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In what ways could a business improve their innovation capabilities? What obstacles may they face? Give specific examples and support your answer with relevant theory.


“If an entrepreneur wants to make money then it’s impossible to make environmental sustainability a priority.” Critically assess this statement with reference to examples and relevant theory.

Different Levels of Innovation in Business

Improving innovation capabilities in an organization is a lengthy process as research and development of any product or a service innovation takes time. Business is a complex function as it includes several processes. Innovation is one of them. The revolution only happens when the business survives with the competition and sustains the economic growth. This particular text discusses the inevitability of innovation in business and why does it needs it. With relevant examples, it explains how innovation works in reality (Dutta, Lanvin and Wunsch-Vincent 2012). The different kind of innovation what are the drivers of creativity that enhances innovation in organization. The global aspect of innovation and national innovation drivers, are also discussed in below. The capability of innovation and implementation model in the quintuple helix model is discussed and how does it applies to the different factors in motion like investment growth, the sustainability of the resources used and other factors. Further there is another important theory of open innovation is discussed. The functionality of this trendy theory is also discussed. The factors affecting creativity and that leads of innovational changes in organizations is also discussed (Cleland et al.  2013). Innovation is a broader aspect of creativity. One cannot be fulfilled without the other. The more creative induced environmental factors the more the innovation. The most innovative company (calculated based at the rate) is Google, established at 1991. However, the rate at which they are innovating their product range could not be ignored as the nature of their product development program.

Innovation is a process, which gives shapes to ideas generated from brainstorming or making it a reality. There are two types of innovation at initial stage, evolutionary and revolutionary. Example of Apple’s computer against IBM’s computer. Both are revolutionary but Dell’s cheaper imitation of computers is evolutionary, which has a lot of risk involved in the area business.

The reasons why innovation is needed in the business is the key outcomes that matters to people who is involved in the business. There are many individuals are included in the business. These are the internal and external stakeholders of the organizations (Bradley et al. 2012). To increase the return on investments, attract the shareholders as well as the customers, innovation is necessary. Responding to the rapid growth and development of the world, innovation also acts as stimulation for a company.

Innovation can be of four different levels. That are Individual; Society; state; Business

The main area focused in this text is the individual and business. Individual creative thinking and risk taking percentage evaluates the level of creativity in an individual. This individual level creativity can be used in the organization level also (Markus, M.L and Loebbecke 2013). The few steps that enable the company to use the creativity of an individual are - Trust management in the employees ; Media of sharing knowledge ; Environment that encourages sharing ideas ; Good integration and communication strategies; Idea management tools utility; Recognition of employees that voluntarily contributes to the innovation process.

Individual and Business Level Innovation

Competitive organization is always the first to take advantage of their creative employees’ pools. Forbes ranked Tesla motors the most innovative company in the world. When interviewed about the innovation drivers they highlighted the four points in the statement. That are Challenging orthodoxies; Leveraging resources including people skills ; Harnessing the society trends ; Understanding the customer core needs.

Improving innovation capabilities in business - There are three types of innovation in business. Process innovation this innovation happens when there is a significant problem in implementing a strategy in action. The method of implementing the strategy is known as the process innovation (Poutanen, Soliman and Ståhle 2016). Process innovation is more affective and useful for internal customers as well as the employees’ business partners, end users and actual customers and is based in key performing indicators. It adds value to the product or service that is significant to the key performing indicators (Bradley et al. 2012). Ford and Zara are the most known among the process innovative implementation success company. Zara used innovative thinking in marketing their products in verbal communication method and manufacturing process. Ford used the innovation in design and in assembly lining process(Dutta, Lanvin and Wunsch-Vincent 2012). It enabled them to make a powered vehicle in 12 hours 90 minutes. It is also famous for the innovation in first moving assembly line and production speed in fast moving consumer goods.

Product innovation can be of different types like introducing new products, improving core products, enhancing existing product features and others. The most innovative products given by the most competitive companies are Samsung, Nike, Unilever, Apple Inc. Samsung is in consumer electronics and is known to launch most innovative range of products in market. Apple’s innovation in the functionality of their product has given them a huge advantage in the competitive consumer electronics world (Howells and Bessant 2012). The more of innovation included the more of competitive advantage in national and global market economy level.

Business model innovation is a lengthy process that can be in any step or on a function in a process. Like innovation in key resources, partners, cost and revenue structure and other performing levels. It is also known as white-collar efficiency of organization. This process of business model innovation needs to be considered when there is decline in industry margins, evidence of over served customers, opportunities coming from outside industry customers and of course the degradation in innovation metrics (Du, Leten and Vanhaverbeke 2014). This process looks at the strategic point, reviews its functionality, and by innovation recombines the scope. Innovation through visual management methods is a new tool to clarify the knot points and improving innovation process. Business model innovation is increasing and creating value to the customers and moreover, increasing Unique selling propositions. The most effective outcome of business model innovation is the growth and sustainability of business (Rahman and Ramo 2012). The companies that are seen to be surviving for long years are the ones using it properly. The most known example can be IBM. This giant organization has managed to change its model from time to time and enhanced it customer offers from mainframes to personal computers while making a stop to the business of hardware components of computers (Poutanen, Soliman and Ståhle 2016). Wal-Mart’s has done fundamental changes to a networked enterprise structure and their value-chain analysis.

Types of Innovation in Business

National level research and productivity are based on the innovation capability of a country. The research and development infrastructure of a country is dependent upon some factors of the country. There are three different stages of national innovation capacity index. They are ideas driven endogenous growth, national and literature innovation system and third is the cluster based theory of national and industrial advantage.

The capacity depends upon the countries common pool if institutions, resource commitments, government policies on innovation, protection support laws and regulations, innovation orientation groups, industrial innovation structure, the quality linkages. The global driver of innovation is the competition between the countries (Drechsler and Natter 2012). The more the growing rate the more innovative the country is. Therefore, the drivers of growth are the main reason for the country. Asia is has ranked to be the more of a contributing factor of global innovation, though the gross domestic product is less than other participating national is (Howells and Bessant 2012). The Chinese is supposed to be fuelling changes and secure the tactical and strategy advantages of competition of growth. Corporate control of intellectual property and patents, IPR protection are long gone in the new century (Verbano, Crema and Venturini 2015). The companies that make good profit from international market are the ones who have innovated beyond the trends that go on the society. Academics related careers often follow a disciplinary logic;which leads to inserting and introducing interdisciplinary to organizational networks that requires to innovate and to re-invent the traditional academic career logic. The organizational framing of transdisciplinarity creates even further challenges(Dutta, Lanvin and Wunsch-Vincent 2012). 

The triple helix model of innovation focuses on the university-industry-government relation. The quadruple helix, which is an addition to the triple helix, is the culture and media based civil society. Knowledge economy is an enhancement of knowledge innovation, which leads to the transition in the whole economy (Felin, and Zenger 2014). Further, the quintuple helix model here suggests that the sociological transition in ecology, knowledge and innovation is creating synergies among the economy, society and democracy.

The sustainable development of and the feasibility of innovation is in direct proportion with each other. The failure of sustainable development example is the effect of global warming and drawbacks or one can say the failure to plan for the sustainable development (Gur?u, Lasch and Dana 2015). Triple helix is possible in democracy but triple helix theory is also possible in the area of non-democracy. This model is also a background providing for quintuple helix model. The theory of this are divided in some steps. The investments flow in the education system that leads to growth and sustainable development are done through processed innovation. The input of investments creates new impulses and suggestions for knowledge and creation in the education systems (Sapra, Subramanian and Subramanian 2014).

For example, investments enable the students and scientists to develop new equipments and that goes to building opportunities for higher level of research and innovation. The next step is to increase human skills, knowledge to advance the knowledge economy as the input of implicit knowledge is very rare, and which facilitates the economy for further innovation too. Then the next step is to look for sustainability factor in the output gained while having development (Felin, and Zenger 2014). The lesser the exploitation, destruction, contamination of natural environment the more it strengthens the economic capitals. The regenerative technologies, which contribute to the sustainable development and capitals, can be useful for this purpose (Rahman and Ramos 2012). The greener the lifestyle of people the greener subsystem of media based and culture based economies. The collective knowledge input in the area of political aspect of economic field develops innovation. Exchange of knowledge leads to strive for knowledge, hence to the creativity and innovation in subsystems of economy (Bradley et al. 2012).

Improving Process Innovation

Drawbacks and challenges of information -There can be many challenges in innovation. As an example, we can say that he most affective disadvantage of innovation is the global warming effect of industrial revolution. The challenge of innovation again can have two constraints (Giannopoulou, Gryszkiewicz and Barlatier 2014). The financial constraint, having to bear the cost of research can be destructive for some companies. The industrial decline is also a constraint to innovation (Cheng and Chen 2013). The next constraint is the economical or environmental challenges in the path of innovation. Environmental challenge as energy capacity both natural and produced is something that can be avoided or ignored (Giannopoulou Gryszkiewicz  and Barlatier 2014). The political drivers and democratic reform of the countries are some of the challenges that can be dealt with the change of society mindset. However, it poses itself as a challenge that needs a collective reform. Security and safety of innovation capabilities are also a major concern for research and development functions (Du, Leten and Vanhaverbeke 2014). For example, the automation in the trade industry has changed the labor workforce scenario. This is known as a paradigm shift in the history of labor industry. This can also be known as an adverse effect of technological shift in the industry. The unseen long term effects of technological innovation in crops. Misuse of plastic and non-disposable material threatens the environmental sustainability (Drechsler and Natter 2012).

Benefits of innovation are the developed countries of the world’s economy are the one to enjoy the benefits of innovation (Kovacs, Van and Cassiman 2015). The more optimized usability of resources, efficiency in productivity and reduction in inequalities between the urban and rural civilization, whereas the undeveloped or the developing economies of the world are facing different problems due to non-existence of innovation (Carayannis, Barth and Campbell 2012).

The world has become borderless after globalization. The reach of individuals has also expanded beyond imagination and thus the world has become flat, in words of Thomas Friedman globalization 3.0 (Lotz H.M. and Van 2013). Therefore, the challenge has also increased for business organizations exploring international market. These challenges come in the form of competition. The expansion of market coverage increases the durability of the business but with that comes threats of competition. The collaboration involves adapting to the new economies with the help of partners (Verbano, Crema and Venturini 2015). The global partner’s collaboration techniques are venturing, percentage partnerships, franchising, joint stocks and strategic or financial collaborating. It increases the business value in the eye of the consumers and enriches the culture in the internal organizations, thus increasing the employee satisfaction of the world (Podmetina et al. 2014). The social media collaboration always leads to betterment of futuristic strategies and governance of an organization(Hill Jones and Schilling 2014). With the help of strategic partners, the company not only grows in profitability but in the context of revelations of futuristic goals. In this era of information based and performance driven economy, the digital collaboration tools and techniques are valuable. The whole business variation comes to two types of criteria of business (Nidumolu, Prahalad and Rangaswami 2012). First is manufacturing and the other is outsourcing. The manufacturing organizations develop itself in the backward integration as it gives the advantage of sourcing materials and conglomerate-specific efficiency. However, the other kind must have affianced in the supply chain management. Firms have become specialized in product creation and process intervention. Information has become needed ubiquitous (Santos-Vijande 2012). The focus on greatest rate of return has revolutionized some activities and investments. Innovation in the form of increasing core competencies has added unique values to business.

Product Innovation Examples

The central idea of this theory is that, there is a wide range of knowledge in the economy and it is widely distributed (Lotz H.M. and Van 2013). Therefore, the licensing process of innovation, patents, spin offs are normally taken outside of a particular firms’ are by spin offs, collaborating strategically, joint venturing and other contracts. The concept is more firm centric, includes creative consumers and communities (Kovacs Van and Cassiman 2015). This is also defined as the paradigm shift between the innovation and related firms and there is involvement of customers, rival companies, and academic institutions, and can be as much a change in the use in management, employment technical and research driven generation (Carayannis, Barth and Campbell 2012). This model has some drivers, as if this innovation can be government driven. UK government has a funding in Knowledge Transfer partnership (KTP) as a form of knowledge based partners and collaboration program. This has long supported their initiatives that the government has taken. Others are like product plat-forming, idea competitors, customer immersion, collaborative product design and development, innovative networks and innovation in-science. Trade and international investment, portfolio investment stimulates competition, improvises resource media allocation and facilitates distribution of technology (Nidumolu, Prahalad and Rangaswami 2012).

The opposite of this holds the closed innovation concept, which says that success of innovation needs to be controlled. That is where the innovation barriers come in. The company should have control in the generation of ideas in production, distribution, servicing, supporting, after sale service, financing, marketing (Rahman and Ramos 2012). This has some certain revolutionary opponent, as companies are more interested in doing open source software (Carayannis, Barth and Campbell 2012). 

Government policy and growing sustainability concern in innovation – Economic sustainability is the main concern of the government. The policymaking and implementation should be the central development agenda. This requires the right framework and conditions and practical tool (Hill Jones and Schilling 2014). Introducing the GREEN TAX in the economy while there is global warming effect is called trial and error method of innovation. However, this kind certainly have some economic cost in line. The pollution control and resource management is certainly is at fault for not having analyzed the critical outcome of the innovation (West and Bogers 2014). The policy coherence and market focused economic growth should be parallel to trade policies and coordinated with the corporate sustainability. The main aims of the state to incorporate to innovation in the business have three major utility, economic growths; enhance competition, and problem solving of environmental and global problems (Podmetina et al. 2014). Developing countries with the emerging markets, this has implications and ramifications in place, where there should be regarding expectations, that develops in knowledge and innovation parallely by progress in democratization.

For example NESTA (national endowment for science technology and the arts’) it is a public body for promoting creativity and talent, which has funding from state government. 

Creativity and innovation are the complements of each other, as one cannot exist without the other (Jarle et al. 2014). There are certain sources of creativity and innovation. Internal sources can be the core drivers of innovation as if unexpected occurrence of alarming situations arises and the procedure to overcome can lead to some innovative methods of innovation (Podmetina et al. 2014). Non-conformity to traditions and incongruence’s are also drivers of innovation. Simultaneously, the external resources like demographic changes, perception of lifestyle changes are external sources of innovation (Podmetina et al. 2014).

Business Model Innovation Theory

Therefore, from the above discussion it can be concluded that the major drivers of change in business, which leads to growth, is the innovation. There are many forms of innovation but the plan must include the recycling or reinventing of sustainability concerns involved. Thus, the surety of the innovation is ensured and reasoned (Carayannis, Barth and Campbell 2012). The main concern for the state and government is to incorporating the not only the change factor but also the sustainability in the innovation. This may be costly in near future but it certainly will give a good outcome in the end and certainly in the long run. Creativity is discussed in a broader aspect but the converting it in value is implementing the plans is need of the day in the economy. 


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