Innovation is the process of translating an idea or invention into a good or service that creates value or for which customers will pay. To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products.
Innovation is important as it is one of the primary ways to differentiate your product from the competition. If you can’t compete on price, you’ll need innovative products and ideas to make your business stand out from the crowd.
Innovation in your business can also be driven by the amount of innovation your competitors are doing. Being first to market with a new product can provide you with a significant advantage in terms of building a customer base. It is difficult to compete if your products are seen as obsolete or out of date. However, when investing in innovation, keep in mind that many businesses survive by copying and adapting the innovations of others, and can benefit from your hard work.