IMPORTANCE OF INNOVATION
SO, WHAT IS INNOVATION?
If you search the Internet you will find many different definitions from simply “new idea” to more detailed definitions such as “improvement in process, technology, product and methodology”.
The diccionary Merriam-Webster defines innovation as “introducing something new.” I would rather say that innovation is as normal as the pursuit of continuous improvement, and innovation management is the process to do so in the most efficient way possible.
Why is innovation important?
In a 2017 article, the magazine American Forbes describes in his article why innovation is so important for three key points:
- Innovation makes it easier for companies to penetrate markets and open new markets faster, especially in richer countries
- Innovation also helps develop and improve original concepts, helping innovators to be proactive and confident in taking risks and finishing things by making decisions.
- When the company has an innovative culture, it will grow more easily, although the creative process is not always easy. Tried and tested methods of managing innovation can be very helpful, but trying new things can often pay off.
Further, Booz & Co. (Strategy &) Informe Global Innovation 1000 2011 has discovered a difference both in annual revenue growth (+ 11%) and in EBITDA (+ 22%) in favor of the most innovative organizations.
Companies on the importance of innovation
“Tech pro research” interviewed 353 companies from all segments, the key question was obvious: How important is innovation for your company? The answers were almost universal. Next image shows that 71% think that innovation is “Very important” and another 21% that it is important. Only 7% of companies do not give much importance to innovation.
The interviewees were from all business areas, there are technology companies, other education companies and even government agencies. It seems that the importance of innovation according to companies does not depend on the industry.
We have many similar studies, and the results are always very similar. Here are some examples, each independent of the other:
According to McKinsey, 80% of executives think their current business models are at risk in the near future. Additionally, 84% of executives say that innovation is an important part of their growth strategy.
The Accenture 2015 US Innovation Survey tells a very similar story. 84% of executives consider their future success to depend heavily on innovation.
Since 2010 a McKinsey global report revealed that only 4% of executives had not defined innovation as a priority strategy, and that they have no plans to define it as such in the future. (McKinsey Global Survey)
Apart from the fact that all companies are committed to innovation, development and the pace of change in the world is accelerating. Every day we have to be able to face changes faster if we want to stay ahead.
If you are interested in reading more about the change in rhythm, you can read on Wikipedia about “Accelerated change”.