The Inclusion of Customer Information - Essay Example

Download file to see previous pages In literal terminology, the term ‘innovation’ refers to the creation of a product or service from an idea or invention; such that a demand is created for that product for which people are willing and able to pay (McKeown, 2008). To refer to an idea as an innovation it must be economically feasible and cater to a certain need of the market. It focuses on the generation of value which is either different or greater than what was initially attained from the resources applied. It requires the utilization of information to develop acceptable ideas; imagination is a must to give it an edge over existing products, and the authority and ability to take the risk of initiating the developmental process is a must. As innovation occurs, which is the outcome of creativity (Jolly, 2003, 5), it tends to reduce the gap present between the expectations of the consumers and the actual availability of the products in the market, as this gap reduces, a firm moves higher up on the efficiency scale (Business Dictionary, 2010). As the world moved into the era of globalization, the interaction between different segments of society increased significantly, resulting in continuous changes in the innovation process, and therefore in contemporary times, Innovation can be broadly categorized into two major forms: Open innovation and closed innovation.

CLOSED INNOVATION
Chesbrough (Chesbrough, 2003) coined the terms closed and open innovation to clarify the distinction between the evolution from one way to another: the basic fundamental feature of the concept of ‘Closed innovation’ pertains to the establishment of control in the innovation process, it focuses on keeping the entire process strictly internal, and the abolition of any external factors attached to the innovation process, owing to the conservative belief that reliance on outside sources could prove to be detrimental for the firm since there is no guarantee of quality, availability, and sufficiency of an external source, hence it stresses on self-reliance and the development of innovative ideas entirely within a firm. ...Download file to see next pages Read More