While reading the material for one of my projects I’ve discovered some sources of innovation that can be applied both in businesses/entrepreneurship and the overall economy.
Peter Drucker suggested seven areas where companies should look for opportunities to be innovative. The first four are internal to the company; the last three are external:
1 The unexpected success that is rarely dissected to see how it has occurred.
2 Any incongruity between what actually happens and what was expected to happen.
3 Any inadequacy in a business process that is taken for granted.
4 A change in industry or market structure that takes everybody by surprise.
5 Demographic changes caused by things like wars, migrations or medical developments (such as the birth-control pill).
6 Changes in perception and fashion brought about by changes in the economy.
7 Changes in awareness caused by new knowledge.
Drucker maintained that creativity was rarely a limiting factor: “There are more ideas in any organisation, including business, than can possibly be put to use,” he wrote. The issue is how to manage innovation so that it creates economic value.
These sources of innovation can become a safety net now- during the economic crisis.
But it is possible to get some idea of the sorts of companies that are doing well and the kinds of strategies they are pursuing… The most obvious winners are established giants: market leaders that entered the recession with cash in their pockets and sound management systems under their belts. These companies are reaping rewards from investors who are skittish about shakier rivals. They are also using their corporate muscle to squeeze their costs (for example, by negotiating cheap rates for advertising) and so win market share from their competitors. BCG, another consultancy, notes that 58% of companies that were among the top three in their industry had rising profits in 2008 and only 30% saw their profits decline. In contrast, only 21% of companies outside the top three had rising profits, and 61% had falling profits.
A second group of winners is made up of companies with a record of innovation. A third group consists of companies which are using the recession to reposition themselves.
If you want to read more about this topic: http://www.economist.com/businessfinance/displaystory.cfm?story_id=14540023