Innovation
is the process of creating and implementing a new idea. It is the
process of taking useful ideas and converting them into useful products;
services or processes or methods of operation. These useful ideas are
the result of creativity, which is the prerequisite for innovation.
Creativity in the ability to combine ideas in a unique way or to make
useful association among ideas. Creativity provides new ideas for
quality improvement in organizations and innovation puts these ideas
into action.
Change and
innovation are closely related, even though they are not the same.
Change often involves new and better ideas. The new idea may be the
creation of a new product or process or it can be an idea about how to
change completely the way business is carried out. Successful
organisations understand that both innovation and change are required to
satisfy their most important stake holders.
Strategic Importance of Innovation:
For
both established organisations as well as new organisations, innovation
and change become important in a dynamic, changing environment. When a
company fails to innovate and change as needed, its customers, employees
and the community at large can all suffer. The ability to manage
innovation and change is an essential part of a manager’s competencies.
Types of Innovation:
Three basic types of innovation are:
(i) Technical,
(ii) Process and
(iii) Administrative.
Technical
innovation involves creation of new goods and services. Many technical
innovations occur through research and development efforts intended to
satisfy demanding customers who are always seeking, new, better, faster
and/or cheaper products.
Process innovation involves creating a new way of producing, selling or distributing an existing good or service.
Administrative
innovation occurs when creation of a new organisation design better
supports the creation, production and delivery of goods and services.
The
various types of innovation often go hand in hand. For example, the
rapid development of business to business e-commerce represents process
innovation. But this new process requires many technical innovations in
computer hardware and software. Also as firms began to use business to
business e-commerce, administrative innovation soon followed. Further,
implementation of process innovations necessitated organisational
change. “Doing something new means doing something differently”. Thus,
innovation and organisational change go hand in hand.
Technology and Innovation:
Technology
is defined as the systematic application of scientific knowledge to a
new product, process or service. It is also defined as the methods,
processes, systems, and skills used to transform resources into
products. Technology is embedded in every product, service, process and
procedure used or produced.
Innovation is a change in
technology. When we find a better product, process or procedure to do
our task, we have an innovation. Process innovations are changes which
affect the methods of producing outputs. For example, manufacturing
practices such as just-in-time, mass customerisation, simultaneous or concurrent engineering – are all innovations.
In
contrast, product innovations are changes in the actual outputs
themselves. Technological innovation is daunting in its complexity and
pace of change. It is vital for a firm’s competitive advantage because
today’s customers often demand products that are yet to be designed. As
technologies develop, product obsolescence increases and innovative
products will have to be introduced into the markets.
Managing
technology requires that managers understand how technologies emerge,
develop and affect the ways organisations compete and the way people
work. Technology can greatly affect an organisation’s competitiveness
and managers have to integrate technology into their organisation’s
competitive strategy. Managers need to assess the technological needs of
their organisations and the means by which these needs can be met.
Understanding
the forces driving technological development and the patterns they
follow can help a manager anticipate, monitor and manage technology more
effectively.
i. First, there must be a need or demand for the
technology. The need acts as a driving force for technological
innovation to occur.
ii. Second, it must be theoretically possible to meet the need using the knowledge available from basic science.
iii. Third, it must be possible to convert the scientific knowledge into practice in both engineering and economic terms.
iv.
Fourth, the necessary resources such as finance, skilled labour, time,
space and other resources must be available to develop the technology.
v. Finally entrepreneurial initiative is needed to identify and put all the elements together.
The diffusion of technological innovations:
For successful diffusion of a new technology over a period of time it should have the following attributes:
(i) Great advantage over its predecessor.
(ii) Compatible with existing systems, procedures, infrastructures and ways of thinking.
(iii) Has lesser complexity than its predecessor.
BY Alphonce Bhoke BAPRM 42527
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