Innovation is a critical part of any economy and, as such, it has been the focus of intense study by economists and others for many years. The UK Organization NESTA has defined innovation as the process by which new ideas turn into practical value in the world: new products, services, or ways of doing things. NESTA also emphasized on ‘Hidden Innovation’ on their 2007 report which further explains it, saying, “Hidden innovation is new activity that does not immediately register in economic indicators such as investment in R&D and patent. “Hidden innovation” is used to emphasize that some innovations are not necessarily new or obvious to many people.
Some of the other examples of companies where ‘hidden innovation’ is present include Rolls Royce with its continual improvement in its manufacturing processes so that its products can compete on the world stage. Google is not traditionally associated with innovation since it provides search services to Internet users, but the fact that it has become a major global player in online services and advertising shows that it is a significant. In the UK, companies such as Dyson are also well known for their innovative product development processes which have contributed to the success of the company. Many other companies have realized that innovation involves much more than just spending on research and development.
Types of Hidden Innovation
There are four types of Hidden Innovation as defined by NESTA. Type I is incremental innovation — which can be simply defined as a product upgrade. Examples may include an improvement in the design of a mobile phone or computer device to make it more efficient or functional. Type II innovation is defined as innovation with no scientific or technological basis. An example of this is the innovation in business process or management style dan improves productivity without introducing any new product. Type III innovation involves combining existing technology and process to provide more values to users for example by integrating IT technology with on-premise services as provided by banking industry through their digital banking solutions. Type IV innovations are those which cannot be seen clearly when observed from a distance but are revealed upon closer inspection. When teachers / facilitators improve their teaching method to accommodate students learning needs, they are actually engaging in type IV innovation.
To Conclude
Although seemingly unnoticeable, these 4 types of hidden innovation is what supports the growth and sustainability of businesses in long term. By continually coming up with new products through incremental innovation and by embracing changes in business processes and management styles in order to increase productivity, companies are able to keep themselves relevant and competitive in their respective industries. Knowing that there are innovation process happening without the formal governance of the R&D department and new product development is a true testament to the power and innovation that exists within all businesses.
