Technological innovation: Definition

Technological innovation is a fundamental component of progress and is the main determinant of human development. It can be defined as “a process of broadening human possibilities, enabling individuals to enjoy a long and healthy life, to be educated and to have access to the necessary resources at a dignified standard of living”.

It is a process that has undergone a strong acceleration in many countries of the world since the industrial revolution, and the affirmation of the capitalist system in many countries.

In fact, the capitalist system has proved more capable than other systems of amplifying the formidable creative power of the human being, channeling it towards more useful uses and uses. This has allowed the output created by different human communities to grow much faster in recent centuries than previously, thanks to the profound technological innovations which have led to a general improvement in living conditions in many countries, and have made it possible to increase the productivity of human labor in many sectors, also drastically as in the case of agriculture where, thanks to the introduction of new tools and machinery such as the tractor, the amount of land worked today by the individual farmer is far greater than what was possible to work through the use of more primitive technologies and animals.

The important thing to clarify at the outset is that when we talk about technology and technological innovation, as can also be seen from the example given above, we are not referring only to the sectors related to information technology and to the latest generation of electronics. In fact, technology is a vast area of research that spans various disciplines and has as its object the study of the application of technological tools for concrete uses, to the point that technological innovation can be defined as “creation of new knowledge applied to the solution of practical problems”.

The importance of the practical usefulness of inventions and new knowledge is very important and is the main factor that allows the invention to be transformed into technological innovation. Precisely, in order for the invention to become technological innovation, it is necessary to associate the trait of utility with the invention, which allows the invention to be exploited commercially as it is perceived as useful by individuals.

The innovation can be distinguished in 2 main types based on the motivations that carry the enterprise to pursue a determined process of innovation, these are:

  • Product innovation, or innovation to increase sales;
  • Process innovation, mainly aimed at reducing production costs.

This distinction does not tend to influence the final consumer in particular since in both cases it will benefit, thanks to greater convenience or higher performance.

The role of enterprises

As mentioned in the previous section, innovation is often the determining factor in the competitive success of an enterprise as it allows to create “competitive differentiation” and increase competitiveness, also favoring access to new markets or market segments. In this way, it becomes much easier to maximize profits, and as a result, in many cases, businesses become the real basins from which innovation originates.

On the contrary, a closed market where competition is low or even zero, as in the case of a monopoly, the stimuli mentioned above are for the most part lacking, often condemning the sector or the entire economic system to slow growth and a situation of general backwardness compared to the rest.

Problems and Risks

However, to be fair, while on the one hand the social impact of innovation can generally be regarded as positive because it can give more people access to a wider range of products, a better way of life through scientific and medical progress, a simpler life through progress in communications and transport, it is fair to say that not everything is positive and that innovation, especially if not developed and supervised properly can lead to damage and problems not irrelevant.

The environmental impact is one of the main problems also present in the public debate, and rightly so, the pursuit of an innovation that leads to sustainable development and therefore not only to make processes more efficient and economic, but that preserves and, if possible, improves the living conditions of people and the environment in general. Other problems caused by innovation are excessive traffic and overpopulation in cities and in general urban areas.

It is important to realise that it is important to pay attention to what is being done and to what innovation and development propose, because innovation must, as I said earlier, be careful and evaluate all the externalities that will have before being launched on the market. Certainly, with a more attentive public opinion and with greater attention from the institutions, companies will be increasingly careful to put innovations of this kind on the market, thus creating a considerable benefit for all.

The strategic innovation process

Innovation is not a random process, especially when it comes to business, in fact pursuing technological progress in a sporadic or confused way tends to result in a waste of resources, leading the company to lower its level of efficiency. For this reason, companies try to follow a series of steps or steps that allow them to succeed in the innovation process, the 3 main steps are:

  • The identification of market dynamics
  • The formulation of an innovation strategy
  • Implementation of the identified strategy

These simple but fundamental steps characterize the majority of innovation projects within companies, where it starts from a wide analysis of the market and its dynamics, capturing the needs that can be met. Subsequently, a real strategy is created that will allow, through the implementation of the same, to obtain innovation.

To allow the process to achieve what is expected and therefore to create innovation, it is necessary that the management of the company has an in-depth knowledge of the dynamics of innovation, that is able to conceive a structured and coherent innovation strategy, and that it can adequately formulate the processes of implementation of the innovation strategy.

The Sources of Innovation

Basic innovation has only one source: the minds of individuals, so we could say that human creativity is the basic “raw material” for achieving innovation. However, individuals alone can do very little, and therefore, when we talk about sources of innovation, we look at individuals but also at the various organizations and groups that, with different roles, contribute to innovative processes.

In detail, innovation can arise from many different sources and generally depends on the relationships and links that are established between them. There are two types of actors:

  • Individuals, in particular inventors, characterized by a strong passion and stimulus towards research and innovation and customers, mainly interested in having functional tools, thus proposing ideas to improve the tools that commonly uses;
  • Complex bodies, such as companies, universities, research organizations, non-profit organizations, private foundations, etc.

It will then be the relationships between actors to allow or not an adequate level of process optimization able then to lead to technological innovations able to succeed in the market.

From Creativity to Innovation

As was mentioned in the previous sections, creativity and innovation are two distinct concepts, in fact, creativity is the first step in a process that can then lead to innovation.

In the “company context” creativity means a set of characteristics of the individuals that make up the organization, such as:

  • have an original thought;
  • persuasive capacity;
  • general knowledge (excessively specific knowledge may harm the creative process);
  • independent thinking and the ability to make decisions independently;
  • be able to distinguish between priority and secondary problems.

The creativity of an organization, in addition to the factors listed above, relating to individuals, depends also on the creativity of the individuals who compose it and on the social processes that influence the interactions and the mechanisms that are established within the organization.

In fact, the creativity of an organization is not the simple sum of the creativity of its members, but the quality of individuals can be enhanced or reduced to a minimum if the environment is not able to create the synergies and mood necessary to achieve the best.

In this respect, it is common to see companies that, in order to develop an innovation project, establish forms of collaboration with customers, suppliers, universities, producers of complementary goods and in some cases with competitors, thus exploiting the synergies that can be created by collaboration with other realities and different subjects.

Science-push and Demand-pull approach

There are in fact two types of approach from which innovation can arise at the level of enterprises:

  • Science-push approach, where the process starts from a new scientific discovery, which then leads to an invention by an entity outside the company or by the company itself, which is then followed by a phase of production and marketing and then by marketing, to disseminate innovation to the market;
  • Demand-pull approach, in this case, the process starts thanks to a stimulus coming from the market, in particular from problems or suggestions of the customers, that lead then to the location of a solution and therefore to an invention, followed by the production and marketing stage. With such an approach, knowledge of the market is the main element that guides the business development process.

Anyway, regardless of the type of approach used, a constant in the innovation process is that, to move from creativity to innovation, it is essential to have an idea, have the economic and technical resources to achieve it and a good commercial capacity, able to make the new product available on the market.

Types of R&D

In addition, R&D (Research and Development) in enterprises can be grouped into three types:

  • Basic research, or research aimed at deepening knowledge of a given area;
  • Applied Research, a research process with the aim of giving a solution to a specific question pertaining to a specific area of study;
  • Development, a process that has the objective of giving a “market” answer, that is the definition of a new product or a new process aimed at satisfying a particular need.