What Is Innovation and Where Does It Come from?

Abstract

Over the last decade, there has been an increased focus on innovation in many businesses. Several factors have contributed to this increased attention:

• The increased rate of change in competition, especially the growing capabilities of India and China.

• The fall of information costs as the web becomes more fully adopted, and consumers are demanding more.

• Greater focus on cost-cutting with a spike in outsources/near source/far source. Most of the things that could be cut, trimmed, or outsourced have been done. Many businesses are relatively lean and need to return to growth and differentiation.

All of these factors contribute to the need for innovation. However, there are ongoing trends that will continue to increase innovation focus now and in the future. These can include, for example, focus on global warming, reduction in carbon footprints, and poverty eradication – all of these mean new technologies are required to reduce emissions and genetically modify the food supply, among others. Another example is in the United Kingdom, where health care reform will mean new demands on an antiquated health care system. The banking sector is already undergoing change and disruption.