It’s no surprise to hear that worldwide organisations such as OECD have identified innovation as a key strategy for growth and sustainability in the current global economic environment. http://www.oecd.org/science/inno/42983414.pdf
If so much value is placed on innovation around the world, innovation must be important! But why?
Innovation is important to the advancement of society. New and innovative products have increased the standard of living and provided people with opportunities to improve their lives. Breakthroughs in medicine and technology have had dramatic impact to individuals and communities alike.
There’s no denying the importance and inspiration of these large-scale innovations. But, it’s understandable if you’re wondering why innovation is important for organisations that aren’t saving the world every day.
Well, the importance of innovation can be condensed into 2 key areas: Efficiency & Increased Value and Competitive Advantage. Allow me to explain this for you.
Efficiency & Increased Value
Organisations need more than good products to survive; they require innovative processes and management that can drive down costs and improve productivity. Innovation not only improves productivity by allowing greater efficiencies in production but also through increasing the value of products and services that an organisation produces.
Increasing global competition and the steadily rising rate of global technological change means that competing through efficiencies delivered by structural reform and competition is no longer enough.
Innovation is one of the primary ways to differentiate your product from the competition. If you can’t compete on price, you’ll need innovative products and ideas to make your business stand our from the crowd.
Innovation has the potential to create competitive advantage by providing new technologies, products and services. Competitors that offer alternative customer solutions to your products range can erode your business. Your company must be on the lookout for new opportunities and be able to get there first.