INNOVATION

 Innovation is the process of performing new or existing activities in some different way.
 It is the end product of research and development activities of the organization.
 Innovation in entrepreneurship may be defined as introduction of new products, entry
in new markets, use of new means of production and distribution, identification of new
and better sources of raw materials and other inputs.
 In business, innovation often results when ideas are applied by the company in order to
further satisfy the needs and expectations of the customers.
 Innovation is regular and development process. Innovation converts an idea into an
application.
Innovation= Creativity + Exploitation

NEED AND IMPORTANCE

1. Increased Productivity- Economic growth is driven by innovation and technological

improvements which reduce the costs of production and enable higher output.

2. Positive Impact on Enterprise Culture- Innovation also has a positive impact on

enterprise culture as it increases the ability to acquire, create and make the best use of
competencies, skills and knowledge.

3. Personal Development- Innovation practices can help to build a culture of continuous

learning, growth and personal development. This type of innovative environment can again
motivate people to constantly improve the way they and their team work.

4. Economic Growth- Innovation in entrepreneurship is considered as a main source of

economic growth. Economic growth refers to the increase in the inflation-adjusted market
value of the goods and services manufactured by an economy over time. It is traditionally
measured as the percent rate of increase in real GDP.

5. Increased Well-Being- Innovation and economic growth increases well-being because

living standards rise. According to experts, average life satisfaction is higher in countries
with greater GDP per capital. A rise in real GDP means greater income and wealth
inequality.

6. Competitive Advantage- Competitive advantage means the necessary advancements in

capabilities that provide an edge in comparison to competitors of the entrepreneurship.
Successful, innovative businesses are able to keep their operations, services and products
relevant to their customers’ needs and changing market conditions.

7. Reduced Sickness, Poverty and Hunger- Developing countries depend upon innovation
as new digital technologies and innovative solutions create huge opportunities to fight
sickness, poverty and hunger.