Innovation in a market economy - Essay Example

 Innovation in a market economy Innovation is what gives life to a business in a market economy. The businesses that never get going or if they do, then fail or fail later under pressure of a changing economy or marketplace have all failed to innovate appropriately. What is appropriately? "Necessity is the mother of invention." This is all very Darwinian. Only the fittest survive. Fit means passing the test of a changing marketplace which means learning that what had value yesterday may be, without innovation, un-competitive today. It means learning that the greatest potential value is almost always in something that is presently unknown. (Newham, 2007) Creation of a new process or device with the help of experiments and studies can be termed as innovation. Innovated product must be a new one with respect to the existing ones. For example, we cannot say that Columbus invented America since America was there even before Columbus reaching there and actually Columbus was the first person who discovered it. On the other hand we cannot say that Marconi discovered radio since radio and wireless communication was an entirely new thing to the world at the time of its invention. Thus innovation and discoveries are two terms often misused by people without knowing the actual meaning of it. In organizational world, we can see leaders and followers. Leaders always look for new ideas and concepts in order to develop them into proper shape for the growth of the organization and the society. On the other hand followers always try to imitate the ideas generated by the leaders in order to reduce their expenditure on research and development. Some people will try to incorporate new features to the product or services innovated by others. For example, when Wright brothers invented aeroplane, it was not in the present form or shape. Lot of modifications has been done on the earlier version of the plane invented by Wright brothers to make it in its present form. Same way when Carl Benz has invented car, he would not think that a car with the present features like GPS, Airbags, Hydraulic breaks etc will be on course in near future itself. Thus innovation is a continuous process everywhere in the world. Innovation has no boundaries and the scope for new products and services are increasing day by day because of the advancement in technology and the changing life styles of the people. Some people will make entirely new products or services where as some others try to incorporate new ideas and features to the existing ones. In any case, the human generation is indebted to innovation process and the innovators for contributing such wonderful products and services to the human world. Importance of innovation to organizations Organizations cannot exist in the market with the conventional products alone. For example, think of a situation in which Microsoft sticking with its old operating system Windows 3 series alone at present. Everybody knows that Microsoft was able to keep its monopoly in the software industry purely because of their ability to innovate news products or incorporate new features to their existing products. Thus we got Windows 95, 98, 2000, XP, Vista like updated versions of windows. It is not possible for Microsoft to accommodate the requirements of the current world using their older versions of operating systems. The current facilities like video conferencing, video chat, high resolution graphics processing, internet, e-mail etc may not run its older versions of Windows. Thus innovation makes an organization capable of meeting the present challenges by updating their existing technologies. Innovation is needed even in formulating strategies. Same strategy may not work everywhere even if the product is the same. Parker Pen Company has tried to implement same marketing strategies to market their writing equipments all over the world at the beginning of their international campaign. They thought same product needs same marketing strategies everywhere. But they failed miserably because of the above strategy. “Product may be the same, but may be different”, Parker Pen Company failed to recognize the above fact. “The idea of selling pens the same way everywhere did not sit well with many parker subsidiaries and distributors. Pens were indeed the same, but markets, were different. France and Italy fancied expensive fountain pen while Scandinavia was a ball point market” (Marketing across cultures, p.195, n.d) “The ability to define and develop new products and services and deliver them to market is the fundamental source of value creation in companies and an important enabler of competitive advantage” (Bordia, Kronenberg & Neely, n.d, p.1) The new product developed must enter the market at the appropriate time in order to succeed. For example, Apple has developed a new product, touch screen phones called iPhones. It actually conquered the cell phone market. Competitors like Nokia and Samsung also introduced similar phones in the market very shortly. But nothing succeeded like the Apple’s iPhone. At the time of invention of the mobile phones, it was designed only to talk with others using wireless technologies. But at present, cell phones are used to surfing the internet, video chats, video recording and photography purposes. A mobile phone with only the talking facility may not move in the current market. The products must be filled with new features periodically and the updating process is important in the business world. Product life cycle and life cycle graph The term product life cycle denotes a new product’s introduction to market, its growth and maturity and also the possible decline in the market. Product life cycle start from the time of its introduction and ends at the time when its production has been stopped or it is disappeared from the market. Every new product or service has a life period. It is not possible for a new product or service to stay in the market for ever in its present form. For example, radio was a popular medium of communication when it first entered the market. But the introduction of television and internet related technologies have effectively caused decline on radio’s popularity. (The product life cycle, 2007) Product life cycle-History of Radio During the 1860s, Scottish physicist, James Clerk Maxwell predicted the existence of radio waves; and in 1886, German physicist, Heinrich Rudolph Hertz demonstrated that rapid variations of electric current could be projected into space in the form of radio waves similar to those of light and heat. Guglielmo Marconi, an Italian inventor, proved the feasibility of radio communication. He sent and received his first radio signal in Italy in 1895. By 1899 he flashed the first wireless signal across the English Channel and two years later received the letter "S", telegraphed from England to Newfoundland. This was the first successful transatlantic radiotelegraph message in 1902. The first time the human voice was transmitted by radio is debatable. Claims to that distinction range from the phase, "Hello Rainey" spoken by Natan B. Stubblefield to a test partner near Murray, Kentucky, in 1892, to an experimental program of talk and music by Reginald A. Fessenden, in 1906, which was heard by radio-equipped ships within several hundred miles.Radio technology has grown significantly since its early development. In 1947, Bell Labs scientists invented the transistor. In 1954, a then small Japanese company called Sony introduced the transistor radio (Bellis, 2009) . The above history of radio can be summarized in a product life cycle graph shown at the top. The radio wave technology has been predicted in 1860’s and there after it has started to grow. The first radio signal has been sent and received in 1895. The radio technology has grown rapidly since then and in 1947 Bell lab created the first transistor followed by the introduction of transistor radio by Sony in 1954. From there onwards the new product radio has rapidly developed and became popular all over the world. Radio has conquered the world of communication till the introduction of television and internet. But even then the transistor radio was a house hold item even into the 1990’s. But thereafter the popularity of the radio has started to decline with the increased popularity of color and electronic television and the internet related computer technologies. Intellectual property Intellectual property (IP) refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce. Intellectual property is divided into two categories: Industrial property, which includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and Copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs (What is Intellectual Property?, n.d) Intellectual property can be of four different types; patent, copyright, registered design and registered trademark. Patent offers 20 year monopoly for the new products or services. Patent rights are provided only in the country where they have registered the patent. Patent prevent others from the invention made by the company. For example, Basmati rice, sought-after for its fragrant taste, was developed by Indian farmers over hundreds of years, but the Texan company RiceTec obtained a patent for a cross-breed with American long-grain rice. The battle over who controls the world's food supplies has escalated dramatically with the Indian government launching a legal challenge in the United States against an American company which has been granted a patent on the world-renowned basmati rice” (Browne, 2000) Copyright provides exclusive rights to creative individuals for the protection of their literary or artistic productions. It is used to give creators of literature, art, music, sound recordings, films, broadcasts, etc. economic rights to control the use of their material – make copies, issue copies to public, perform in public, broadcast and use on-line. (Dr. Reyes, n.d) Registered design provides exclusive rights even up to 25 years. It can be the appearance of a whole or a part of a product. Colors, textures, and shapes used in a particular design can be registered as a design and nobody can imitate the registered design for at least 25 years. Thus the registered design will keep the identity of the design for 25 years. If the design has not been registered people can imitate it in order to cheat the consumers. Registered trademark is a distinctive name, mark or symbol identified with a company’s products (Dr. Reyes, n.d). For example, Kentucky fried chicken or Coca Cola are using registered trademarks for their advertisement and branding purposes and hence it is difficult for the competitors to imitate such designs as such. Conclusions Innovation is an essential process for an organization to stay in the market as a competitive one. The organization must be capable of innovating new products or services or they must incorporate new features to their existing product or services based on the requirement of the developing world. Innovation is a continuous process and nobody can say that the boundary has reached and no further innovation is possible. Every new product and services have a certain life period. It is not possible for a product to stay in the market for ever in its present form. Product life cycle has four different stages such as introduction, growth, maturity and decline. Intellectual property rights are safeguarding a person’s or organizations new product. At present four types of the intellectual property rights are there; patent, copyright. Registered design and registered trademark. References 1. Newham Chris (2007), Leadership Questions and Answers, Retrieved on August 4, 2009 From http://leadershipqanda.blogspot.com/2007/04/what-is-importance-of-innovation-in.html 2. Marketing across cultures,(n.d) Retrieved on August 4, 2009 from http://www.sam.sdu.dk/undervis/90434.E04/Spoergsmaal_til_Case_Tekst_Parker_Pen.pdf 3. Bordia Rakesh, Kronenberg Eric & Neely David, (n.d),Innovations’ OrgDNA Retrieved on August 4, 2009 from http://www.boozallen.com/media/file/145808.pdf 4. The product life cycle (2007), Quick MBA, Retrieved on August 4, 2009 from http://www.quickmba.com/marketing/product/lifecycle/ 5. Bellis Mary,(2009) The Invention of Radio, Retrieved on August 4, 2009 from http://inventors.about.com/od/rstartinventions/a/radio.htm 6. What is Intellectual Property?(n.d), Retrieved on August 4, 2009 from http://www.wipo.int/about-ip/en/ 7. Dr. Reyes Jose, (n.d) Module Ethics, Environment and Innovation 6ME011, University of Derby, www.derby.ac.uk 8. Browne Anthony (2000), "India Fights U.S. Basmati Rice Patent", Retrieved on August 4, 2009 from http://www.biotech-info.net/basmati_patent.html 9. Read More