Innovation can be a daunting word for business people – they immediately think of innovations connection with expenses and thus try to stay out of this zone by convincing ourselves that our business is “good where it is“ on the novelty scale.
However, this misleading assumption stops people from seeing a bigger picture in which it is clear that the introduction of innovations in a business is a top priority if a company wants to stay competitive in its field.
Stop cutting costs – invest in the long-term success
The key component of businesses’ success is innovative decisions or, in other words, research and development (R&D). The major reason why some startups fail to compete with their competitors is that they put all the effort into advertising, convincing consumers to buy their products or cutting costs by all possible means. Even though these strategies are important, they do not assure long-term big-picture success if they are not encouraged by business’ innovations.
Successful and known companies like Google and Microsoft consider innovations as one of their top priorities. In 2017, these leading businesses spent more than 1/6 ( Google – 15%, Microsoft – 14%) of their annual net revenue on R&D. Surely, innovations are not the only things driving companies towards, but would huge companies accessing most accurate insights invest in an unimportant thing?
Innovating a business = positive impact = staying competitive
Innovation loves the ones who love to innovate
One of the key factors for the company’s ability to innovate is the motivation of its employees. If workers are committed and want to contribute to the growth of their workplace, they are prone to come up with original ideas so that both the worker and the company as a whole would benefit. In short, a motivated employee is a drive to innovative decisions.
Interestingly, bringing innovations that were suggested by specific workers ends up motivating them, thus creating a vicious circle of motivation and innovation in a particular business. In other words, deploying smart technologies contribute to a better workplace environment for workers’ creativity to spread in, which results in better suggestions and ways to improve the company’s work.
International scientific society came to a consensus that innovative business decisions lead to global benefits, too.
European Central Bank mentions that major benefit of innovation is its contribution to both local and global economic growth: “Simply put, innovation can lead to higher productivity, meaning that the same input generates a greater output. As productivity rises, more goods and services are produced – in other words, the economy grows.”
Moreover, economic growth itself enables an environment for even more innovations to be introduced and thus the productivity keeps rising. McKinsey scenario modelling estimates that automation could raise productivity growth globally by 0.8 % from 2015 to 2065.
Clearly, innovation should not be just a buzzword for the executives who are concerned about their company’s future. Do you care about yours?