Significance of Incremental Innovation in Modern Industries

This essay evaluates the role of incremental innovation in modern industries, with a focus on the software industry and Google. It discusses the difference between radical and incremental innovation, the innovation process, and the role of incremental innovation in sustaining future growth.

0Running head: CREATIVITY AND BUSINESS WEALTH
Creativity and Business Wealth

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Table of Contents
Significance of Incremental Innovation in Modern Industries..................................................2
Innovation Process.................................................................................................................2
Difference between Radical and Incremental Innovation......................................................3
Technology Industry..............................................................................................................4
Role of Incremental Innovation.............................................................................................4
Innovation Failures.................................................................................................................5
References..................................................................................................................................7

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Significance of Incremental Innovation in Modern Industries
Innovation is defined as the process of transforming new concepts and ideas in working
models to improve the existing service, product or procedure. Currently, the role of
innovation in industries has grown extensively, and companies invest in new innovations to
gain a competitive advantage over their competitors (Kline and Rosenberg, 2010). Many
people have the opinion that innovation is defined as the radical breakthroughs, big leap
forwards or ‘eureka’ moments which completely changes existing process, products or
services. But, many experts argue that innovation does not only mean radical breakthroughs,
instead, small innovative changes in existing products which improve their usability also
assist corporations in gaining competitive advantage.
The importance of incremental innovation has grown substantially between organisations and
modern companies are giving more significance to incremental innovations rather than
disruptive innovations. This essay will evaluate software industry to understand the role of
incremental innovation in between modern businesses. Further, the essay will analyse
‘Google Incorporation’ to understand the importance of incremental innovation in the
business development and how corporations can use it to sustain their future growth. William
Miller defines business innovation as the process of creating new wealth and value to existing
product or facility in order to increase the economic prospects of stakeholders (Drucker,
2014).
Innovation Process
Organisations and entrepreneurs implement the process of innovation to gain competitive
advantage or add value to their business. An effective process of innovation requires a
thorough analysis of service, product or process because adequate understanding leads to new
innovations (Teece, 2008). Bessant and Tidd (2011) provided that innovation can assist in
change of four different dimensions which include process, product, position, and paradigm.
Product innovation in technology industry means creating a new device or gadget that change
the use of existing product or obsolete them, like the innovation of smartphones obsolete
feature phone and reduces their sales drastically.
Process innovation is referred to changing the method of producing or manufacturing existing
products (Becker and Egger, 2013). For example, large smartphone companies such as Apple,
Google or HTC uses advance robots to build small microchips that cannot be produce by

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handmade. Position innovation is defined as changing the existing position of the product,
service or process from the market and using it for something else. For example, Lucozade
shifted their position from glucose drink manufacturer to fitness industry. Paradigm
innovation is defined as transforming or changing the existing or underlying mentality of the
customers for products to add new value. For example, Hacienda La Esmeralda, Luwak
Coffee, and Fazenda Santa Ines are the companies which create premium coffee which sells
for around $50 to $350 a pound.
To establish an innovative process in business, a corporation is required to analyse its
organisational structure and establish an appropriate business model that promote and support
innovative ideas. To select a process, a company is required to recognise its business
challenges or issues that are necessary to be resolved by the firm to gain competitive
advantage. Successful innovation requires a thorough analysis of the existing product,
process or service to completely understand its functionalities (Sheu and Lee, 2011). After
the study, the company has to design and develop a new model or structure which is based on
the examination of the product, and it aims to solve its present challenges. After that, the firm
has to create real-time prototypes. The company should gather the perspective of people for
whom the new product or service is being developed for to ensure the product satisfies their
demands. The firm is required to create new prototypes or real-life model by adding new
changes to it until they succeed and create an innovative process, product or service (Mahr,
Lievens, and Blazevic, 2014).
Difference between Radical and Incremental Innovation
Many people consider giant leap forwards, Eureka movement or radical breakthroughs as an
innovation that resulted in completely changing or providing new methods for performing
existing tasks. But, in recent years, experts give more importance to ‘incremental innovation’
and especially in the software sector. Incremental innovation referred as a series of small
creative innovations or advancements to the existing process, service or product. According
to Bessant and Tidd (2011), it did not change the aspects or methods of existing product or
services; instead, it focuses on adding small new features that improve its overall usage.
Radical innovations, on the other hand, is opposite; it change the existing game by creating a
completely new product, service or process that made existing products obsolete (Song and
Thieme, 2009). A radical or disruptive innovation is defined as the innovations that have a

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significant influence over the market and economic activities of a company; it is a substantial
enhancement or upgrades in the existing product, process or service.
There is a substantial difference between radical and incremental innovation based on its
impact, resource, time, profit and others. A successful radical or disruptive innovation
requires substantial investment of resources and time. To effectively conduct a radical
breakthrough, people or corporation have to invest heavily in the process of innovation, and it
also takes a significant amount of time. In case of incremental innovation, the investment of
resources and time is lower than compared to disruptive innovation. In radical innovation, a
plan or structure cannot be created in the beginning, and people have to go with the flow of
innovation, and they depend upon market-based learning and discoveries. In incremental
innovation, the corporations can create a detailed plan before starting the process of
innovation. The risk factor in incremental innovation is low when compared to radical or
disruptive innovation because the investment of resources and time is low, whereas, radical
innovation has a considerably high risk of failure.
Technology Industry
The companies in software industry implement similar process while creating new products
or procedures. Software industry includes numerous processes relating to development,
maintenance, and publication of software applications that are used by different businesses,
customers and government. In 2014, Gartner conducted a global research on software
industry which provided that the industry size is more than US$407.3 billion and it has grown
4.8 percent since 2012. The software sector is growing rapidly, and its main players include
Microsoft, IBM, Oracle and many others. Google is an American multinational corporation
that operates in computer, software, hardware and technology industry; it was founded in
1998. Google creates several hardware products for its customers, but they are known for
their highly advanced software.
Role of Incremental Innovation
In past decades, several radical or disruptive innovations took place in software industry
which changes its existing process and products. There have been various breakthroughs in
fields such as medical, defense and consumer products which increases the impact and
revenue of software sector. The innovation of internet is one of the greatest radical
breakthroughs that resulted in creating several other smaller innovations (Kim et al., 2017).
Some of the biggest companies in the world are based on the internet which proves its impact

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on society. Many corporations such as Uber, Amazon, and Airbnb provide their services
through online platform without which they are not able to perform their actions.
In the software industry, it is difficult to create new disruptive innovation because the process
is considerably hard (Akman and Yilmaz, 2008). Most of the firms avoid investing in
disruptive innovations because the risk factor is considerably high. Google has the resources
to invest heavily in radical or disruptive innovations, and they do invest in radical
breakthroughs, but they give more emphasis on incremental innovation.
There are various incremental innovations created by Google that assist in improving their
performance and sustain their future growth. For example, Autocomplete in Google search is
a small feature, but it increases the use of Google’s services at a global level. One of the
biggest incremental innovations by Google that has a giant impact on the world is Google
Maps. Google decided to use satellite image and other tracking software to create a map of
the world. Google Maps is a software application that uses the data of satellite and Google’s
servers to provide a world’s map in people’s phone, laptop, computer or other internet
devices which assist them in performing various tasks such as checking directions to a certain
location and measure the time and distance between two locations (Edison, Bin Ali, and
Torkar, 2013).
Innovation Failures
These examples show that modern corporations prefer to invest in incremental innovation
rather than radical breakthrough because of the high-risk factor. There have been several
failed breakthroughs that showed that disruptive innovations could result in failure. For
example, Google Glass was a breakthrough innovation by the company, and it created a lot of
hype among people as well; it performs actions such as show direction, search on Google,
shot pictures, and take videos. But the innovation failed because people did not prefer the
way it looks or the services that it offers. Google also tried to reinvent social media platform
and give competition to Facebook by introducing Google plus. It was an innovative social
media platform, but it failed. Therefore, modern companies prefer to invest in incremental
innovation because of low-risk rate, and it shows more prominent chances of success.
From the above observations, it can be concluded that incremental innovations are
substantially beneficial for software companies. Organisations use incremental innovation for
improving their existing services and adding innovative features that increase their usability.
The success gain by companies proved that innovation did not just mean radical

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breakthroughs, eureka moments or big leap forwards but incremental innovation also assist
companies in improving their existing services and gain competitive advantage (Bessant and
Tidd, 2011). This approach requires a lower investment of resources and time, and it also
includes lower risk factor, therefore, it is better for entrepreneurs and small and medium
enterprises. But large corporations, such as Google, are also incorporating incremental
innovation approach into their organisational structure to improve the quality and usability of
their products and services. Google is a good example which shows that incremental
innovation is beneficial for a corporation just like disruptive innovation since it leads to
increase in sales, security, and usability.

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