Innovation

Innovation is the use of creativity and imagination to create a new form or method. However, innovation doesn’t always mean creating something new: as innovators often take something that already exists, improve it, change it, make it better and make it the best for their customers. Innovation is what drives capitalism. Capitalism allows entrepreneurs with great ideas to innovate their ideas and to test them in the marketplace. As innovation creates not only new products but new companies, whole new industries and wealth. Wealth which is ultimately distributed all through an economy. The more freedom, the more ideas, the more innovation which creates dynamic economic growth. Economist Adam Thierer explains that the internet was able to develop in a world that embraced what he calls "permissionless innovation”. While Big Government, on the other hand, does not innovate, because unlike private business they do not have to satisfy its customers to grow or survive. Besides the government hindering innovation there is another problem. Economies today lack the spirit of innovation with the downfall of the teaching of the humanities, as the market needs the skills of the ability to think imaginatively, develop creative solutions to complex challenges and adapt to changing circumstances as well as new constraints.

Innovation is also good for the environment. By encouraging innovation and protecting property rights we can protect the environment. As this leads to safer, more efficient power such as nuclear, geothermal, biomass or anything that generates energy at a price consumers want and can afford to pay. Thus innovation produces abundant, clean energy at a fair price without infringing on freedom.

Innovation has also been a big part of the Republican Party. For instance:

• President Abraham Lincoln helped develop the first transcontinental railroad system.
• President Hoover helped in the early development of radio broadcasting
• President Coolidge created our national airways system
• President Dwight D. Eisenhower started NASA and DARPA
• President Richard Nixon launched the cable television industry from deregulation.
• President Ronald Reagan created GPS to be available for civilian use and greatly expanded science research

The difference between creativity and innovation

The human brain is the most complex physical entity in the universe.

See also: Creativity

According to Business News Daily:

“

Creativity is the spontaneous development of new ideas and out-of-the-box thinking. Innovation is applied creativity, in which the spark of a new idea is turned into a novel solution or process. Hunter weighs in with his own definition: “Innovation is the implementation or creation of something new that has realized value to others.” Innovation is realized most vividly in the form of a tool, physical benefit or aid that solves a problem or creates an advantage.

”

Keys to innovation

The eight essentials of innovation, McKinsey & Company (Leading management consulting company), Mckinsey Quarterly, 2015

On McKinsey & Company's research related to the article above:

"The authors explore the elements that set successfully innovative companies apart from their less innovative counterparts. Their research consists of in-depth interviews, workshops, and surveys of 2500 executives at over 300 companies. The research defined success as a weighted index of measures for organic growth (percent of growth from new products/services developed in-house) and innovation performance (percent of sales from new products and self-assessments of innovation performance). From the research, they identified eight essential elements of innovation success: Aspire, Choose, Discover, Evolve, Accelerate, Scale, Extend, and Mobilize. The authors note that there is no proven formula for innovation success but argue that there is a strong correlation between these essential elements and success. A firm that strives to apply these essentials to their unique situation can improve their probability of sparking innovation within the company."

Other articles on keys to innovation

• 7 keys to creating a culture of innovation, Big Think website, 2023

• The Three Elements Of Successful Innovation, International Institute and Managers and Directors

• The Five C’s of Innovation by James H. Landman, JD, PhD

• The Four Key Elements of Innovation: Collaboration, Ideation, Implementation and Value Creation, St. Louis Federal Reserve, 2009

• The Discipline of Innovation by Peter Ducker (Prominent management consultant), Harvard Business Review, 2002

Innovation and countries going from middle-income countries to high-income countries

See also: Middle-income countries and Middle-income trap

According to Investopedia, middle-income countries are defined as: "According to the World Bank, middle-income countries (MICs) are defined as economies with a gross national income (GNI) per capita between $1,136 and $13,845 as of 2024. MICs consist of lower-middle-income countries and upper-middle-income countries, both of which are part of the income categories that the World Bank uses to classify economies for operational and analytical purposes."

Below are articles on innovation and countries going from middle-income countries to high-income countries:

• Innovation key to avoiding middle-income trap, Daily Star, 2024

• Escaping the Middle-Income Trap: Innovate or Perish, Asian Development Bank, 2017

• Caught in the Middle? The Economics of Middle-Income Traps, 2015

• The Middle-Income Trap: Stagnant Innovation and Growth in Latin America

Global Innovation Index

See also: Global Innovation Index

The Global Innovation Index is an annual ranking of countries by their capacity for and success in innovation. It is published by the World Intellectual Property Organization (WIPO). It was started in 2007 by Institut Européen d'Administration des Affaires (INSEAD) and World Business (a British magazine).

2023 Global Innovation Index rankings

Switzerland, Sweden, the United States, the United Kingdom and Singapore are the world’s most innovative economies in 2023, according to WIPO’s Global Innovation Index (GII), as a group of middle-income economies have emerged over the past decade as the fastest climbers of the ranking.

VisualCapitalist.com ranked the USA 3rd in innovation in 2023.

International Innovation Index

See also: International Innovation Index

The International Innovation Index is a global index measuring the level of innovation of a country. It is produced by The Boston Consulting Group (BCG), the National Association of Manufacturers (NAM), and The Manufacturing Institute (MI) (the NAM's nonpartisan research affiliate). NAM describes itself as the "largest and most comprehensive global index of its kind".

See also

• Ideation
• Brainstorming

External links

• What is innovation?, McKinsey & Company

• What is Innovation? Definition, Types, Examples and Process, IdeaScale website

• Innovation and Business: Why it's so important, Harvard Business Review, 2022