Why is 2021 the Year for Innovation in Business?
Innovation in business isn’t a new thing, but the nature of innovation itself is always in flux. That which was considered innovative 20 years ago, is the norm today – case in point: Amazon.
When Jeff Bezos launched Amazon back in 1994, selling items online was considered innovative. Today, the e-commerce industry is worth $4.89 trillion and accounts for over 20% of all global retail sales. Consumers prefer shopping online, from the comfort of their homes rather than visit physical outlets.
And that’s why businesses everywhere now rely on innovation as an essential facet of success. Before the digital age, doing the same thing as your competitor would have allowed moderate success. But today, consumers look for new and innovative companies to do business with and – therefore – prefer the option that has something unique to offer.
In 2021, every business will need to focus on innovation, and here’s why: Innovation in business means being able to adapt your operations to the constant changes in technology and consumer behavior. This will allow businesses to provide products and services that are better suited for their customers’ needs.
So let us discuss why innovation in business is necessary and how 2021 allows the perfect opportunity for businesses of all kinds to gain a competitive advantage in their relevant industry.
Why is Innovation in Business Necessary in 2021?
Let’s start off by defining what innovation is, and how it fits into the business context.
Innovation is defined as “the implementation of new ideas, concepts and products that are perceived as better or more effective than existing ones.”
Innovation in business is basically the realization of implementing a new idea or concept to allow for an enhanced process within a business. This new idea or concept can result in the development of products and services that satisfy consumer needs in a whole new way.
Some of the most successful and profitable businesses in history are those that have innovated to meet consumer needs. From Apple Inc. and Microsoft Corp. to Alphabet Inc. (Google’s parent company) and Alibaba Group Holding Ltd. the most successful companies are those that have been the most innovative.
One key reason why it is important for businesses to innovate is because consumers love it when they do. Innovation gives the consumer something brand new to enjoy as opposed to something that is an improved version of what already exists on the market. And while providing an improved version of an old idea still works, it just doesn’t work as well as a truly innovative approach.
Not to mention, innovation can be so powerful that it creates a genuine, new market. For example, Apple did not invent the MP3 player. However, they were able to create such an innovative product with the iPod and got their hands on 70% of all MP3 player revenues.
Models of Innovation in Business in 2021
Innovating in 2021 is tricky. On the one hand, innovation creates opportunities for businesses to enter new markets, develop sophisticated products and processes and satisfy consumer needs like never before. On the other hand, it requires expertise of the highest order to execute innovation properly.
However, to simplify matters we shall discuss three models of innovation that companies usually follow. These models provide a framework of how to proceed with adoption of innovation in business, especially in the modern age.
1.Revenue-Model Innovation
The most common form of innovation in business is revenue-model Innovation. This type of innovation builds on the reigning business model, but adds an extra layer of value to existing products/services or enhances business operations & aligns them with a customer’s changing requirements.
As such, revenue-model innovation consists of creating innovative products, modifying existing products and choosing not to sell other (less profitable) products. The most common example of revenue-model Innovation is a new product or service that comes to market and disrupts existing business models. For example, how Amazon is disrupting retail with online services like Amazon Prime.
2.Business-Model Innovation
The business-model innovation involves changing the way a company does business in order to improve customer satisfaction or increase revenues. Innovation is related to the introduction of new technologies, but it isn’t limited only to that.
Essentially, business-model innovation is related to change in business strategies, processes and technologies. An example of business-model innovation is a company forming a strategic alliance with another company to develop an innovative product.
In addition, business-model innovation also includes coming up with an innovative way to gain profits from the business. Innovation can happen at a company’s headquarters, but it also can be found in the field. Innovation on the ground level includes things like self-service and virtualization of business processes.
3.Industry-Model Innovation
Finally, the industry-model innovation stems from the desire to effect a change in the industry practices and/or the industry itself. Innovation in this case can be a new way of doing business across industries or changing an existing business approach.
Innovation is key for businesses to remain competitive and keep its revenues steady since it faces stiff competition from competitors that come up with innovative ideas constantly.
As such, industry-model innovation involves pitching an existing product in a new industry or deciding to reinvent established industry practices altogether.
How to Introduce Innovation in Business in 2021?
In 2021, businesses have better access to technology than ever before but that doesn’t mean an automatic injection of innovation. Introducing innovation in a business, even in 2021, requires meticulous planning and execution.
Essentially, introducing innovation in business in 2021 requires committing to the cause and backing it up with capital and resources. Thinking of an innovation is just the first step and it is up to the senior management to cultivate a culture that encourages innovative thinking.
Some of the key components to introduce Innovation in business are:
- Prioritization of innovation in business processes and products
- Backing up innovative ideas with capital and resources
- Persuading all organizational members for adoption of innovative approach
- Communicating objective and implementation of communication effectively
- Hiring the right resources needed to implement innovation
- Regular monitoring and evaluation of progress and performance of innovation
With 2020 wreaking havoc on economies and businesses of all kinds, from LGBT owned businesses to other minority-owned companies, 2021 represents the perfect opportunity for innovation. In many ways, 2021 is a fresh start to businesses and how they can introduce innovation into their processes and products.
Innovation especially represents an opportunity for the LGBT community and gay businesses since they are one of the worst affected businesses by the pandemic. With the help of innovative processes and products, LGBT friendly businesses can make a real difference going forward.
The Wisconsin LGBT Chamber of Commerce provides a platform for the gay business community in Wisconsin to develop innovations in business thanks to networking and listing services. Sign up for a membership with the LGBT chamber of commerce today to get started with your innovation in business.
Conclusion
Innovation is the key to success in business nowadays and there are many ways in which businesses can innovate e.g., revenue-model innovation, business model innovation, industry model innovation and product model innovation. Innovation should be the priority for every business owner as this will allow them to gain an edge over their competitors and 2021 is the year for business innovation as many new and useful technologies are helping businesses innovate already.