Companies can win only if they innovate. To innovate means to offer new values which are accepted by customers.
This statement sounds very simple but it is often not understood. Lack of its understanding results in trillions of euros and thousands of years of human work lost in futile projects. Lack of its understanding reduces most of the global scientific, engineering, design, management, and business efforts to throwing thousands of eggs from top of a skyscraper and hoping some will not break, hatch, and grow up to be the biggest and the smartest roosters.
Most important part of the statement is “accepted by customers”. This is where the difference between an invention and innovation is. If someone comes up with a huge improvement it will not necessarily be accepted. A better product, service, feature, or price does not guarantee any acceptance by the customers. The market and the competition are not that simple.
The very difference between invention – usually a product – and an innovation is the customer acceptance which can only be created by content. An enormous amount of high quality content must bombard the customers for a sufficiently long time until they accept it. Build it and they will come is false. Be very loud about it for years and maybe they will come.
Thanks to the globalization making inventions became cheaper. This creates a false idea that creating an innovation is also cheaper. The real cost of innovation is actually much higher because it must include the cost of content. Globalization also increased the cost of content as local brands started to compete with global leaders on every level. For example, Nike will beat local brands with videos and ads on YouTube. Therefore the cost of content became a major competitive barrier.
Problem is that the cost of content as an essential component of innovation is ignored by investors and businesses. The result is that many businesses fail and great inventions do not get to grow up into innovation. In the mean time the idea of innovation is promoted but not realized. Although there are more and more inventions, there is less and less innovation. This makes startups and some SMBs into either free R&D facilities for multinationals or career vehicles for their staff. Their real purpose, to directly add new value to the market and society, is less possible.
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