the organization. Even when failures occur, the learning gained can be a valuable asset for the organization. The scope of innovation exists primarily within the realm of the individual and the collective knowledge of the organization. This has become increasingly evident as the complexity of technology and markets has increased. Therefore, the knowledge reservoir of the organization determines the type and level of innovation possible. If an organization’s culture and routine are capable of capturing knowledge from past failures, then future innovative efforts will not repeat the mistakes of the past. Organizations that develop such knowledge systems are in a better position to store and share this knowledge so that it will improve the innovation process through enhanced idea generation, better decision making, and more effective exploitation. In this way, all ideas, whether successful or not, can contribute to the organization’s long-term success.
INNOVATION AND SOCIETY
Innovation is an attribute that is beneficial to a large society such as a nation or region. Not only can innovation introduce new products and services that enrich the lives of individuals both nationally and internationally; it can also contribute significantly to economic growth. Process innovation also increases the amount of economic growth by providing cost competitiveness within a nation and attracting investment by organizations that establish bases there. National economies develop through the innovation and manufacturing abilities of their organizations and from selling the resulting innovative products on the global market. These activities not only bring increased revenue streams into the economy, increasing the gross domestic product, but also provide employment opportunities. On the other hand, innovation can have a negative impact on society by wiping out traditional industries or having other unintended side effects. For example, although a certain chemical innovation may allow farmers to grow more crops per acre, it may also pollute the environment, kill wildlife, and even cause human health problems by working its way up the food chain. In order to balance the advantages and disadvantages of particular innovations, specific regulatory bodies such as the Food and Drug Administration have been established; if side effects are deemed to be too dangerous, the product can be blocked from reaching the market. Many national governments have established agencies to promote and foster a more innovative culture in order to increase wealth and reduce costs for the nation. In this respect, performance indicators such as gross national product, export sales, direct foreign investment, R&D expenditure, employment levels, and new business startups suggest the innovative potential of a large society.