innovation - ProFile 2 UNIT 8 Innovation Investing in...

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Unformatted text preview: ProFile 2 UNIT 8 Innovation Investing in innovation is essential for inventions and ideas to find their commercial application. An initial breakthrough will enable other, often unimaginable developments to occur elsewhere. For instance, the first industrial revolution was built around steam. Newcomen’s steam engine meant that water from mines could be pumped out more easily, allowing coal to be dug at greater depths. It also was the spur to the development of other steam-driven machines, which ushered in the industrial revolution. The steam engine eventually evolved to develop locomotives, which in turn allowed cities to develop far-flung suburbs and commuters. IT COMES IN WAVES Innovation tends to come in waves. We could say that the second industrial revolution was built around electricity and its applications. Thomas Edison, the inventor of the light bulb, founded General Electric, which is still a byword for innovation. With electricity came labour-saving devices such as the vacuum cleaner and washing machines. In the late 1960s it was the development of new plastics and polymers which allowed a whole new wave of innovation to occur. Nokia is the paramount example of how a firm – under CEO Jorma Ollila – can re-invent itself through innovation to rise with these waves, particularly with their conquest of the mobile phone handset market. The company itself was originally founded in 1865 working in forestry industries, but has evolved through continuous innovation to the market leader status it enjoys today. See the ProFile Student’s site: SMART IDEAS Innovation often occurs as the result of seeing through a simple idea using existing technology. Mr Ibuka of Sony wanted to be able to listen to music while he was out walking or travelling on planes – and so the Walkman was born. Sony has long been famous for its innovation. Its co-founder Mr Morita is famously quoted as saying ‘The public does not know what is possible. We do’. The technology was there already: all Sony had to do was apply it. Dyson’s inspiration for the dual cyclone cleaner came from remembering a visit to a saw mill which employed centrifugal force to clear dust from the air. R&D Research and development is important for developed economies if they are to stay ahead of their labour-rich rivals. This know-how provides the comparative advantage which can be translated into a competitive edge. High technology industries tend to cluster around universities and centres of research excellence. Most innovations start out based on the research carried out in laboratories or workshops. MONEY AND BUSINESS KNOW-HOW Venture capitalist organizations and individuals are essential to the growth of many new high-tech companies. 3i is an example of a venture capital organization. Not only do these companies provide investment, but also the necessary advice and business know-how companies with bright ideas need to succeed. Genius may be more perspiration than inspiration, but a little money goes a long way too! Photocopiable © Oxford University Press ...
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