How does Innovation Lead to Economic Growth?
Innovation is the lifeblood of the economic growth engine, but before placing any added emphasis on this concept, every business wants to know if it can be the catalyst for economic growth. The short answer is: absolutely.
In fact, the studies show that revenue (11%) and EBITDA (22%) both improve when businesses champion innovation. But how does it translate to financial rewards? Here’s what you need to know.
What is innovation?
The Merriam-Webster dictionary simply defines innovation as “a new idea, method, or device”. Innovative businesses are those that are constantly looking to introduce new concepts and adapt to evolving landscapes and the opportunities that they present.
How innovation inspires economic growth
Innovation can benefit businesses in many different ways. However, most business owners are rightly concerned with how it can boost the company’s bottom line. Here are six of the best benefits to consider.
1. Innovation drives real change
As the importance of innovation becomes more evident, companies have realized that actions speak louder than words. Idea management is no longer the main focus and instead, what is important is Idea execution - in other words, the carrying our of an idea from start to finish.
Truly innovative companies use tools like KICKBOX to analyze new ideas before working on those that will yield positive ROIs.
2. Innovation encourages employees to work harder
Happy employees are statistically shown to be 13% more productive. Feeling valued and invested in the company’s brand image will play an important role. Innovative companies actively harbor a winning atmosphere that creates psychological safety and prevents the fear of failure from creeping in.
Productive employees who are engaged with the company’s workload will additionally be more likely to offer up ideas that have a chance of success.
3. Innovation generates excitement in the brand
Modern consumers are more demanding than ever before, and only innovative brands can meet those expectations. Innovation introduces new ideas to create the ‘wow’ factor and hook leads and prospective clients. In turn, this can lead to more sales while also increasing the likelihood of going viral or gaining social proof.
We are living in an age of innovation. By encouraging intrapreneurship across the company, brands stand to build streamlined paths to conversion.
4. Innovation finds ways to reduce outgoings
Economic growth isn’t solely about increasing the figure in the revenue column. It can be equally beneficial to reduce the outgoings column. Innovation encourages companies to continually look for new technologies and techniques to complete assignments. In many cases, it will generate savings.
Innovative toolkits like KICKBOX simultaneously promote easier collaboration to generate further savings of time and money.
5. Innovation can increase customer lifetime values (CLVs)
Winning new customers is one thing, but keeping them is where true success stems from. As the Pareto principles states, 80% of sales come from 20% of your customers. Innovation often revolves around customer-centric ideas, which has been shown by global organizations like ZF. Iterative ideas, often seen in SaaS and other sectors, allow companies to base their innovation on the feedback they get from their customers in real time, further improving CLVs.
When innovation leads to useful updates or business models that encourage existing customers to spend more over time, success will follow.
6. Innovation never stands still
Finally, business landscapes are more competitive than ever before. If a company is guilty of standing still, it will get left behind. A greater focus on innovation ensures that this will not happen. Crucially, innovation should instil confidence in team members to present new ideas at all times.
KICKBOX can go a long way to inspiring innovation in a way that leads to economic growth for the company. If you’re rready to transform your future, get in touch today.