The Impact of Innovation on Businesses

This assignment delves into the crucial role innovation plays in business success. It examines how different factors influence innovation within organizations, including organizational culture, external relationships, knowledge-based trust, and the adoption of new technologies like mobile banking. The analysis also considers the impact of innovation on performance, growth, and competitive advantage. The research draws upon various academic sources and real-world examples to provide a comprehensive understanding of the complex relationship between innovation and business outcomes.

Importance of Innovation

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
In the global world of today, economic growth is really important and for that the main
aspect that is required to be considered is the innovation (Morton, 2013). The process by which
new ideas are created and implemented is called as innovation. All the ideas that are derived are
use to make the new product or service by converting the idea into operations. Creativity is the
main thing that is required to carry out the innovation as without that no innovation will be
possible. In the below mentioned report various aspects of innovation such as its importance and
its impact on economy in relation to the IT sector will be discussed.
TASK
In the modern world there is lot of competition and to deal with that it is very important
that innovation should be used. In every sector it is required that proper innovation management
system should be present. There are various advantages that can be achieved with the
introduction of innovation (Hess and Rothaermel, 2011). Some of them are that by it improved
product will be made which will have better quality, new production process will be developed,
management of employees will be done in better way and will have good management system. In
order to solve any problem that is related to the innovation, it will be required that creativity
should be used and due to this reason it can be said that innovation and creativity are interrelated.
Innovation can be done in various fields which include technical and human innovation. By
following this new developments will take place and also the existing products and services will
be improved. Innovation can be done in relation to all manufacturing, distribution and marketing
services. With the help of innovation there will be a social change also that will be achieved as
by this new rules will be a adopted and old ones will be rejected.
According to Metcalfe and Miles, (2012) it has been stated that in the hanging environment it is
very necessary that the change should be adopted with reference to both new and old
organisations. If there will be no innovation that its impact will have to be born by all that is its
customers, community and employees at a large scale. It will be the duty of the mangers to
ensure that there are proper changes and innovation that are taking place as by that success of the
industry will be determined. In IT sector there are various changes that keep on occurring which
will have an impact on the society ans all other aspects. As stated by Lin, (2011) it can be
analysed that innovation is not related to any single factor, there are various types of innovations
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that take place in any industry which are technical innovations as in the changing environment
the needs and demands of the consumers keep on changing and in order to satisfy them it is
required that technology should be developed. This can be achieved with the help of conduction
of proper research and development.
The customers will be demanding such products and services that will be of better
quality, cheaper and new and for that technology will have to be developed (Gorodnichenko and
Schnitzer, 2013). In the It sector it becomes all the more important that technical innovation
should take place as here new software will be required to be made in relation to various
purposes such as for mobiles and for other companies which are mainly concerned with
information technology. In this sector there is lot of competition that is present in the market so
to deal with it , it becomes necessary the new products should be brought so hat more customers
can be attracted and additional advantage of the competition can be taken.
Than comes the Process innovation in which it is ensured that new process should be
developed in relation to the production, marketing and distribution. For this it will be required
that new software, techniques and equipment will be developed. The development that has to be
made in any process should be such that by it the quality of product and production will be
improved and also the cost of production and distribution will be reduced. In the It sector there
are various researches that are carried out so it is important that new innovations should be
implemented so that the cost that is incurred can be decreased and the outcomes can be
improved. The last one is the administrative innovation in which the organisational process is
developed by which the administration of the industry is improved. This is required to be done as
by this the performance of the sector can be enhanced and if this will be done than there will be
an overall growth that will be experienced. It will provide more satisfaction to all who are related
with the industry as by this the administration and other transaction cost will be declined.
According to Urbancova, (2013) it can be said that all the innovations that take place are related
to one another as when a process is required to be developed than for this it will be needed that
technical innovation should also be present as by this only process will be enhanced. Also with
development of process, the administrative innovation will be also achieved.
According to Battisti and Stoneman, (2010) it has been stated that there are various issues
that are faced by the industry while the new innovation in relation to technology is adopted. As
for the development of any technology there will be requirement of the research which will be
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conducted by the researchers and in order to conduct it, there will be requirement of large
amount of money and it is always not possible for the industry to provide it. It has also been seen
that as in the global environment changes take place at fast pace so there will be need that
technology should also be developed at that rate which is very difficult to be achieved. In the IT
sector there are requirement of the new and advanced software which should be such that will
provide the customers with the additional advantage in relation to what other are already
providing. So there is always a risk of failure that whether the new technology will be preferred
by the customers or not and if not than it will bring a huge loss for the industry.
As stated by Kornish and Ulrich, (2014) it has been depicted that there are certain rules and
regulations that have been specified in relation to this sector. In fact there are various Acts that
have been made which defines the criteria that is to be followed and so while development and
adoption of new technology it will be difficult to meet with those requirements. Some of them
are in relation to the license, fraud which will have to be dealt with. According to Rosenbusch,
Brinckmann and Bausch, (2011) there are also the cases when the regulatory framework of the
country is weak and there is lack of proper standards which will also prove to be an obstacle in
adoption of new technology. There is always a fear in relation to any change that takes place as it
is difficult to establish the change in the existing system and also it is always thought that new
technology will be complex and it will not be possible to understand it in easy manner.
Due to this reason it becomes difficult to implement the new ideas. The industry is not
always supportive in respect of new innovations as they will first have to evaluate that whether
the brought idea is appropriate or not and if there will be any additional advantage that will be
earned due to this and on that basis it will be decided that whether the technology should be
adopted or not and this the biggest risk that is involved with it. The employees in the industry
will also resist change as they will have to take additional training in order to use it. So this also
an issue as there will be requirement that the skills will have to be developed regularly.
As stated by Nambisan, (2013) it has been depicted that there are various core
competencies that are needed in IT sector. Core competencies are the skills that are possessed
which makes it different from others, so it can be said that they are the specialised qualities that
are required to achieve the success. As there are lot of innovations that are required to be made in
this sector so it has always been important to have some special skills which will help it to
establish its position in the market. Edquist, (2010) states that the most important is to have a
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proper understanding of the technologies that are existing in the current scenario. It is very much
necessary that deep knowledge should be gained in this as than only they will be possible to use
the available resources in the most effective and efficient manner. For this purpose there are
various sources from which information can be collected which includes publications. Research
reports or any professional course in relation to it. In the IT sector there are various purposes that
are required to be achieved and for that it will be needed that all the processes should be
integrated. So for this purpose the other skill will be required which is to integrate the systems.
There are various laws that have been made in order to establish the proper internal control
which is needed to maintain the balance between all the systems.
According to Yang, (2012) it has been stated that the practices, policies and politics that are
going on in the industry should be understood than only it will be possible to take the steps that
will be helpful in that respect. In the industry there are people with different opinions so it is
important that proper system should be there to deal with them. Also there should be appropriate
communication skills by which it will be possible that all the collected and relevant information
should be communicated to all. This is needed to be done because by this only the proper
implementation of the practices and theories will be ensured.
It is needed that thinking should be strategic so that they can be involved in all the
meetings that are held. They should always be ready to appreciate the new ideas that are given by
anyone so that industry can be benefited by it. The most important competency that should be
held in this industry is to be adaptable. This is because in this sector there are lot of changes that
keep on arising and new innovations are necessary to be made so it will be required that the
industry should be such which can incorporate and adapt all those changes and take the
advantage of it.
As stated above there are various issues that arise in the adoption of innovation in this
sector. So according to Naranjo Valencia, Sanz Valle and Jiménez Jiménez, (2010) it is needed
that proper steps should be undertaken in order to overcome those problems. As the major issue
is that the needs of the customers fluctuates with high rate so it will be required that there should
be proper manner by which the research should be conducted so that it can be known that what
they want and than the innovation should be done in that manner. In diffusion of innovation there
are various aspects that should be considered which are communication, time and social system.
In this process it will be identified that at what rate will the innovations will be applied and
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adopted in the industry. It will be needed that in this sector as there are continuous innovations so
proper communication should be established. The innovations will be adopted in time if there
will be capacity to deal with the competition and also create a strong influence that it becomes
necessary for the industry to apply the change. It will have to be identified that who all are those
that are adopting the changes at fast speed and who are not and for them some steps will be taken
so that they can also comply with the innovation. It will be ensured that proper communication
system should be established so that the implementation process can be improved and all the
objectives that have been set in relation to innovation can be achieved on time.
According to Page, (2014) it has been stated that in this industry it is required that open
innovation should be adopted as in this new ideas are always welcomed so it will be more
beneficial for it to take the ideas from not only the internal sources but also from outside the
industry. By doing so the innovative thinking of others will also be incorporated which will
provide the additional advantage to to industry. For this purpose strategic alliance can be used
that means that it can combine the other industry with itself and it is not required to be in legal
manner. By this open innovation will gain momentum as there will be inflow of creative and
innovative ideas by more members. This can also be done within the industry by taking ideas of
different organisations in the IT sector only.
As stated by Lasagni, (2012) it has been depicted that in order to be successful in competitive
market it is necessary for the industry to save its intellectual property which includes its brand,
patent and copyrights, etc. it is necessary to ensure that they are not left unprotected as if others
will copy the product or the service that is provided by them than there will be no speciality
which will help them to deal with the competition. For this it will be required that proper steps
should be taken. It will be required that professionals should be included in the sector so that
they can carry out the necessary innovations by which the chances of copying will be reduced
and also with the help of it there will be growth in the market value of the industry. It should
also be ensured that there are appropriate contracts that have been made which will help the
industry in protecting its rights and assets in every part of the world.
CONCLUSION
From the above mentioned report it can be concluded that innovation is the main aspect
that is required to be taken into consideration in order to achieve the success in IT sector. In this
industry the technological innovation is the most important as by this the competition in the
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market will be dealt with. It has also been identified that there are various skills that are required
in this sector for ensuring the growth and for that open innovation will be given the due
importance. It has also been found that it is necessary that all the intellectual rights should be
protected so the the market value of the industry can be increased which will lead to the overall
development of the industry.
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REFERENCES
Books and Journals
Battisti, G and Stoneman, P., 2010. How innovative are UK firms? Evidence from the fourth UK
community innovation survey on synergies between technological and
organizational innovations. British Journal of Management. 21(1). pp.187-206.
Edquist, C., 2010. Systems of innovation perspectives and challenges. African Journal of
Science, Technology, Innovation and Development. 2(3). pp.14-45.
Gorodnichenko, Y and Schnitzer, M., 2013. Financial constraints and innovation: Why poor
countries don't catch up. Journal of the European Economic Association. 11(5).
pp.1115-1152.
Hess, A. M and Rothaermel, F. T., 2011. When are assets complementary? Star scientists,
strategic alliances, and innovation in the pharmaceutical industry. Strategic
Management Journal. 32(8). pp.895-909.
Kornish, L. J and Ulrich, K. T., 2014. The importance of the raw idea in innovation: Testing the
sow's ear hypothesis. Journal of Marketing Research. 51(1). pp.14-26.
Lasagni, A., 2012. How can external relationships enhance innovation in SMEs? New evidence
for Europe. Journal of Small Business Management. 50(2). pp.310-339.
Lin, H. F., 2011. An empirical investigation of mobile banking adoption: The effect of
innovation attributes and knowledge-based trust. International journal of
information management. 31(3). pp.252-260.
Metcalfe, J. S and Miles, I. eds., 2012. Innovation systems in the service economy: measurement
and case study analysis (Vol. 18). Springer Science & Business Media.
Morton, M. ed., 2013. Rubber technology. Springer Science & Business Media.
Nambisan, S., 2013. Information technology and product/service innovation: A brief assessment
and some suggestions for future research. Journal of the Association for
Information Systems. 14(4). p.215.
Naranjo Valencia, J. C., Sanz Valle, R and Jiménez Jiménez, D., 2010. Organizational culture as
determinant of product innovation. European Journal of Innovation
Management. 13(4). pp.466-480.
Page, T., 2014. Notions of innovation in healthcare services and products. International Journal
of Innovation and Sustainable Development. 8(3). pp.217-231.
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Rosenbusch, N., Brinckmann, J and Bausch, A., 2011. Is innovation always beneficial? A meta-
analysis of the relationship between innovation and performance in
SMEs. Journal of business Venturing. 26(4). pp.441-457.
Urbancova, H., 2013. Competitive advantage achievement through innovation and
knowledge. Journal of Competitiveness. 5(1).
Yang, J., 2012. Innovation capability and corporate growth: An empirical investigation in
China. Journal of Engineering and Technology Management. 29(1). pp.34-46.
Online
Innovation and Creativity in Industry MDes. 2017. [Online]. Available
through:<https://www.cranfield.ac.uk/courses/taught/innovation-and-creativity-
in-industry>. [Accessed on 15th June 2017]
Becoming an innovative business. 2017. [Online]. Available
through:<https://www.business.qld.gov.au/running-business/growing-business/
becoming-innovative>. [Accessed on 15th June 2017]
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