Need for Innovation: Facing Extraordinary Circumstances

2020-05-21 | Ink it

Alejandro Ramírez Flores | CEO at CANIEM

As early as the first half of the twentieth century, Schumpeter stated in Theory of Economic Development (1944) that the modification of products (or their manufacturing processes) acts as the driving force that leads to economic transformation, and, in consequence, to social transformation. These modifications were termed as innovation. Therefore, we can conclude that innovation can be regarded as an economic phenomenon. For example, an invention won’t be classified as innovation until the moment it is introduced to the market, otherwise it is, by itself, a mere invention.

Peter Drucker in his work Innovation and Entrepreneurship, suggests seven basic sources for innovation: 1) The unexpected, 2) the difference between what is and what “ought” be, 3) need as source of innovation,, 4) changes in market or industry structures, 5) changes in demographics, 6) changes in perception and meaning, and 7) new knowledge (scientific or social innovation).

COVID-19 pandemic has put on the table many of the sources mentioned by Drucker: we are facing a forced change in habits (including consumption habits) and a sudden breakdown of the existing market structure. The publishing industry is going through adjustments that do not arise from technology itself; however, technology plays an important role as these adjustments deal with changes in social conduct. Although the most visible aspect of innovation is the release of new products, we are now facing a need for different kinds of innovation: we need new business structures, manufacturing processes and commerce strategies for both, traditional and new products.

In all its modalities, innovation is a permanent end that stimulates development and competitiveness. It is when innovation deals with technological development that it becomes a means, not only to daily life activities, but also to itself. This scheme highlights the dual nature of innovation as both, means and ends.

Innovation has turned into an essential ingredient in the development of any business sector and a mandatory component in the assembly of one of the foundational social aspirations: prosperity.