Sources of Innovation
What are the seven sources of innovation by Peter F Drucker?
Innovation refers to the process of creating ideas, products, servies, or methods that can bring about significant improvements or changes. Sometimes it may involve improvements on existing concepts whereas at other times it involves the development of totally new concepts or solutions that address unaddressed needs or problems in new ways.
Innovation can happen in various forms. It can happen in the form of technological innovation. Our world is full of such examples where technological innovation has helped companies grow into global giants. For example, Apple, Google, Amazon, Facebook, Netflix, all of these are examples of technological innovation. However, innovation can also happen in the form of product/service innovation, process innovation or business model innovation.
According to Peter F Drucker, there are seven main sources of innovation, which we are going to discuss in this post.
Unexpected:
Innovations can arise from unexpected sources or in unexpected ways. For example, while researching one problem, someone might stumble upon a resolution that addresses another bigger problem. Someone may also unexpectedly find a solution to an unmet need or a major problem. There are several such examples in human history where innovations happened by chance. For example, man’s discovery of fire or dynamite are just examples of unexpected innovation. While innovations can happen unexpectedly, they can also offer unexpected benefits that may make life simpler for us as fire did for humans. Sometimes innovations may significantly lower the prices and at other times they may reduce the time required to complete a task unexpectedly.
Incongruity:
Incongruity refers to unmet demand against supply. When demand is incongruent with the supply or the product does not fully match the demand or fulfill it in the right manner, an innovation might happen. It is quite common for us to seek better resolutions to our problems or find and create products that better fulfill demand or address unmet needs. Sometimes we are also forced to develop our own solutions when we identify incongruities around ourselves. Innovations happen when existing solutions are incongruent with the problem.
Market structure:
Innovations can also be born of existing market structures. Consider the search engine market before Google. The search engine market changed completely with the birth of Google. There were no search engines in the market that could cater to the search needs of people as well as Google did. Google’s motto is to organize all the information found online and make it available to people. It was not possible for people to access all this information online so easily before Google made it possible. There was the World WIde Web but there was a lot of information people could not access. It was an existing unmet need and the resolution was offered by Google. The existing search engine market or the World Wide Web gave rise to the need for a search engine as efficient as Google. In this way, market structures can be a significant source of innovation. The same applies to Amazon and ecommerce. People can now buy products online easily and you can find most things of your use on Amazon. Amazon’s business model has also inspired the birth of several other small ecommerce brands.
Necessity:
Necessity is said to give birth to invention but it can also give rise to innovation. For example, when there was the need to research complex diseases and the viruses or micro organisms that caused them, the microscope was born. The electron microscope lets us investigate the ultrastructure of these microorganisms. Our world is full of such innovations that were born of one or the other need. As technology has advanced, our needs and preferences have also changed. For example, one cannot imagine life without Google or Amazon. We need to access information and we search online. We need a product and we search on Amazon. Digital innovations have made life a lot easier for us as we can chat and talk to people using digital innovations like Whatsapp. With technological evolution, new and more complex technologies were born, which were meant to fill the gaps left by the existing technologies. So, as we are evolving new needs are born and with them new innovations also happen.
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Demographics:
Demographic factors like age and lifestyle can also be sources of innovation or give rise to innovation products and services. Over the past few decades our lifestyles have changed a lot influenced by several factors including technological and economic factors. Our lives are heavily digitalized now. We have also grown more health conscious since the pandemic. However, these lifestyle changes can be sources of ideas for the innovators. Our fitness needs grew as our lifestyles became more complex and then arose the need to address the fashion and fitness needs at once. This is how athleisure products came into being. Nike makes athleisure products as well as products that address the different needs of different categories of athletes. Other brands like Lululemon Athletica and Under Armour also address specific needs of athletes through their products.
Changing perception:
With time as our perception has changed so has our perception of several things including things related to health. Changing perception towards things can also be a source of innovation. As our perception towards health and what makes a body healthier changes, the market was flooded with low calorie and healthier products. However, it is not just health but our perception of several more things that have changed. Several of these changes were driven by technological changes.
Our perception towards the use of technology itself for education and fulfillment of personal and professional needs has undergone a major change. Technology has now become integral to our lives. There are now several innovative apps on our smartphones that cater to our personal and productivity needs. We also depend on technology for buying online as well as for our daily dose of entertainment. Perceptions regarding technology have changed faster since the pandemic. AI is also becoming integral to our lives and we are using tools like chatGPT to fulfill our professional needs. We were not as akin to technology some decades ago and technological products and services were mainly seen as distractions. It has all changed over time leading to more and more technological innovations that have made life a lot simpler for us. These technological innovations have also played an integral role in changing people’s perception towards technology and technological products.
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New knowledge:
In several areas including science, technology, psychology and business, new knowledge can be a source of innovation. From artificial intelligence to nano technology, and several more such revolutionary areas, new knowledge has fuelled innovation like nothing else. Every year while a lot gets added to the existing knowledge base, new knowledge has been the source of several life changing innovations in human history. Apart from technology, another critical area where new knowledge has remained a constant source of innovation is healthcare. Biotechnology and nanotech have helped the field of healthcare advance a lot. Even in the field of technology, new advances are happening in the areas of artificial intelligence and machine learning. These are among the fastest growing technological areas. We are already benefiting from several advances in AI and machine learning.
These were the seven critical and main sources of innovation. New sources of innovation have also been identified with time. However, these were the most basic and important sources of innovation. Innovation can be born out of necessity or incongruity or even human passion or quest for new knowledge. These innovations have changed our lives a lot and in several areas helped us increase our productivity manifold. Our life is full of such innovations from Google’s search engine to Amazon, social media, Netflix and chatGPT. Our world has witnessed a lot of innovations happening in recent decades at a very fast rate. Most of these innovations happened in the area of technology and healthcare. Since human thirst for knowledge cannot be satisfied, we will keep seeing more innovations in future.
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