as innovation, it must have some degree of desirability and intentionality
(West & Farr, 1990). When we examine the output of innovation and
change, another difference becomes apparent. This is that change can have
a positive or negative impact on the organization, whereas innovation by
definition must be positive because it must add value to the customer.
Therefore, we may conclude that although all innovation can be viewed as
change, not all change can be viewed as innovation.
INNOVATION AND FAILURE
One of the first writers to emphasize the importance of innovation was
Schumpeter (1942), who described innovation as “creative destruction”
that is essential for economic growth. Innovation is essential for helping
organizations grow. Growth is often measured in terms of turnover and
profit, but growth can also occur in knowledge, human experience, and
the efficiency and quality of products, processes, and services. The
innovation process will naturally involve unsuccessful ideas. These are
seen as a natural byproduct of the innovation process. In order for some
ideas to succeed, many more must fail. Organizations can learn from these
failures and bring new knowledge (and sometimes technology) to use in
future innovative actions that may benefit the organization. Organizations
that can successfully sift out the good ideas from the bad will be more
adaptable than those that cannot do so. In managing the innovation
process, destroying poor ideas is often as important as nurturing good
ones. Destroying poor ideas early on allows scarce resources to be released
and refocused on new ideas.
EXAMPLE: Merck’s product Mectizan, used to treat river blindness in
developing countries, has been of huge benefit to patients: It literally
allows the blind to see. However, in economic terms the product
innovation has cost Merck money because the company has distributed
the drug for free as part of its corporate social responsibility policy
(because people with the disease usually cannot afford to pay for the
drug). This example highlights the difficulty of defining innovation based
on narrow metrics such as profit.
INNOVATION AND ENTREPRENEURSHIP
The terms entrepreneurship and innovation are often used inter -
changeably, but this is misleading. Innovation is often the basis on which
an entrepreneurial business is built because of the competitive advantage
it provides. On the other hand, the act of entrepreneurship is only one way
of bringing an innovation to the marketplace. Technology entrepreneurs