Innovation has no longer been a passive word. What is innovation? Innovation means doing of something new for the first time from research and experiments. Baregheh et al. (2009) within the organizational context, defines innovation as:
Innovation is the multi-stage process whereby organizations transform ideas into new/improved products, service or processes, in order to advance, compete and differentiate themselves successfully in their marketplace.
Schumpeter defined innovation as the ‘process of creative destruction’ (1942) and identified innovation as the critical dimension of economic change. He argued technological innovation often creates temporary monopolies, provides right platform and necessary incentive for firms to develop new products and helps in processes innovation.
So, why do firms do innovation? Firms generally do innovation at manufacturing level and Innovation can be supply- pushed (based on new technological possibilities) or demand-led (based on market requirements and new markets). Increasing competition forces the firms to do innovation in order to stay in the market and compete with their rivals. As no firms want a negative profit and some firms want to dominate the market creating market power and innovators face unsubtle competition from the rivals in the form of imitation, which of course costs something to the rivals. International trade and globalization have made the world a global village and the world becomes a solid platform for competitors to face the global challenges.
The rising growth of global innovation often provides firms to widen their knowledge through global networks and international projects. It helps to access new knowledge, skills, customers, collaboration and technology. Technological innovation, no doubts, plays an important role and force the firms to become technologically independent in order to exploit better benefits than their rivals, and to meet difficult challenges in the global market.
Finally, How do the firms meet this global challenges? In order to sustain in the competing market, firms do find new sources of knowledge and they engage themselves through collaborators in specialist clusters and Research and Development to create new knowledge with new ideas. And it does have a significant impact on future pattern of growth both planned and usual growth.
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