Innovació

1. Types of innovation

1. Product innovation
2. Process innovation:
3. Organizational innovation:
4. Commercial innovation:

2. Innovation and innovative businesses

Types of innovation

Entrepreneurial innovation underlines the necessity to continually reinvent the business. It is therefore a process; a process that relates and interacts with the different areas as for example, marketing, sales, design, Research and Development, management and human resources.

The innovative process is defined according to those tasks related to doing something different or something established in a different way. Whatever type of innovation is being considered, its original purpose cannot be ignored: satisfy an unsatisfied necessity. In other words, any innovation has to cater to a market.

The Oslo Manual (OCDE, 3rd edition 2005) defines four types of innovation that include a wide range of business activities. They are:

• Product innovation. This implies significant changes in the characteristics of a product or service. Along this line we can distinguish two additional subdivisions:

1. Breaking innovation: With this sub-type, new products or services are created that are not a natural evolution of existing products or services. This kind of innovation breaks with the traditional patterns of consume, doting the company with an important competitive advantage.
2. Incremental innovation: This kind of innovation consists in orchestrating small changes within the business which are intended to better or increase aspects of the product or service. This is the most common type of innovation among consolidated companies.

• Process innovation: To innovate within the process, a company usually introduces significant changes in the methods of production and/or distribution. This type of innovation is often associated with a reduction in cost of production, a reduction in time-to-market, an increase in the quality and an increase in flexibility. The degree of innovation depends on the sector in which the company generates business.

• Organizational innovation: This refers to the putting into practice of new work policies within the company but also concerns external players. Organizational innovation affects the form of management and organization in productive and administrative areas as well as in the human resources department. This type of innovations seeks to increase know how and to make the most of resources whether they be internal or external.

•Commercial innovation: This type of innovation deals with the processes or methods of commercialization of a product or service. It can be appreciated in the way a product or service is offered that is completely different from the conventional methods using new systems of promotion, new channels of distribution, new policies about fixing prices, et cetera.

Special mention should be made of technological innovation. This refers to all innovations that are the result of the introduction of new technology as a means of favouring the business. Generally innovation is associated with research and development activities and the incorporation of technologies, above all those that make reference to TIC and other computer related elements. When innovation is produced thanks to the industrial application of scientific know how, we are talking about technological innovation.

Technology has an important part in the majority of innovative projects. We cannot loose sight of the fact that in all areas of a business innovation can be realized by the incorporation and management of technology.

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Innovation and innovative businesses.

Innovation is something that all kinds of businesses have access to, whether they be new companies or consolidated ones. Innovation is not an end within itself, but rather the means to achieve a more competitive position in the market through differentiation.

However, innovation does not tend to materialize in a flash of brilliance. It is a process that demands effort and hard work. This process begins with search and development of an opportunity. Professor Howard Stevenson (1985) of the University of Harvard defines initiative as “the persecution of an opportunity beyond the resources that can be controlled at that moment.” Initiative is not something inherent in a company, but in the people that make up its staff. A person with initiative is a persona with entrepreneurial capacity.

There exists a strong relationship between the concepts of innovation and initiative: the effort required to propel an initiative is associated with innovation and innovation requires initiative to get to the market. The entrepreneurial and innovative capacities have many points in common; the creation of something new, acceptation of risks and understanding of the economic impact.

The current reality is that most market-impacting innovations are fruit of emerging companies. These companies, most of the time, have not invented anything new, but rather have innovated by combining existing technologies in a new way, to reach new markets or to add value for their existing clients. In this way they have created solutions and built projects with winning elements that have had a positive influence on the market.

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