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Innovation may be defined as exploiting new ideas leading to the creation of a new product, process or service. One survey identified that almost 90 percent of businesses believe that innovation is a priority for them. The importance of innovation is increasing, and increasing significantly. It has been acknowledged that innovation leads to wealth creation. Even though efficiency is essential for business success, in the long run, it cannot sustain business growth thus innovation is important for organization’s sustainability. (paggu.com, 2009).
There are two types of internal innovation: 1) Incremental Innovation is built on existing knowledge bases and provide small improvements in the current product lines. I see Lego as a company that is based on incremental innovation where the company keeps adding different designs to the basic building blocks, and 2) radical innovation provides significant technological breakthroughs and create new knowledge. I would say that Google is a company built on radical innovation. Google has been producing all kinds of radical innovations such as Google glasses to driverless cars to just announced lately, better battery.
It is not just the invention of a new idea that is important, but it is actually “bringing it to market”, putting into practice and exploiting it in a manner that leads to new products, services or systems that add value or improve quality – this is where entrepreneurship comes into play. A person with entrepreneurial-mindset values uncertainty in the marketplace and seeks to continuously identify opportunities with the potential to lead important innovations (Hitts, 2012. P.395).
So which one is more important innovation or entrepreneurship? BloombergBusinness.com debate room has a topic on this – Innovative ideas can make a splash, but entrepreneurs are more likey to create value, change the world and make profits. Pro or Con? (BloombergBusiness.com, 2012).
