It is conventionally measured as the percent rate of increase in real gross domestic product , or real GDP. The latter describes the essence of innovation quite well. The purpose of innovation is to come up with new ideas and technologies that increase productivity and generate greater output and value with the same input.
If we look at the transformation of the US , once a largely agrarian economy that advanced from emerging nation status in the mid th century to an industrial economy by the First Wold War, we can see that the agricultural innovations and inventions were actually one of the largest factors that helped bring about the Industrial Revolution.
Vast improvements in agricultural productivity had already previously transformed the way people work in Europe, releasing farmers for other activities and allowing them to move to the city for industrial work. The shift from hand-made to machine-made products increased productivity, directly affecting living standards and growth.
If previously one worker was able to feed only a fraction of their family, it was now possible for one person to produce more in less time to provide for the entire family. Technological advancement and increased productivity means major changes for careers today as well.
The world economy could more than double in size by due to continued technology-driven product improvements. According to the new World Economic Forum report , nearly million new jobs may be created by while 75 million jobs are displaced by AI, automation and robotics.
Manual, low-skilled jobs and middle-income roles such as accountants, lawyers and insurance clerks are the ones that will be affected the most over the next decade. The biggest issue here isn't necessarily that these jobs would disappear completely but the fact that polarization of the labor force becomes more significant. New skill sets are required in both old and new occupations. How and where people work will also continue to change.
There will be more demand for experts, whereas "regular workers" are at risk of having to settle for low-income positions. In general, innovation and economic growth increases well-being because living standards rise. According to the Brookings Institution , average life satisfaction is higher in countries with greater GDP per capita. However, not all of the benefits of innovation and growth are evenly distributed. Often, a rise in real GDP means greater income and wealth inequality.
In theory, income inequality isn't a problem itself except when the concrete purchasing power decreases. In practice, however, it does have a number of impacts on our society and collective well-being. As already mentioned, developing countries depend on innovation as new digital technologies and innovative solutions create huge opportunities to fight sickness, poverty and hunger in the poorest regions of the world.
Developed countries also rely on innovation to be able to solve their own problems related to these themes. What comes to reducing hunger, for example, agricultural productivity is critical in the developing countries where the next population boom is most likely to take place. Developing and sharing agricultural innovations such as connecting farmers to information about the weather, has proven to be an efficient way to help farmers stay in business.
Although this is just an example of how innovation can help people continue producing food, innovation provides endless other opportunities that can eventually help reduce poverty and hunger around the world. You probably already knew that The World Wide Web celebrates its 30 th birthday this year. According to the World Bank Annual Report , even among the poorest 20 percent of the population, 7 out of 10 households have a mobile phone.
This means that more people now have mobile phones than sanitation or clean water. Also, the mobile worker population is expected to grow from around 96 million to more than million by I nnovations in mobile technology such as voice control and augmented reality are enabling workers in completely new ways. Some companies, products and ideas revolutionize certain aspects of our lives more quietly. Sense-T is an intelligent farming initiative that utilizes sensor data to optimize farming operations.
Haven't heard of them? Neither had I. But they have a massive impact in the world of sensors and the internet of things. The company has office locations in 46 cities around the world.
And Feed Supper turns a casual dinner party into a philanthropic event to raise money to buy millions of meals per month to underprivileged children around the world. Innovation is vital in the workplace because it gives companies an edge in penetrating markets faster and provides a better connection to developing markets, which can lead to bigger opportunities, especially in rich countries. Innovation can also help develop original concepts while giving the innovator a proactive, confident attitude to take risks and get things done.
When a company has an innovative culture, it'll grow easily, despite the fact that the creative process isn't always simple. Tried-and-tested methods may be reliable, but trying out new things is a worthwhile experiment. Aside from products, innovation can also pertain to new services, business models, processes and functions. Companies such as Google and Starbucks have implemented game-changing innovations in small ways that add to the big picture.
They have their own language such as grande and venti. They even have their own payment app designed with PayPal. As a professor and trainer who teaches a series of innovation and creativity programs, I can tell you from observation that innovation is not for geniuses working alone.
It is a group activity and is definitely a teachable skill. Use the Internet and advertising sources such as the Yellow Pages to find out about their products, prices and operating culture. This can give you an overview of their selling points, as well as any areas you might be able to exploit. For example, if the competition is focused on value for money, you might want to emphasise the quality of your product or service.
Search for business listings nationwide on the YellowPages. You can find a lot of information about your industry on the Internet. Business and trade magazines will also feature useful articles. It's not enough simply to know who your customer base is. You need to communicate effectively with them as well. Communication involves not only listening to their needs but also actively observing their behaviour around current products and services and generating ideas on how you can make improvements.
Pooling your resources with your suppliers or other business partners will help to produce and develop creative ideas. Potential partnerships can also be developed through business networking opportunities. Next, consider what taking a particular innovative step could mean for your business. Ask yourself:. Suppliers, business partners and business network contacts can all make valuable contributions to the creative process, as well as providing support and encouragement. To get the most from them, you need to create an innovative environment and encourage creative thinking.
There are a number of ways you can fund your growth through innovation, either by using your own funds or tapping into external funding such as loans or equity finance. However, any route to external funding will need a high-quality business plan that describes your business and sets out detailed forecasts of where it's going.
Businesses often turn to their banks for a line of credit or loans for additional finance, depending on their borrowing needs. If you're willing to relinquish some control of your business to external investors, you could consider using equity finance.
The two main routes for this are investment from business angels and venture capital firms:. You may also wish to consider applying for a government program.
This will only usually cover part of your project, but you will retain control of the shares in your business. Small and medium-sized businesses can claim tax refunds and credits on appropriate research and development spending. Our information is provided free of charge and is intended to be helpful to a large range of UK-based gov. Because of its general nature the information cannot be taken as comprehensive and should never be used as a substitute for legal or professional advice.
We cannot guarantee that the information applies to the individual circumstances of your business. Despite our best efforts it is possible that some information may be out of date. As a result: The websites operators cannot take any responsibility for the consequences of errors or omissions.
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