The Importance Of Innovation

This essay will examine to what extent that the claim ‘the key to being an innovative organisation is R&D – more expenditure equals more innovation.’ Calculated in-depth research will be carried out before the research is presented. Analysis will be then linked with theory, using real life examples to strengthen the points previously made. The essay will be concluded with evaluation of findings.

(Tether & Lodorfos, 2011, p.3) describe innovation as the ability to visualise connections, spot opportunities and to then take advantage. Going onto say that innovation is not just about opening new markets, it can be used to create new or improved methods of service, production, product etc. Furthermore (Tether & Lodorfos, 2011, p.3) state that there are few limitations as to areas which can be affected by innovation, from technology to production, public to private and product to service, innovation creates success and competitive advantage, innovation is therefore important, consistently attributing to characteristics of success, strong growth and increasing market share and profitability. We have two types of innovation, radical and incremental, where radical is doing something different and incremental is doing something you already do but better (Tether & Lodorfos, 2011, p.23).

Whilst most organisations have comparatively modest life spans there are some, which have survived at least one and sometimes multiple centuries. Looking at the experience of these ‘100 club’ members, firms like 3M, Corning, Procter & Gamble, Reuters, Siemens, Philips and Rolls-Royce – we can see that much of their longevity Is down to having developed a capacity to innovative on a continuing basis (Tether & Lodorfos, 2013, p.70).

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...e part including leadership and the culture of the organisation. So in reply to the question the answer is no, the writer doesn’t feel that the key to being innovative is R&D however it plays a vital role.

When analysing the claim ‘more expenditure = more innovation’ the writer feels that this is very broad, however the writer feels that in many cases more expenditure does equal more innovation but in other cases it doesn’t. The writer feels it very much depends on each specific situation, for example Steve Jobs proved that money isn’t essential in order to innovate as he took a SME to a large organisation purely through hard work and a motivated workforce. But a company such as Adidas who has vast expenditure outlay in marketing, advertising, production and R&D are thought of as in innovative company so this backs up the claim ‘more expenditure = more innovation’.