The Controversial Issue Of Whether Innovation Is Always Good Thing

Looking back at history, the concept of innovation was not as widely accepted as it is today. Nevertheless the importance of innovation has gradually changed over the last 200 years. It has developed a positive connotation because of its contribution to political, social and substantial progress of societies. To innovate or be an innovative individual is a highly desirable characteristic that many aspire to. Innovation can be seen as revolutionising and improving something that is already established – this can be done through the introduction of new methods to help adapt existing ideas. Thus the use of innovation as a means of addressing micro and macro challenges has been favoured by governments, businesses and society. The fascination of promoting innovation can be justified by the immense progression towards a better future. However although many innovations have brought out successful achievements such as the improvements in drugs to help treat diseases, there is also a dark side to innovation which needs to be taken into account. Therefore this essay aims to discuss whether innovation is always good thing. There is no argument against the success of innovations over the decades. We have continuously seen how innovations can change the world for better.

For example the steam engine which was built by James Watt was an adaption of previous steam engine attempts. This innovation went on to help power trains, ships and factories and was an important factor of the industrial revolution. It enabled transportation to occur more steadily and help the shipping of goods across the globe. The list can go on from penicillin to treat diseases to the telephone which improved communication. However, not all innovations have good side effects. When left in the wrong hands problems can occur. Nuclear power is an innovative way in which scientists have found that the splitting of the nucleus of an atom can generate an immense amount of energy which is great for delivering power. However at the same time this process can be used to create nuclear weapons which would result in the loss of lives and destruction. This highlights the key issue that innovation doesn’t always result in good. It can be used to harm society rather than create value. Furthermore, the concept of innovation and entrepreneurship has been widely discussed over many years. Leading research into this field comes from Schumpeter’s idea of ‘creative destruction’ of which is the process of creating new ideas and replacing the old ones behind.

For businesses to be successful they frequently need to re-invent themselves in order to maintain a competitive edge. Hence innovation becomes a priority in which businesses use it to create new strategies to enhance their growth and gain better positions in the market place. Research from William Baumol (2002) claimed that innovation was the main foundation of competitive advantage (Autio et al. , 2014). The idea of disruption is to develop customers future needs better than what is present in the market (Charles, 2016). For example low end disruptions can take place such a KIA the Korean automaker which entered the European and US auto market. Although the cars that the company purchased were not ground breaking, they were much more cheaper than any alternatives offered by the current market. This resulted in a substantial shift in market share away from the competitors making them alter what they had to offer (Charles, 2016). This emphasises that customers gained value when KIA entered the market as they now had a cheaper alternative to buy from. Even though no specific studies have empirically found the effects of innovation on consumers, Schlegelmilch et al. (2003) showed that certain types of innovation will result in ‘proactive value creation’ (Simpson, Siguaw and Enz, 2006). Similarly Totterdell et al. (2002) found that innovative firms foresee consumer requirements and react appropriately, generating greater value for the customers (Simpson, Siguaw and Enz, 2006). However not all innovation can be classed as creative destruction. Many now argue that innovation can become more disruptive rather than productive resulting in ‘disruptive creation’. This can result in loss of jobs, homes, livelihood and investments for many.

An example which illustrates this point is the ‘Uber effect’, which possibly caused more disruption rather than value creation. In big cities like New York and London the taxi industry collapsed when Uber gained a foot in the market. It is argued that consumers are the only winners from Ubers entry into the transport industry as there is now more choice, fast service and most of all lower prices. Consequently this new found competition should have encouraged other taxi firms to alter their methods off business. However Uber is a perfect example of ‘destructive creation’ rather than creative destruction as they have deliberately challenged boundaries and broke rules in order to create something new (Shanker, 2017). They have been able exploit loopholes in regulations which has traditionally effected taxi drivers thus Uber has been able to prosper because they have been able to avoid the regulations set in the industry. Regulators have obliged and ended up accommodating their business model due to the argument of Uber being easy to use and create more jobs (Shanker, 2017). Moreover innovation is not always an good policy. Innovative - orientated firms may get into the vicious cycle of innovating for the sake of innovating. These businesses can lose sight of their original aims and lose focus in providing what the customer needs (Simpson, Siguaw and Enz, 2006). If we look at the example of Apple. Many can argue that they don’t innovate anymore. Innovation requires creating change. At one point the iPhone itself was an innovation however as time has gone by apple has lot this streak and innovation is mistaken for novelty or imitation of other similar products (Williams, 2017). For apple to be continuously innovative they would need to reinvent the product rather than adding minor changes (e. g the fingerprint).

Additionally it is very easy for innovative firm to get comfortable with their innovation. If we look at the example of IBM and the mainframe computer. IBM was and still is one of the leading technology firms however they were very close to bankruptcy. During the early 80’s, IBM missed the disruptive change when personal computers came. At this time they were very focused on their own specialties of selling the main frame computer that they didn’t realise the market had moved on (Charles, 2016). This example is key in showing that the movement of innovation is vast. Ideas can become obsolete very quickly. Thus it is important for businesses to stay on top of their innovation rather than become comfortable with what they have. Thus innovation is needed to be successful. It is important to note that when looking into whether innovation is always good, it largely depends on the business innovating. Innovation requires a considerable amount of resources. Thus it is harder for smaller firms to innovate due to the scarcity of resources available. This can lead to financial strains.

Also innovation indicates high risk and uncertainty (Eisenhardt and Martin, 2000; Knight, 1921) (Rosenbusch, Brinckmann and Bausch, 2011). Research has found bigger entities have the capabilities to absorb failure compared to smaller firms who lack skills and experience in running research and development related tasks (Rosenbusch, Brinckmann and Bausch, 2011). At the end of the day innovation is not an easy task and has high failure rates. Hence whether innovation is a good thing is debatable. Overall this essay has outlined the main pros and cons to whether innovation is always good. The list of successful innovations can go on and on. However it is important to note that innovation may not always be used with the right intentions. This can harm society in many different ways. Furthermore since innovation is highly expensive it is important to evaluate if it is worth spending time and money onto such ideas. Society needs to get away from innovating for the sake of innovating and move back to remembering the core values of a business.