E-Book Examines the Economic Value of Innovation

Learn what it takes to be an innovator

10 July 2009

What exactly is innovation? Do you have what it takes to be an innovator? Does your organization nurture innovation or inhibit it? Answers to questions like these can be found in the new IEEE-USA e-book, Doing Innovation: Creating Economic Value.

This is the first of four volumes in the new Perspectives on Innovation series of e-books, written by Gerard H. (Gus) Gaynor, Life Fellow and president of the IEEE Technology Management Council. Gaynor is a retired director of engineering for 3M Co., in St. Paul, Minn., where he worked for 25 years. He has also authored books and articles about innovation, and he taught courses on the topic at the University of Minnesota, in Minneapolis, and the University of St. Thomas, in St. Paul.

Despite the great deal of information published about innovation, Gaynor still finds it a topic of great interest though one that is usually misunderstood.

“People don't really understand what it takes to be an innovator,” says Gaynor. “Companies have to have courage to sponsor it.”

He tackles the ambiguities surrounding the topic, emphasizing that innovation is more than just having new ideas. He illustrates this with a formula first presented in his book Innovation by Design [American Management Association, 2002]:

Innovation = Invention + Commercialization or Implementation

The key to innovation lies in the second term on the right-hand side of the equation. “If there is no economic value, there is no innovation,” Gaynor says.

WHAT IT TAKES The innovation process begins with raw ideas, which “provide no benefit, unless pursued toward some end,” Gaynor explains. Ideas are then transformed into concepts, a process that requires a lot of thought and exploration because “this transformation is not solely about technology or marketing but rather about the business that will arise from the concept.” Invention then follows, requiring testing to create a finished product. Finally—at the end of the process—comes innovation.

Although some innovations become successful products, the economic value of innovation isn’t always direct.

“When auto companies started putting in seat belts, there was a social value, certainly,” he says. “But by reducing highway deaths and hospitalizations, it generated economic value.”

Organizational innovations are also valuable. “Innovations within an organization that are not commercialized may still provide a significant benefit,” he says. “Departments that apply innovative processes to provide significant savings to the company are one example. To this extent, no organizational unit can be excused from focusing on innovation.”

The book also examines the various types of innovation, from incremental innovation, which consists of refinements or simplifications, to architectural innovation, which looks at systems and processes, to disruptive innovation, which appeals to early adopters attracted to new products before they become breakthroughs.

“Developing ideas into valuable new concepts is tough and takes a lot of work,” says Gaynor. “Not everyone can do it.”

Finally, Gaynor discusses how innovation takes place and how certain environments can either nurture or inhibit it.

“Innovation involves risk taking,” writes Gaynor. “Innovation involves commercialization or implementation of an invention (something new), but from a systems perspective. The process is not simple.”

MORE TO COME There will be three more books in this series. Developing a Workable Innovation Process is due later this month. Fostering an Innovation Culture and What It Takes to Be an Innovator will follow later this year.

Doing Innovation: Creating Economic Value is available for the IEEE member price of $9.95 ($19.95 for nonmembers).

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