Lately I have been seeing many blog posts and articles heralding the death of the term innovation. I am in Asia as I write this and through conversations with locals and Western business people I have developed some interesting insights on this question.
The first is quite basic. If we look at the etymology of the word it means to renew, restore or change. Many of the criticisms charged against the term imply that many products sold today are not ‘innovations’ (e.g. new). However, by the very definition of the word we can clearly see there may be nothing ‘new’ involved in innovation as long as the product is meaningfully changed or renewed.
Another point has to do with how the term is used.
Companies with a true culture of innovation will constantly seek ways to ‘change or renew’ products and business models to significantly add value to their clients. It is the definition of incremental value which dictates whether the change or renewal is truly innovative.
I do agree with those who say the term innovation is overrated, especially when it is used by CEOs who say that innovation is a component integral to their corporate strategies at a stockholder meeting – but their product portfolios do not reflect such claims.
Thirdly, especially in Asia there is the adage some of my Associates use ‘copy or die’ rather than ‘innovate or die’.
The ability to copy and manufacture cheaper than the West has built powerful economies, an ascendant middle class and modern civil infrastructure, which is extraordinary. I would argue the Asians have innovated substantially. They add value to Companies by producing goods at a fraction of the cost using technology and people power at reasonable quality that Western consumers will buy.
Before anyone starts talking about companies that exploit workers, the Asian workforce is much better off financially with post-global outsourcing. Western companies innovate by designing and developing products at home, and Asian companies innovate by producing more efficient / cheaper means of production and replicating the product for sale in other markets.
Thus, we see both ends of the innovation spectrum, one knowledge-based, the other production-based.
Asia is however moving away from the ‘copy and advance’ game and producing innovative home grown technologies (especially in power generation, manufacturing and materials science).
These are the innovations I am more concerned about for the West.
These are not mere changes, rather state of the art advances.
However you wish to define innovation, it is not overrated – it is the bedrock upon which value is created – and that value moves economies and profits forward.