Innovation is crucial for growth
Growing and Improving Business
By definition, “to innovate” means to make a change to something that is existing by adding new methods, ideas, or products. Arguably the most important reasons behind building innovative capability within business is that it is crucial to enable and maintain growth. It is also critical to remaining competitive in a modern fast changing market that is so common in today’s world, even more so due to the implications of Covid-19. Innovation comes in many shapes and forms and when applied in the right ways can results in added value across many areas of a business.
However, studies and surveys such as the McKinsey Global Innovation Survey show that while 84% of executives deem innovation as critical for success fewer than 6% of them are actually satisfied with their innovation performance. What we may be seeing here is a misunderstanding of innovation or a missing link of how to truly think of innovation beyond the basics.
Innovation does not only mean the creation of new and exciting breakthrough products and services that allow us to enter new markets. Innovation can also enable greater value in existing products and services that are offered resulting in increased performance and desirability for the end user or market. Behind the scenes we see innovation playing a crucial role in continuously improving existing business practices as well as being used to create new and better models.
Innovation creates uniqueness
A key result of innovative practice in a firm is often added value to products, business operations or the company itself. When innovation is utilized correctly, it can benefit the firm commercially by providing a uniqueness or point of difference in a rapidly shifting market. Innovation can bring new services and products that will afford a more positive user experience as well as allow users to realize new or renewed value in existing product lines and services. An important consideration should be to use innovation to differentiate the value offering when a competitive market may have many lower cost alternatives available to the end user. This is where we see innovation strategies as vital for breaking new products, services, and pricing models out of markets that are dominated by traditional key competitors.
Rapid market response
By having strong innovation fundamentals and technological capabilities in-house allows for a fast response to shifts in market needs. An example of this can be seen in the approach of many small brewery and distilleries around the world during the Covid-19 pandemic.
With the surge in demand for ethanol-based hand sanitizer, supply disruptions saw many areas without. Many small breweries were faced with possibly shutting due to forced government lockdowns but were able to remain operational by producing hand sanitiser product. The ability to rapidly shift production meant local supply shortages were alleviated and businesses were able to keep running. Covid-19 has shown us many ways in which innovation in small business’ especially allows for rapid responses to fast changing conditions within a market.
The key to unlocking innovative potential
Having a clear and well-defined innovation strategy is arguably one of the best tools a firm can have to improve their innovative performance. By having a clear strategy, a firm can see better how their eliciting capabilities can add value to their products and services as well as improving business functions. It can also allow for the identification of gaps that can be met with the adoption of new technology and methods.
Help where you need it
Understanding how to apply innovation can be challenging, but we are here to help. Through the Advanced Manufacturing Center, Fraunhofer Project Center (FPC) aims to accelerate innovation across manufacturing. This is with the aim to drive growth and give your company, team, or product the competitive advantage you need.
Working with University of Twente, FPC would transfer key research findings and learnings into industrial applications that stimulate economic growth. Manufacturers will have access to knowledge to demonstrate where they can realize their creativity or innovation into a physical test product.