innovation

  

Definition

The process of translating an idea or invention into a good or service that creates value or for which customers will pay.

To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products. In business, innovation often results when ideas are applied by the company in order to further satisfy the needs and expectations of the customers. In a social context, innovation helps create new methods for alliance creation, joint venturing, flexible work hours, and creation of buyers' purchasing power. Innovations are divided into two broad categories:

  1. Evolutionary innovations (continuous or dynamic evolutionary innovation) that are brought about by many incremental advances in technology or processes and
  2. revolutionary innovations (also called discontinuous innovations) which are often disruptive and new.

Innovation is synonymous with risk-taking and organizations that create revolutionary products or technologies take on the greatest risk because they create new markets.

Imitators take less risk because they will start with an innovator's product and take a more effective approach. Examples are IBM with its PC against Apple Computer, Compaq with its cheaper PC's against IBM, and Dell with its still-cheaper clones against Compaq.


Use innovation in a sentence

  • By allowing the developer of an innovation to reap the rewards of his efforts, we create an environment that encourages innovative thinking and hard work.

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  • Sofia was much happier at this workplace: they celebrated innovation and rewarded employees who came up with new ideas and better ways of doing things.

    3 people found this helpful    
  • Some people praise technology and innovation but I think we should go back to the dark ages because as a society we'd be much happier.

    6 people found this helpful    
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Notable Quotes

  • How to Be More Innovative
    "In aiming for innovation, surround yourself with those that think differently than you. Doing so will allow you more perspectives than what you would be capable of. The old adage of "Great minds may think alike" but great inventions come from multiple great minds."
    - Siam Luu
  • Innovation is an Easter Egg Hunt
    "Think about innovation as an easter egg hunt. Opportunities are more likely to lie outside the boundaries of where others typically explore, because these areas have been less exhaustively searched already."
    - Tom Murcko
  • One Perspective on Innovation
    "Most everything I've done I've copied from someone else."
    - Sam Walton
  • One Perspective on Innovating
    "It is difficult to see the picture when you are inside the frame. (stated by John Doerr and Kleiner Perkins)"
    - Kleiner Perkins

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