Innovation

By /

Innovation . Change that introduces new features, and that refers to modifying existing elements in order to improve or renew them. In colloquial and general use, the concept is used specifically in the sense of new proposals, new inventions and their economic-social implementations.

Summary

[ hide ]

  • 1 Etymology
  • 2 Background
  • 3 Innovation
  • 4 Ingredients of innovation
  • 5 Impact
    • 1 Diffusion of Innovation
    • 2 Technology transfer
  • 6 New
  • 7 Types of Innovation
    • 1 Purpose
      • 1.1 New
      • 1.2 Enhanced
    • 2 Innovation by the transformative scope in the technical aspect
      • 2.1 Classification of innovation according to different parameters
        • 2.1.1 Incremental innovation
        • 2.1.2 Radical innovation
      • 8 Results of Innovation
      • 9 Government and innovation
      • 10 Innovation in Cuba
        • 1 Science and Technological Innovation System
      • 11 Bibliography
      • 12 References
      • 13 Sources

Etymology

The word comes from the Latin innovatĭo, -ōnis which in turn is derived from the term innovo, -are “make new”, “renew”, which is formed with in- “in” and novus “new” and is defined as the ability to introduce novelties in a specific field of human knowledge that generates social benefit [1] [2] .

Background

In the world, important transformations have occurred in the functioning of the economy and society. The globalization process driven by scientific and technological advances, the large-scale action of powerful transnational corporations, the financial, economic and environmental crisis and the rise of neoliberalism, qualify the actions of countries and international economic organizations.

The assimilation and generation of innovation is one of the factors that, significantly, have contributed to promoting change at the company level, thereby achieving benefits in the economy and in society as a whole, which suggests a dynamic oriented fostering innovation capacity in a systematic way, since organizations that incorporate innovation into their processes and adopt an open attitude to change better position themselves in the market, increase their efficiency and productivity, as well as the benefits to development.

Although innovation and its typology have been widely studied, they coincide in two aspects: novelty and application. In this way, an invention or creative idea does not become innovation until it is used to meet a specific need. This application of the idea involves a process of change that could be considered microeconomic.

However, change also has an important macroeconomic component, since the main objective is to convert individual business improvements into improvements for society, and for this the diffusion of innovation is essential.

Cuban studies on the subject propose [3] :

“Change can occur through innovations that occur for the first time in society, or through innovations that have emerged in another environment and are assimilated into their practices for the first time”

This is the reason why there is a double point of view when identifying and evaluating innovations:

  • Those that are new to society
  • Those that are new to the organization that makes them

Although the former have more merit and bring greater benefits, the latter also require some effort, due to the degree of uncertainty they impose on the organization, and also provide important benefits. Therefore, it is necessary to continuously review innovations introduced in other contexts to adapt them depending on the level of uncertainty that the organization is capable of accepting.

It is no longer enough to innovate in new or improved products and services, it is important to see what is the value, the contribution in benefits or benefits, that these products or services bring to consumers, and based on this objective define innovative strategies, the Company and society culture must be innovative enough to generate experiences, create relationships, retain customers and suppliers, design products and services so that their consumers feel unique, and this is innovating in value.

Innovation

For policy makers, at the macro level, innovation is a strategic concept that must be incorporated into the culture of society, and at the micro level, for the managers of organizations and for citizens, innovation becomes a master key, to generate value, more effectively due to its link with the decrease in costs, the increase in productivity, the possibility of substituting imports and increasing export capacity.

In the definitions of innovation used by various authors, a common concept is appreciated, “a new idea made reality or put into practice; it is converting ideas into new or improved products, processes or services that the market values ​​and therefore generates new profits to the company and benefits to society “.

Innovation thus defined does not only refer to certain technical equipment. It is also present in organizational, leadership, financial and commercial matters and the talent and ability of human capital. In either case, innovation involves “the systematic and intentional action of introducing novelty or change in what is done and for what is done.”

Joseph Alois Schumpeter ( 1934 ), in the book The Theory of Economic Development , defined it as:

“a process of creative destruction -through which new technologies replace old ones-, which allows the economy and economic agents to evolve; it is the way in which the company manages its resources over time and develops competencies that influence in their competitiveness ” [4]

Despite this concept, Schumpeter [5] commented that in terms of innovators (businessmen or “entrepreneurs”):

“… is the discovery that belongs to scientific or technical knowledge. Act of intellectual creativity, without importance for economic analysis … ”

It has argued that:

“… Applying any enhancement is a completely different task from your invention and requires different skills. Although entrepreneurs can be inventors, they would be by coincidence and not by nature ”…

“… innovation consists not only in new products and processes, but also in new forms of organization, new markets and new sources of raw materials” …

In 1992, Rothwell defined innovation as:

“… a process that includes the technique, design, manufacturing, and the commercial and management activities involved in selling a new product or using a new manufacturing or equipment process …”.

That is to say:

  • A new idea derived from the most updated knowledge
  • The result of the brightest scientific research
  • The most ingenious product or process technology
  • The most insightful organizational solution
  • The boldest marketing method that brings tangible benefits to the organization or society.

It cannot be considered innovation as long as it does not have an expression:

  • Practice: be applied
  • Concrete: solve a specific problem
  • Reasonable: they are economically viable
  • Sustainable: they can be maintained over time that brings tangible benefits to the organization or society

It does not only refer to certain technical equipment. It is also present in questions of type:

  • Organizational
  • Of leadership
  • Financial and commercial
  • Of the talent and ability of human capital.

Innovation involves the systematic and intentional action of introducing novelty or change in what is done and for what is done, is the introduction of new combinations of productive factors.

It is an intentional breakdown of the productive balance, based on new techniques that make it possible to leap and place the company in a better competitive situation.

It presupposes “the disturbance of existing structures and unceasing novelty and change.”

For Peter Drucker :

“systematic innovation consists of the search, organized and with an objective, for changes and the systematic analysis of the opportunities that they can offer for social or economic innovation”

Based on these concepts, the Organization for Economic Co-operation and Development (OECD) described in the Manual of Oslo in 2005 (. 3rd Edition) innovation as:

“Activity that takes place in the field of the production of goods and services, technological and productive processes, organization methods and marketing methods. For an innovation to be considered carried out in any of the aforementioned areas, it must meet two conditions: having been introduced and that the product, process, organization method or marketing method introduced be new or significantly improved with respect to the company, the economic activity, the national market or the international market ” [6 ]

Gustavo Lugones , interprets what was stated in the Oslo Manual:

“… innovation is the introduction to the market of a new or significantly improved product or process or the development of new organization and marketing techniques …”

Innovation is the combination of needs and market demands; it is the integration of new and existing knowledge; and the creation of new or improved products, systems or services.

It is transformative, it is a process that aims to change the inertial state of many components of the company. It requires developing creative capacity and demands a change in mentality, updated knowledge and making decisions regarding investing time and resources. It must create useful value for the organization itself, its customers and society.

Decree 281 [7] highlights the transformative nature of innovation, stating that it must create useful value for the organization itself, its clients and society, and that it is a process that aims to change the inertial state. of many components of the companies, for which it is required to develop the creative capacity and demand a change of mentality, updated knowledge and make decisions regarding investment of time and resources.

The Oslo Manual, in its 3rd. Edition states that innovation involves the use of new knowledge or a new use or a combination of existing knowledge:

  • The new knowledge may have been generated by the innovative company in the course of its innovation activities (that is, with internal R&D)
  • The new knowledge may have been acquired externally through certain channels (i.e., buying the new technology)

In both cases, the use of new knowledge or a combination of existing knowledge requires innovative efforts by the company that can be differentiated from the usual routines.

The following are recognized as innovations:

  1. a) Recognized and applied inventions.
  2. b) Results of research, technological development and innovation projects when applied.
  3. c) Technology transfers when they are assimilated, adapted and put into operation.
  4. d) Technological, organizational and management improvements that achieve their application, in productive entities and communities.

Other ideas and methods of practical realization that contribute to adding value to products and processes, and to the development of the standard of living of society, as a consequence of the application of knowledge and skills that lead to lasting changes and guarantee competitive advantages, increases in efficiency, raising the standard of living and continuous improvement of productive and scientific organizations, as well as of human groups.

Ingredients of innovation

To innovate you need knowledge and creativity, according to the following relationship:

Where:

K = knowledge

C = creativity

I = innovation

X = acceptance in the market or society

Y = solution of a social or economic problem

Hence it is interpreted that the sum of knowledge and creativity will give an innovation as long as it is successful in the market and / or solves a social problem. This equation helps to reflect and problematize the simplicity and complexity of innovation and identify the dimensions necessary to obtain the innovation, but it also includes organizations, their managers and the work itself.

Its main variables are:

  • Knowledge: Knowledge is held by men and women. The organization and society to innovate go out to manage new knowledge, obviously after evaluation and determination of the knowledge itself (endogenous knowledge and exogenous knowledge) that allows it to develop new products, services, processes, or organizational forms.
  • Creativity: Creativity means looking for new and better ways of doing things, for the benefit of the organization and society. Knowledge is not enough, creative ideas are essential. Creativity and therefore the emergence of creative ideas can be encouraged, insofar as the systemic thinking of the members of the organization is integrated, spontaneity is fostered and spaces for creativity and debate on institutional and social performance are generated.
  • Individual creativity: If creative demand is indeed a challenge, it must be internalized to promote the incubation of ideas. Then these can arise at any time, whether or not you are working on the problem. In an organization there are creative individuals by nature, personal creativity constitutes a satisfactory channeling of our psychic energy and therefore contributes to our happiness and personal fulfillment.
  • Organizational creativity: In today’s competitive environment, creativity is no longer an option. Organizations that understand how to foster the creativity of their people to achieve results and are willing to implement new ideas will be the winners. Undoubtedly, companies are becoming aware of the importance of their intellectual capital, although there is still a long way to go in terms of promoting ideas for innovation, companies and other institutions also require creativity to achieve new goals and better exploit their advantages.
  • Creativity and teamwork: The truth is that innovation requires the right combination of individual work and teamwork; Or, to put it another way, working on the job and working in a meeting. The dose obviously depends on the type of creative challenge and the stage of the creative and innovative process: identification of the problem, incubation of the ideas-solutions, appearance and formulation of these, evaluation and implementation.

Impact

The main impact of innovation on economic activity comes from the diffusion of initial innovations to other companies. This diffusion is captured by companies by introducing innovations that are new to them.

Diffusion of Innovation

Diffusion plays a fundamental role in innovation processes. In this regard, the Oslo Manual states [8] :

“The central element of innovation is the diffusion of all new knowledge and all new technology …”

“… the diffusion process involves much more than the mere adoption of knowledge and technology, since the companies that adopt them improve their knowledge and use it as the basis for the development of new knowledge and technologies …”

“… diffusion theories (for example, Hall, 2005) focus on the factors that affect companies’ decisions to adopt new technologies, their access to new knowledge and their ability to assimilate them …”

Technology transfer

Process of transmission of scientific, technological information, knowledge, media and exploitation rights, to third parties for the manufacture of a product, development of a process or the provision of a service, contributing to the development of their capabilities [9] .

Novelty

The concept of who develops the innovation is also linked to novelty and diffusion and determines whether innovations are mainly developed within the company itself, or in cooperation with other companies or with public research establishments, or if they are mainly developed Outside the company.

By definition, every innovation must include an element of novelty. The concept of novelty is configured in three ways:

  • New to the company
  • New to the market
  • New to the whole world

Types of Innovation

Organizations and institutions incorporate innovation in different ways, they can do it to obtain a higher quality in the products or services it generates, decrease costs, substitute imports, increase productivity, offer a greater range or design of products or services, new ways distribution and marketing, improve organizational and structural methods, raise the quality of material and spiritual life of the population.

Innovation is a continuous process. Companies continuously make changes to products, processes and capture new knowledge, among others.

A company can make numerous changes in its working methods, in the use of production factors and in its types of products to improve its productivity and / or its commercial performance.

Innovation can be classified according to:

  • Your Object
  • Because of the transformative scope in the technical aspect

Object

Taking into account its application or nature.

  • Product Innovation(Good or Service)

It is the introduction of a new good or service or one with a high degree of improvement, that is, significantly improved in terms of its characteristics or its desired use, that is, to which it is intended.

This definition includes significant improvements in technical specifications or characteristics, of components and materials, of integrated computing (embedded software), of ease of use, ergonomics or other functional characteristics.

Product innovations:

  • They can use new knowledge or technologies.
  • Build on new uses or combinations of existing knowledge or technologies.

New

  • Technological characteristics or intended uses differ significantly from others.
  • They can involve radical new technologies, based on new technological uses, or they can be derived from the use of new knowledge

Enhanced

  • Significantly improved or updated
  • It can be in terms of lower costs or better performance with the use of high performance components or materials

Design is an integral part of the development and introduction of product innovations.

However, design modifications that do not introduce a significant change in the functional characteristics or intended uses of a product are not product innovations; however, they may constitute marketing innovations

  • Process Innovation

It is the introduction of a new process (method), or significantly improved (with a high degree of improvement), of production or distribution.

It involves significant changes (major improvements) in techniques, materials, equipment and / or computer programs (software).

They are significant changes in production and distribution methods.

Process innovations can aim to:

  • Decrease unit costs of production or distribution
  • Improve quality
  • Produce or distribute new or significantly improved products

Production methods include techniques, equipment, and computer programs used to produce goods or services

Examples of new production methods:

  • The introduction of new automated equipment in a manufacturing chain.
  • The installation of a computer aided design for the development of a product.

The distribution methods are linked to the logistics of the company and include the equipment, the software and the techniques for:

  • The supply of inputs
  • The allocation of supplies within the company
  • The distribution of final products

Example of a new distribution method:

  • The application of a traceability system for merchandise by barcode labels or a radio frequency identification chip (RFID).

Process innovations include new, or significantly improved, service creation and delivery methods.

They may involve the introduction of significant changes in the equipment and computer programs used by service providers or in the procedures or techniques used to provide these services.

Examples:

  • GPS tracking devices for transportation services
  • The introduction of a new reservation system in a travel agency
  • The development of new project management techniques in a consulting company.

Product innovations and process innovations are closely linked to the concepts of product technological innovation and process technological innovation [10] .

  • Organizational or Organizational Innovation

It is the introduction of a new organizational method in:

  • Business practices: new methods to organize work management routines and procedures: new practices to improve learning and the distribution of knowledge in the company; training activities; production or supply operations management systems, including quality management systems.
  • The organization of the workplace: new methods of attribution of responsibilities and decision-making power among workers for the division of labor; new structuring concepts, in particular, the integration of different activities.
  • The company’s external relations: new ways of organizing relations with other companies or public institutions; new forms of collaboration with research organizations or clients (open innovation); new methods of integration with suppliers; outsourcing or subcontracting, for the first time, of company activities (production, purchasing, distribution, etc.)

It may aim to improve the results of a company:

  • Reducing administrative or transaction costs
  • Improving the level of job satisfaction (and therefore increasing productivity)
  • Facilitating access to non-traded goods (such as non-cataloged external knowledge)
  • Lowering supply costs

They distinguish it:

  • The introduction of an organizational method (in company practices, workplace organization or external relations)
  • That has not been used before by the company
  • That results from strategic decisions made by management

Open innovation is conceived as a process, in which internal and external actors have a similar role. Based on experimentation and collaboration between companies, universities, the public sector and, of course, users [11] .

It is a structure where new products come from different contexts, which can become part of the innovation process at all points in the chain until reaching the final product.

This innovation affirms the importance of obtaining information from the environment, not only from secondary sources such as reports, reports, among others, but must also obtain primary information, from customers, competitors, allies or experts.

This reinforces the need for coordinated and also collaborative actions to bring innovations that can significantly influence levels of competitiveness to a safe harbor.

Open innovation:

  • It proposes a new innovation strategy through which companies go beyond their limits and develop cooperation with external organizations or professionals.
  • It allows to combine the internal knowledge of the company with the external one to carry out the strategy and R&D projects.
  • Universities and research centers take on special relevance within the ecosystem of agents with which the organization is related, so there is a better use of collective intelligence.
  • Projects can originate both inside and outside the company, can be incorporated both at the beginning and in intermediate stages of the innovation process, and can reach the market through the same company or through other companies (patent license, technology transfer , etc.)

With this type of collaboration with Universities, companies can obtain great opportunities:

  • It is the best way to recruit and hire your researchers and enables you to keep up to date with international scientific developments.
  • It allows the use of specialized equipment and scientific instruments at a reduced cost.
  • The basic research developed in universities and research centers complements the applied research developed in companies.
  • The development of cooperation projects provides experience to the researchers of the company in the field of project management.

In general, it allows the company to capture innovative solutions and ideas that would have been difficult for them to develop on their own; incorporate innovations from external organizations (technology companies and research centers) and facilitate the commercialization of the innovations achieved

The updating of the Cuban economic-social model takes into account the need for open innovation, starting from:

“Innovation is carried out through complex interrelationships characterized by constant inter-institutional negotiations and feedback” [12]

That is why the strengthening of the integration and rationality of the Science, Technology and Innovation System is proposed , where the role of each and every one of the actors or agents that intervene in it is defined, in the new conditions that economic development poses. and social of the country, converging the new approaches analyzed with the recognition of “knowledge as an inclusive critical resource” and the “political dimension in the processes of innovation and appropriation of its results”.

In this sense, the Cuban approach states that organizational innovations include ” [13] :

  • The practical effect of changing attitude and aptitude in the management activity of companies.
  • They are reflected in multiple ways:
    • reduction of hierarchical levels
    • problem solving through work teams with broad participation of workers
    • formalization of the quality system and its endorsement, certification by the ISO standard
    • training programs
    • creation of new positions
    • empower directors of grassroots business units and heads of socialist labor brigades
    • create supplier evaluation system, computerized management system, among others.

It is also pointed out that they are those referring to changes or improvements in the direction and organization under which the productive, commercial, economic, financial and human capital activity is carried out, as well as in the development and behavior of citizens in society.

They are a type of innovation that enables greater access to knowledge and the use of material, financial and human resources.

  • Marketing Innovation

It is the application of a new marketing method that involves significant changes:

  • Design
  • The packaging of a product (presentation)
  • The pricing of goods and services. (Prices)
  • Your promotion
  • Your positioning

The Four P’s in Marketing Innovations [14] :

  • Product: The notion of a product refers to changes in its design and presentation if you think about changing it or making it more attractive or orienting it towards a new market or market segment.
  • Price: The notion of price refers to the use of pricing methods to market goods or services.
  • Promotion: The notion of promotion refers to the promotional efforts made by companies to improve the image or to broaden the knowledge of their products.
  • Positioning or Distribution: It deals with the types of sales channels that companies choose to place their products and how these sales channels are designed to market these products as well as possible

In the Cuban context, commercial innovations are considered:

Changes or improvements in any of the marketing variables, such as improvements in product and service designs, in packaging, electronic commerce, supplier evaluation system and customer satisfaction levels, distribution channels and electronic payments [15] .

Innovation by the transformative scope in the technical aspect

Classification of innovation according to different parameters

Incremental innovation

These are small changes aimed at increasing the functionality and benefits of the company or community, which although isolated are not significant, when they continually occur in a cumulative manner, they can constitute a permanent basis for progress and change. They are characterized by generating a minimum expense, with a significant economic or social effect, they do not represent a significant technological change. They are continuous improvement activities carried out in existing processes, products, services, and management and social development systems.

They classify here:

  • Technological innovation: Associated with hard technology, which is directly related to the change or improvement of the means of production, as a result of the use of installed technology. Proof of this are the changes in machine tools, tooling and devices, automation.
  • Commercial innovation: View as changes or improvements in any of the marketing variables, such as improvements in the designs of products and services, in packaging, e-commerce, supplier evaluation system and levels of customer satisfaction, distribution channels, electronic payments.
  • Organizational innovation: They refer to changes or improvements in the direction and organization under which the productive, commercial, economic, financial and human capital activities are carried out, as well as in the development and behavior of citizens in society. They are a type of innovation that enables greater access to knowledge and the use of material, financial and human resources. They understand the practical effect of changing the attitude and aptitude in the activity in which it is carried out, which is reflected in multiple ways: reduction of hierarchical levels, problem solving through work teams with broad participation of workers and the population in general, formalization of the quality system with ISO certification, the introduction and spread of information technologies,

Incremental innovation can be understood as a new use of possibilities and pre-existing elements [16] . This modality acquires special relevance in certain more traditional industrial sectors and is of great importance in the case of the least developed countries.

Examples:

  • The establishment of better forms of product distribution.
  • The assembly of new more productive production machines.
  • Establish and endorse or certify quality systems.
Radical innovation

They are those that constitute a total break in the way of doing things, generally based on new scientific or technological knowledge. They are innovations that create new processes, products or services that cannot be understood as a natural evolution of the existing ones. Although they are not distributed uniformly over time like incremental innovations, they do occur with some frequency.

They are characterized by opening new markets, new industries or factories, new fields of activity in the fields of production, services, culture and society; Significant changes are obtained in parameters such as: productive levels, efficiency, cost, productivity, and in the elevation of the population’s quality of life.

The radical character is given by:

  • The breadth of innovation.
  • Due to the obsolescence acquired in previous practices: this implies a “destructive” moment of the previous productive practice; a “creative destruction” [17].

It arises from the incorporation of scientific knowledge produced as a result of R&D activities whose successful application means a positive break from the previous technological level.

For Mario Albornoz, they are:

  • Innovations that modify the “paradigm” or the prevailing technological horizon.
  • Innovations that make time.
  • They shake the whole pattern of the economy
  • They must meet certain conditions:
  1. a) Be focused on time
  2. b) Radically alter economic geography
  3. c) Require and make possible the production of new goods and services
  4. d) Enlarge the market for a wide range of industrial products

These types of innovations should not be thought of as independent events, but as interrelationships, so that technological innovations involve organizational or commercial innovations, or vice versa.

Innovation Results

  • Final materialization of the innovation; in any of the areas of product / service, process, market and organization, as well as their corresponding measurements and the articulation of policies to protect these results.
  • It is as important for the company as a result of innovation, incremental as radical.
  • Those that focus on the areas of process and product / service and those of an organizational nature should be considered equally important, since they all have an effect on increasing the competitiveness of the company; some determine the specific positioning in the market and the others produce deeper transformations that allow the consolidation of leading organizations and inimitable by their competitors.
  • Relevance of the Assurance to Innovation: protection and conservation of products, processes and innovations, in order to improve the competitive position of companies, so it is necessary to observe the provisions of Intellectual Property Law, which covers the Industrial Property, understood as the set of exclusive rights that protect both the innovative activity manifested in new products, new procedures or new designs, and commercial activity, through the exclusive identification of products and services offered in the market and Copyright .
  • Proper use of the different instruments covered by Industrial Property, including patents, utility models, trademarks, names, industrial designs, etc.
  • Confidentiality or non-disclosure agreements, with personnel who have access to or possess sensitive knowledge and information, not contemplated in the previous modalities.
  • Management of new knowledge resulting from the innovation process, as an input that must enter the company’s Knowledge Management System.
  • The innovation process generates a value that can be measured by defining essential indicators to analyze the evolution obtained and guarantee the necessary feedback from the process.

Government and innovation

Some of the most frequent actions carried out by governments based on innovation are:

  • Development of financing and risk capital programs.
  • Implementation of tax incentives.
  • Creation and / or strengthening of research centers.
  • Creation and / or strengthening of interface entities.
  • Creation of national and territorial networks to facilitate communication and the transfer of knowledge.
  • Improvement of basic education programs

Related Posts

Leave a Comment

Scroll to Top