you don’t implement, then it’s not innovation.

As you can see, IdeaScale created a six video webinar series that walks innovators through each of these
steps. What other stages do you struggle with in your innovation program? Rob Hoehn is the co-founder and
CEO of IdeaScale:

Why Is Innovation Important for Business Success?

We’ve all heard the phrase “adapt or die” and for businesses to achieve success in today’s modern world, this
is a universal truth. Take, for example, the massive expansion in technological advancements in the past
decade; because of this extreme growth, businesses have been forced to adapt and expand more than ever
before.

This increasing need for growth and change also provides a great deal of opportunity for businesses.
Nearly half of Americans agree that growth in technology has been the biggest improvement to life in the past
50 years, and, as a result, companies that embrace innovation have a had sizable advantage in ultimately
meeting the demands of their customers.

Simply put, companies cannot afford to stay afloat if they do not embrace innovation and change. Here are
three critical factors on the importance of innovation in business.
 1. Innovation Helps Companies Grow

As mentioned above, if you want to grow your business in order to become more successful and profitable,
there are a few ways that you can go about achieving that goal.

Though it will be a slow path forward, you might choose to plod along your current path, growing incrementally
as you perfect your existing products and business models. Instead, you might choose to grow your business
by merging or acquiring others, which is faster, but also typically a much more expensive avenue for growth.
Or you might choose to evolve by rethinking your product or business model—or both—from the ground up,
which is a process that can lead to rapid expansion and allow you to scale your business very quickly.

This potential for growth is likely the reason that, in a recent survey conducted by The Boston Consulting
Group, 79 percent of surveyed executives claimed innovation ranked among their top three business initiatives
—the highest percentage since the survey began almost a decade ago. Furthermore, the BCG notes that
organizations consistently earning high rankings in the annual “top 50 most innovative companies” all have a
common focus on science, technology, and development. These companies continue to grow while staying
one step ahead of the competition because they value the positive impact of innovation.

2. Innovation Keeps Organizations Relevant

The world around us is constantly changing, and in order for your business to remain relevant and profitable, it
will eventually need to adapt in order to meet these new realities.

Technology continually proves to be a driving factor in the need for change. To quantify the recent impact, look
at the facts:

 90 percent of the world’s data has been created in the last couple of years.
 More than 570 new websites are created every minute.
 8 billion devices will be connected to the Internet by 2020.
These changes have led to a new age of innovation across business models and industries, allowing new
businesses to enter the market and disrupt incumbents in serious ways. In fact, executives today believe 40
percent of Fortune 500 companies will be wiped out in the coming decade due to this level of digital disruption.
Just as a start-up often innovates in order to break into an industry, established organizations need to innovate
in order to fend off competition and remain relevant in this changing environment.

3. Innovation Helps Organizations Differentiate Themselves

At the core, innovation is about doing something differently from everyone else operating in your space. If your
organization is using innovation on its products, for example, then the goal is to develop or update the products
until there is nothing else on the market like it. If your organization is using innovation on its processes, it’s
because doing so will save you time, money, or other resources, and give you a competitive advantage over
other companies stuck in their systems. In either scenario, your organization is taking the time to try something
new because sticking to the status quo simply isn’t working.

While the natural success that this brings can be reward enough for many companies, it would be a mistake to
overlook another key advantage: innovation helps an organization differentiate itself and its products from the
competition, which can be particularly powerful in an oversaturated industry or market.

While delivering value to your customers should always be a company’s main focus, doing so in a way that is
memorable and different from everyone else can become a standout element of your brand identity and
business strategy, as well.
How to Embrace Innovation

In order to drive business growth, stay relevant in changing times, and differentiate from the competition,
business leaders must be able to think creatively and embrace innovation into their business models. This
doesn’t mean that a willingness to innovate is the only ingredient for success, however: leaders must also have
a solid understanding of how to go about bringing that innovation to life.

One way to do this is by gaining experience working on exciting, challenging, and innovative projects, as doing
so will expose you to the skills needed to become an innovation driver within your organization. A master’s
degree in innovation is designed to not only help you hone these specific skill sets, but also provide you with
real-world, hands-on experiences that will make you an effective innovator.
https://graduate.northeasternuniversity.edu

Innovation is vital for a company’s survival and growth. Firms that don’t innovate fall behind their competitors
and ultimately go out of business.

However, traditional forms of innovation may result in profitable products, services, and processes – but also
harm employees or over-exploit natural resources.

Think of the capsule coffee machines which let us have café-quality coffee at home at the touch of a button.
They’re so popular that 40% of U.S. coffee drinkers own one or more. But as a result, every minute, 29,000
plastic capsules are dumped in landfill sites.

“Sustainable innovation” seeks to address those unintended social and environmental impacts. It implies that
companies can provide products and services that are good for themselves and for society in the long term.
This article explains what sustainable innovation means, why it is important, and how to practice it.

The ideas in this article are based on our work at the Innovation Learning Lab at Ivey Business School, where
we work with leading corporations and organizations in Canada on pathways to sustainable innovation.

What is Sustainable Innovation?

Sustainable innovation involves making intentional changes to a company’s products, services, or processes to
generate long-term social and environmental benefits while creating economic profits for the firm. That
definition comes from researcher Richard Adams, who reviewed academic and industry research on the topic.

Here’s how sustainable innovation works with products, services, and processes.

 Developing novel products and services. Through sustainable innovation, companies can invent and
offer novel products or services that directly contribute to achieving sustainability.
 For example: Bio-bean, a British startup and certified B Corp, developed an eco-friendly biofuel made from
coffee waste to help power London’s double-decker buses. Bio-bean also upcycles spent coffee grounds
into eco-friendly products such as coffee logs and coffee pellets—alternatives to carbon-heavy fuels such
as coal briquettes and imported wood logs[1]. Bio-bean is using a material previously considered waste,
contributing to a circular economy while generating approximately $10 million (USD) in annual revenue in
2020.
 Changing operational processes. Sustainable innovation is not only about inventing novel products or
services. Firms can also innovate sustainably while offering existing products or services when they
change their processes. Process changes can occur in many areas, e.g. design, production, marketing,
and even HR.
 For example: Fairphone, a Dutch social enterprise, offers consumers fairly-sourced smartphones. Unlike
bio-bean, which created novel products (i.e., logs and pellets made out of coffee waste), Fairphone
products do not have any new technical features.

Instead, Fairphone dramatically changed the smartphone production process to make it more responsible and
sustainable. They use recycled and responsibly mined materials and provide their workers with fair wages and
good labor conditions. Because approximately 80% of the emissions of a smartphone come from its
production, Fairphone designs their phones to last. They have a modular design which makes repairs and
upgrades easier, thereby significantly reducing e-waste.

How Sustainable Innovation Differs from Traditional Innovation

Some might wonder how these sustainable innovations differ from traditional forms of innovation. After all, both
traditional and sustainability innovation involve developing new products, services, or processes. Three core
features set sustainable innovation apart.

1. Sustainable innovations contribute to sustainable businesses. Sustainable innovation intentionally

aims to “meet the needs of present generations without compromising the needs of future generations.” It
requires businesses to actively incorporate issues such as human rights, and climate change into their
innovation processes. Companies that engage in sustainable innovation go beyond seeking immediate
profits. They think long-term, about investing in technologies and people for the future.
2. Sustainable innovations require systems thinking. When companies engage in sustainable innovation,
they do not merely focus on their own organization. Instead, they look more broadly to the whole system of
which they are part – including other companies, the natural environment, and stakeholders and
communities. They have a good understanding of how their actions affect other organizations and vice
versa.
3. Sustainable innovations must be embedded into firm’s culture. Unlike traditional innovations that are
mostly performed within a separate R&D department or unit, sustainable innovations are likely to be more
successful when they are deeply embedded in the firm’s culture. When sustainability is not part of the
corporate culture, the pursuit of short-term profits will kill sustainability-oriented creative ideas without
giving them sufficient time to mature.

Why Innovate Sustainably?

Ultimately, companies succeed when they are sustainable. First, sustainable companies attract talented
employees. Compared to their non-sustainable competitors, sustainability-oriented companies bring in better
people. In a recent Deloitte survey of millennials and Gen Zs, 49% said that their personal ethics have played a
role in their career choices.

Second, companies that consider stakeholders produce more patents and also more impactful patents,
according to research by Caroline Flammer and Aleksandra Kacperczyk. In other words, a sustainability
orientation leads to more innovation and better innovation. Firms involved in sustainable innovation think more
broadly and learn from different perspectives. They get insights and solutions from afar, e.g. from other
industries and stakeholders.

Moreover, companies that care about sustainability are also more resilient compared to their competitors:
especially important in a turbulent world. Companies with a sustainability orientation were more likely to survive
through crises, experienced less share price volatility, and generated more revenues over the long run than
those without a sustainability orientation, according to research by Natalia Ortiz-de-Mandojana and Tima
Bansal.

How Do We Make Innovation Sustainable?

Despite how wonderful it may sound, sustainable innovation does not come easy. Achieving it takes time,
commitment, and effort. So: how can firms innovate sustainably?
Sustainable innovation can be put in three broad categories: operational optimization, organizational
transformation, and systems building. Researcher Richard Adams and colleagues identified these different
categories, shown in the graphic below. They represent a continuum in terms of impact, with “systems building”
creating the greatest change.

Firms can engage in three types of sustainable innovation; Source: Adams et al. (2015)

 Operational optimization. Firms can improve their operational processes without fundamentally changing
their business model. They can find ways to “do the same things better,” and reduce their negative
environmental and social impacts (e.g., using renewable energy and reducing packaging). This can be
done relatively easily by adding environmental and social criteria to existing quality or profit criteria. This
approach is sometimes called “eco-efficiency.”
 Organizational transformation. For a greater change, companies can create disruptive new products
and services that serve societal needs and/or benefit the environment. This step goes beyond “doing less
harm” and focuses on “doing good by doing new things.” These companies also see sustainability as a
business opportunity. The sustainable innovation examples mentioned above (i.e., biofuel made out of
coffee waste, the smartphone with modular design) show how companies can engage in this kind of
sustainable innovation. In order to achieve organizational transformation, firms must radically shift their
mindset from doing things better to doing new things.
 Systems building. The most advanced form of sustainable innovation involves collaborating with others
to create positive impacts on people and the planet. Companies here see themselves as part of an
ecosystem and recognize that sustainability can’t be achieved by any single organization. They aim to “do
good by doing new things with others.” These system builders extend their thinking beyond the boundaries
of the organization to include partners in previously unrelated industries as well as marginalized actors.
 Each company will want to assess what type of sustainable innovation makes sense for it. Some
companies may move through these types sequentially. Others might engage in multiple approaches to
innovation. For example, an oil and gas company can seek efficiencies in reducing carbon emissions,
while simultaneously investing in innovations in renewable technologies that will take it out of fossil fuels.

[1] Both coffee logs and coffee pellets burn hotter (i.e., generate more energy) while producing significantly
less greenhouse gas emissions compared to traditional logs and pellets. https://nbs.net/what-is-sustainable-
innovation-and-how-to-make-innovation-sustainable

https://ourworldindata.org/social-networks-innovation-and-productivity

The importance of social networks for innovation and productivity

Social networks facilitate the diffusion of ideas across individuals and firms, and because of this, they play an
important role in productivity growth. In this post we explain how this works.
by Esteban Ortiz-Ospina November 07, 2019
Economies today are increasingly built on ideas. Consider, for example, commercial aviation. After a
flight, Southwest Airlines can unload and reload passengers to get the same airliner back in the air in about 10
minutes – this is half the time the same process took in the 1970s. As the economist John Cochrane explains,
this achievement is as much about ideas and know-how as it is about technology. Southwest Airlines, and
many other carriers after them, have been able to expand their output because they now have more efficient
protocols for ‘turning planes’ between flights.
In 2018 Paul Romer won the Nobel Prize in Economics “for integrating technological innovations into long-run
macroeconomic analysis”. Romer first fleshed out this observation in his seminal 1990 paper, titled
“Endogenous Technological Change”. At the heart of his contributions was precisely this observation: the
diffusion of ideas fosters economic and productivity growth.1

Romer’s theory of “endogenous growth” – placing ideas at the heart of economic technologies – made
economists ask entirely new questions about the drivers of growth. Where do ideas come from? How do ideas
spread?

Economists have asked these questions of the data, and their findings suggest social networks play a key role.
Friendship and professional ties matter for economic growth because people tend to develop new ideas by
interacting and learning from others who are close to them.

In a nutshell, social networks facilitate the diffusion of ideas across individuals and firms, and because of this,
they play an important role in productivity growth. Here’s how this works.

Knowledge spillovers, social networks, and patent citations

Economic theory suggests we should expect social connections to have an effect on productivity via
“knowledge spillovers”.

The basic idea is that social connections make it easier for knowledge to travel farther and faster. Knowledge
is different from many physical assets, in that it can be used by many people at the same time; so the diffusion
of knowledge creates productivity gains that spillover through society. As Thomas Jefferson once said: “He
who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper
at mine, receives light without darkening me”.2

What is the empirical value of this theory? What do ‘knowledge spillovers’ actually look like in the real world?
Do scientists and engineers really rely on social connections to disseminate their new ideas and inventions?

To answer these questions economists have looked into historical data from patents.

Patents are government licences used to register the intellectual property of new inventions, ranging from
machines to medical drugs. When a patent application is filed, inventors are required to include a list of
citations, in which they describe how their technological development builds upon the results of earlier patents.
These historical records of patent citations give us an overview of how knowledge flows – patent citations are
the ‘paper trail’ left by ideas as they travel, evolve, and make new ideas possible.

One of the first analyses of patent citations in the context of knowledge spillovers was done by Adam Jaffe,
Manuel Trajtenberg and Rebecca Henderson, in a much-cited paper published in the Quarterly Journal of
Economics in 1993.3

Jaffe and coauthors studied, in particular, the geographic distribution of citation patterns in the US.

If social connections did not matter for new ideas and growth, then we should expect that new inventions are
just as likely to cite patents from far away as they are to cite the work of their neighbours. In contrast, Jaffe and
coauthors found that new patents were disproportionately more likely to cite previous local patents. In other
words, they found that patent citations were strongly geographically concentrated. According to their estimates,
citations were three to four times as likely to come from the same state as the originating patent – this is
consistent with the idea that social connections and proximity do indeed matter for innovation.

After this initial study, several other papers have used patent citations to explore the determinants of
knowledge spillovers, with a broader perspective on ‘proximity’.

Ajay Agrawal, Devesh Kapur and John McHale used the ethnicity of researchers as a proxy for social
connectedness, and found that co-location and co-ethnicity both increase the probability of knowledge flow
between inventors. Co-location increases the probability of a knowledge flow by 24% (assuming non-co-ethnic
inventors) and co-ethnicity increases the probability by 14% (assuming non-co-located inventors). Again, these
large concentration patterns seem consistent with the idea that proximity and social networks matter for
innovation.

Disentangling geographic proximity and social interactions

The correlation between proximity and patent citations partly captures the effect that local factors may have on
innovation (e.g. geography, regulation or infrastructure around industry hubs where similar workers and firms
concentrate). However, the evidence shows that social connections matter for the transmission of knowledge
even after we control for these other factors.

In a paper published in 2018 in the Journal of Economic Perspectives, Michael Bailey, Rachel Cao, Theresa
Kuchler, Johannes Stroebel, and Arlene Wong combined patent records with Facebook data from the US, and
found that social connectedness between US counties (measured by the frequency of Facebook ties between
counties) predicts the probability of cross-county patent citations. This is true, even after accounting for the
patents’ technology class and geographic distance between counties.5

This means that the probability that an inventor builds on the work of another inventor in a different part of the
country can be partly explained by how well-connected their social backgrounds are, even after controlling for
geographic distance and other demographic factors.6

The implications of this result are of great consequence in the age of the internet. The development of new
communication-enabling technologies, such as the rise of social media, have opened new possibilities for
creating and maintaining social connections, and this is likely to have had a positive effect on the transmission
of knowledge.

Social connections and (material) well-being

Globally, the total economic output per person today is 4.4-times larger than in 1950 (even after accounting for
inflation). This was achieved over a period during which people tended towards working fewer hours. We now
produce more whilst working less.

As our interactive chart here shows, this historical achievement is underpinned by productivity growth: in many
countries, workers produce much higher output per hour today than in 1950.

This is partly because of new machines and technologies, but also because we have new shared knowledge
about how to work more efficiently.

The research on social connections and innovation suggests that one important way to improve material living
standards is to invest in digital communication technologies. This lowers the costs of creating and maintaining
personal and professional ties, which facilitates the diffusion of ideas and knowledge, creating positive
productivity spillovers.
Role of innovation in Entrepreneurship.

The process of development branding discloses the details, which helps the HR innovation leaders to learn
different ways of being more innovative. This thing is highly crucial because it is among the main drivers for
triumph.

4. Making the best of your existing products

We know that for an entrepreneur, it is important to introduce new products but more than that, to maintain the
innovation culture making the best of old products is more important.

Improvement of existing products can help a company in increasing their efficiency, profits, etc. With the help of
enhancing the design thinking process and with continuous innovative improvements, a company can attract
better staff, improving a business's health.

5. Responding to Trends and Competition

HR innovation responds to the current success and current needs and focuses on predicting future trends. With
the help of innovation in entrepreneurship, responding to future trends can help an entrepreneur's business to
come with solutions to make their business grow more.

6. Having a Unique Selling Point

Consumers generally consider innovation culture as something that adds some interesting values to its products.
Innovation in entrepreneurship can add advantages that can help the company in getting positive exposure.

7. The Use of Social Media

With social media's help in an organization's innovation campaign, one can attract a wide range of ideas using
social media. Social can be proved great for motivating, managing, and getting focused on your business.

Social media can help a business to know what are the basic needs of customers, and we can improve our
products to fulfill their demands to make our business grow progressively.

Many companies have started arriving with various unique ideas to attract customers and meet their demands.
With this thing, competition is also getting a new height, and in this era, it is not easy for an entrepreneur to
survive. For an entrepreneur, it can get difficult to survive without any innovative idea, a good team, and various
attractive deals.

To make your business survive and grow in this market, it is important to have the right skills with great knowledge
to apply innovation to your business. And this thing can only be attained when one has gone to the right institute.
Leading in the list of elite institutions is MIT ID Innovation, which offers industry-centric skills and knowledge for
students. So, if you also want to lead the world with your unique ideas, then MIT ID Innovation institute can surely
help you with this.

The Role of Innovation Entrepreneurship

Innovative entrepreneurship is crucial for identifying emerging trends and market demands, allowing
businesses to create new and appealing goods or services for their target audience. To stay relevant in a
competitive landscape, businesses must continue to innovate by developing innovative products, services, and
evolving their brand. Innovation plays a central role in entrepreneurship as it involves the replacement or
improvement of existing offerings, enabling entrepreneurs to meet market trends and satisfy customer
demands with innovative strategies.

Here are some benefits of innovation entrepreneurship:

Benefits of Innovation Entrepreneur

Creative Development

Innovation entrepreneurship fosters creativity, design thinking, and encourages employees to tap into their
creative potential. It helps businesses adapt to market demands and trends, opening doors to new
opportunities for growth.

Reinforcing Your Brand

The process of brand development, guided by HR innovation teams, is a crucial driver of business success. It
helps businesses establish strong digital business models and reinforces their brand presence in the market.
By focusing on digital business strategies, organizations can leverage technology and digital platforms to
enhance their operations, reach wider audiences, and create unique customer experiences.

Persistent Improvement

Innovation entrepreneurship paves the way for continuous improvement within organizations. Recognizing the
importance of innovation, entrepreneurs strive to enhance their creativity and drive ongoing advancements in
their products, services, and processes.

Responding to Trends and Competition

HR innovation teams are adept at responding to current needs and positioning businesses for future market
trends. Innovation entrepreneurship equips businesses with the understanding and ability to proactively
respond to emerging trends, facilitating their growth and success.

Making the Best of Your Existing Products

Maximizing Existing Products: While introducing new products and services is important, innovative culture
also emphasizes making the most of existing offerings. Through continuous improvements and enhancements,
businesses can increase their profitability and efficiency, propelling them to greater heights. Design
thinking plays a pivotal role in this process, as it encourages a human-centered approach to problem-solving
and innovation.

Having a Unique Selling Point

Consumers recognize the value that innovation brings to products and services. Innovation entrepreneurship
adds compelling elements that differentiate businesses, offering them positive exposure and a unique selling
point.

The Use of Social Media

Leveraging social media platforms enables businesses to effectively communicate their innovation campaigns
to a wide target audience. It provides valuable insights into customer needs and preferences, helping
businesses improve their offerings to meet those demands effectively.

Traits and Tips for Innovative Entrepreneurship

Traits:

1. Patience: Recognizing that developing new business ideas takes time.

2. Proactive problem-solving: Seeking solutions to challenges using innovative approaches.
 3. Effective communication skills: Conveying ideas and networking with industry professionals.
4. Determination: Overcoming obstacles and persevering in the face of challenges.
5. Adaptability: Embracing change and incorporating evolving market trends into business plans.
Tips:

1. Create a solid financial plan to ensure stability and manage resources effectively.
2. Engage in networking to build valuable connections and partnerships.
3. Accept constructive feedback as a means for growth and improvement.
4. Leverage insights and customer feedback to continuously enhance products or services.
5. Cultivate an innovative mindset by staying curious, open-minded, and embracing creativity.
By embodying these traits and tips, aspiring entrepreneurs can foster an innovative mindset and increase their
chances of success in the dynamic business landscape.

Conclusion

Innovation and entrepreneurship are distinct yet interconnected concepts that play vital roles in the success of
businesses. Some may think they mean the same thing, but using them interchangeably is an error. While they
center around the same idea, it is important to understand their differences.

Innovation is the embodiment of creative thinking, driving the development of unique solutions and ideas. It
encompasses the introduction of technological or digital advancements that unlock new possibilities and
capabilities. Serving as the backbone of every organization, innovation is imperative for success. Businesses
that neglect to cultivate an innovative culture put themselves at risk of being outpaced by their more forward-
thinking competitors. Entrepreneurship revolves around the ability to identify and seize business opportunities,
while innovation centers on transforming those opportunities into reality.

To stay relevant in their respective industries, companies require the synergy of both entrepreneurs and
innovators. While business entrepreneurs possess the vision to make strategic decisions, it is the innovator
who possesses the expertise to effectively execute those decisions and drive towards a shared goal.

This module covers

(a) the pros and cons of internal innovation,
(b) (b) product innovation and process innovation,
(c) the basic steps in planning for innovation,
(d) (d) the technology stages and the possibilities for innovation in each stage,
(e) how to develop a climate for internal innovation.

Innovation is how firms plan and create new technology, products, or processes. It occurs internally

A. Discuss the pros and cons of internal innovation

b. Understand the product innovation and process innovation
c. Enumerate the basic steps in planning for innovation
d. Comprehend the technology stages and the possibilities for innovation in each stage

INTRODUCTION

II. PLANNING: A COMPLEX PROCESS

Planning for innovation requires that the firm address a wide range of issues.
For example:
a. The goals for innovation must be clearly delineated--3M‘s goal of 30% of revenues
from products created in the last four years is an example.
b. An environment that encourages innovation and accepts failure must be developed.
c. A plan for moving from ideation to development to market with appropriate controls must
be in place.

III. TO INNOVATE OR NOT?

That is the question that must be considered first. Benefits and drawbacks need to be
considered before plunging into innovation efforts.
a. Factors that Favor Innovation
i. Greater control of the process and outcomes
ii. Greater understanding of the technology produced and how to apply it
iii. Greater ability to potentially develop the next generation of technology
iv. Greater profit potential as a first mover (a firm that is first to market in some manner).

Competitive advantages sometimes emerge for first movers. These include:
1. Customer loyalty and brand recognition
2. Can possibly develop high switching costs (costs associated with changing from one
producer to another)

b. Factors that Discourage Innovation

i. First movers incur costs in educating the market that a follower, especially a fast follower,
can avoid and yet use to advantage.
ii. The time required for an internal development strategy is greater than purchasing the
technology.
iii. There is a greater risk of failure to develop the right product at the right time for the
marketplace.
iv. Keeping a pipeline of new products and/or processes is difficult. There is always the danger
that another firm will enter the market first.

IV. TYPES OF INNOVATION

Innovations can be classified in a number of ways.
a. Product Innovation-- For most firms, product innovations are the center of
their research and development (R&D) efforts.
i. Three types of product innovation efforts
1. Basic research—involves the creation of new knowledge. It is riskier but has the potential for
the great reward in the development of new products or ways of doing business.
2. Applied research—utilizes the knowledge developed by basic research to create new
products. The purpose of applied research is to add value to the firm and its customers.
3. Systems integration—is aimed at supporting existing business improvements in established
products or opening new markets with an existing product. This type of innovation has low risks
and rewards. However, not ―tweaking‖ products can lead to strategic disadvantage.

ii. Where to focus? Can use a strategic group map to determine what competitors are doing. A
strategic group map involves mapping competitors on important factors and determining what
those closest to the firm are doing.
Example: Recording industry in 2004 had 5 major competitors and then a group of
independents. Universal (owner of Motown and others) had the most Grammys (innovative
product) and was second in on-line accessibility—behind Sony which had been one of the
developers of that technology. Sony led in on-line accessibility but was lagging in producing
Grammy-winning music. EMI and BMG were # 2 and #3 in producing winning music.

ii. Confronting—is a process that encourages deliberate debates among employees through
such techniques as devil’s advocate or “what if” questioning. Example: what if we rewarded
people for throwing trash in appropriate receptacles rather than fine them for littering? Some
cities have experimented with putting motion sensitive playback gadgets in trash cans that have
recorded jokes or information on them. When someone throws away trash properly, they hear
the joke or message. It works.
iii. Portfolio of Skills—involves using the more creative employees to stretch beyond their
normal boundaries into a variety of areas.

b. Organization-wide Issues—there are a number of processes that are critical to the

nature of the innovation planning process. These include the following:
i. Communication—―spreading‖ the word is critical. Knowledge is the lifeblood of
innovation and may channels need to be opened to encourage sharing and using of the
knowledge resources.
ii. Reward systems—Managers who want employees to be innovative must reward behaviors
that lead to innovation. To often firms reward A when they want B.
iii. Organizational assumptions—need to be monitored to be sure they do not become
counter-productive because of changes in the environment.

c. Political Processes—Innovation is political in nature. Politics in the organization

are neither positive nor negative because they exist. Politics can help or hurt the
innovation process depending on how they are used.

VIII. TECHNOLOGY STAGES AND PLANNING

As technology matures, the planning issues for utilizing and benefiting from the technology
change. The stages and strategic actions are:
a. Start-up—R&D; New product and market development
b. Growth—New product and market development
c. Maturity—Restructuring; Market expansion
d. Decline—Reengineering—looking for renewal; Value destruction

IX. DEVELOPING A CLIMATE FOR INNOVATION

A number of myths that conflict with the reality of innovation and innovation processes exist.
These must be considered in the planning process.

X. MANAGERIAL GUIDELINES
To develop the right climate for success in innovation activities, managers should:
a. Recognize innovative individuals exist throughout the organization.
b. More ideas flowing through the organization increase the chances of organizational breakthrough.
c. Periodically reconsider how work is being accomplished.
d. Encourage ―turning the prism‖ to put a new light on problems.
e. Ask employees what their biggest aggravations are.
f. Train people to recognize their creative abilities and participate in the innovation process.
Creativity is like height and weight—everybody has some.

CRITERIA
EXCELLENT 9-10 GOOD 7-8 SATISFACTORY 5-6 MARGINAL PASS 4 FAIL 0-3

KNOWLEDGE
 Demonstrates an understanding of the case and applies concepts appropriately to the study at hand
 Demonstrates thorough knowledge and understanding of key concepts and characteristics in developing
possible solutions
 Demonstrates sufficient knowledge and understanding of key concepts and characteristics in developing
possible solutions.
 Demonstrates some knowledge and understanding of key concepts and characteristics in developing
possible solutions.
 Demonstrates limited knowledge and understanding of key concepts and characteristics in developing
possible solutions.
 Plagiarism or Non Submission

THINKING
 Uses critical and creative thinking skills to analyze case, develop various alternatives and make suitable
recommendations.
 Uses critical and creative thinking with a high degree of effectiveness in developing case study methods.
 Uses critical and creative thinking with a considerable degree of effectiveness in developing case study
methods.
 Uses critical and creative thinking with a moderate degree of effectiveness in developing case study
methods.
 Uses critical and creative thinking with a limited degree of effectiveness in developing case study methods.
 Plagiarism or Non Submission
.
COMMUNICATION
 Analysis and explanations are clearly written, making effective use of grammar, spelling and vocabulary.
 Summarizes and writes with a high degree of effectiveness.
 Summarizes and writes with a considerable degree of effectiveness.
 Summarizes and writes with some degree of effectiveness.
 Summarizes and writes with a limited degree of effectiveness.
 Plagiarism or Non Submission

APPLICATION
 Effectiveness of secondary research and uses appropriate case study format.
 Demonstrates research skills and relevant information with a high degree of clarity using appropriate case
study method
 Demonstrates research skills and relevant information with a considerable clarity using most of the
required case study method
 Demonstrates research skills and relevant information with some clarity using some of the required case
study method
 Demonstrates research skills and relevant information with a high degree of clarity using little or none of
the required case study method
 Plagiarism or Non Submission

References
Trott, P. (2002), “Innovation Management and New product Development”, Prentice Hall.
• Cagan, J. and Vogel, C.M. (2002), “Creating Breakthrough Products: innovation from
product planning to program approval”, Prentice Hall.
• Goldenberg, J. and Mazursky, D. (2002), “Creativity in product Innovation”, Cambridge
University Press
• Mann, D. (2002), “Hands-On Systematic Innovation”, CREAX Press
• Klostermann, J.E.M. and Tukker, A. (1998), “Product Innovation and Eco-Efficiency”, Kluwer
Academic Press
• French, M. (1994), “Invention and Evolution: Design in Nature and Engineering”, Cambridge
University Press

https://www.youtube.com/watch?v=FXJUDyqobbM
On-line resources to be used if available as reference material On-line Resources
https://youtu.be/FXJUDyqobbM https://youtu.be/FF_38_ZuRbQ https://youtu.be/33JjV_NDbpY
https://youtu.be/DNUwZctwwhw https://youtu.be/_PC1qbAhKz0 https://youtu.be/wbFVNBNl7Bk
https://youtu.be/kfpERveB8kM https://youtu.be/Y6R9ps2E1oM https://youtu.be/66N5SM73AEc
https://youtu.be/1YLtkc6U3Rs https://youtu.be/Ej5niRS-h7k