According to Business Dictionary, innovation is defined as, “the development and subsequent creation of something new, usually of an improvement to something existing”. It is not just about developing something innovative and original, it is also about taking what is already there and making it better. So basically it means “improvement of an existing thing”. But what do we mean when we say that an innovation is, “improving upon an existing thing”?
Ideas come from somewhere. These ideas can be inspiration, abstract thoughts, out of a market, scientific breakthroughs, innovative processes, new ways of doing things, etc. In each of these cases there may be processes that have been developed over years that are not well understood, which are now being applied in a fresh new way. These processes are called innovation processes.
Innovation Processes are often visible in the way products are designed and marketed. A good example is the automobile. One could think of all the changes that took place over the years to the internal combustion engine. Each manufacturer experimented with fuel-efficiency, power-to-weight ratios, engines that worked better and so on. The result was a highly competitive market where cars were first produced using gasoline, and later on diesel.
The other example is farming. A farmer might come up with a better way to grow his crops, find a way to protect his livestock, find a better way to harvest his produce, or discover a way to breed his animals more efficiently. All these innovations are innovations. They are the result of a process of innovation. There are many different forms of entrepreneurship, business models, and product innovations.
Innovation can occur in many forms. Many business models to embrace innovation as a way to create a competitive edge. An example of this is a startup company that looks to improve on the existing business model. This can be risky because it requires a lot of risk in the form of a lot of investment. If it succeeds, the company could gain a lot of customers and business revenue.
On the other hand, a traditional business model often involves innovating new processes for producing and marketing a product. Examples include the production of cars and airplanes. People often notice that these processes are new. It often gets expensive to change the existing process. Therefore, in the early stages it makes sense to invest relatively less capital for the sake of establishing a unique product. This allows the company to focus on establishing the product innovations that yield the maximum return on the initial investment.
There are many examples of business models that are based on innovation. For instance, Nike has developed many innovative products including sports shoes. Apple is notorious for coming up with innovative products such as the iPhone. Toyota came up with an innovative vehicle design. All of these innovators have been able to establish their place in the industry based on product innovation.
All these examples highlight the fact that innovation takes time and a long term perspective. If you want to see radical new technology being introduced, then you need to wait for the appropriate times. Innovation should be viewed as a process that allows companies to develop highly flexible product innovations. In addition to waiting for an ideal innovation opportunity, you can also take advantage of an appropriate funding strategy and make a radical innovation happen for you.
Funding innovation can be done through a series of different forms. Innovation can be funded by increasing the demand for the product line. Innovation can also be financed by tapping the financial market to provide startup capital or venture capital. This way, the innovative products will be launched into the market at a significantly low price. Innovation can also be funded by creating a joint venture with another company. A company can form a strategic alliance with another organization to exchange technology and the services that both companies offer.
The other method that can be used to finance innovative ideas is through IPOs. IPOs allow a company to sell its shares in a company to raise a significant amount of money. Companies that are selling part of their shares in the company can choose to do so as a private company or public limited company. These companies have the ability to set their own pricing and determine the number of shares that will be sold during the IPO offering.
Innovation can be a slow and somewhat step-by-step process depending on what kind of system we are working with. Innovation can occur when a company finds a new product that is superior and implements it into the market. This new product can come from a different innovative process or idea. Innovation can also happen when a company improves on an existing product that is already in the market. This process innovation can be risky, depending on the market uncertainty, but it can be very rewarding if the market uncertainty is minimal.