Use innovation to start or grow your business


Business innovation is all about the successful exploitation of new ideas.

Innovation plays a fundamental role in the success of many of the world’s leading businesses. Often, the objective of dynamic, growing businesses is to innovate as well as to generate profits.

Innovation is about more than just bringing new and improved products and services to market. It can involve the exploitation of an idea by starting a new business or finding new ways to increase the efficiency of your business and, most importantly,improve its profitability. Sometimes, an idea may originate from within an existing organisation – eg a business or university. In these cases, the new business is called a ‘spin-out’.

It is important for businesses to continue investing in innovation during difficult trading conditions, so that they are in a better position to compete when conditions improve.

This guide explains how you can make your business processes more innovative and outlines the different approaches you can take. It gives you advice on innovation start-ups, planning for innovation and creating the right business environment to develop your ideas. It also outlines the help and support available to innovative businesses and the risks and rewards associated with innovation.

The business case for innovation

There is an important difference between invention and innovation. Invention is coming up with a new idea. Innovation is the commercial application and successful exploitation of an idea.

Innovation means introducing something new into your business. This could be:

  • successfully exploiting a new idea through an innovation start-up
  • improving or replacing business processes to increase efficiency and productivity, or to enable the business to extend the range or quality of existing products and/or services
  • developing entirely new and improved products and services – often to meet rapidly changing customer or consumer demands or needs
  • adding value to existing products, services or markets to differentiate the business from its competitors and increase the perceived value to the customers and markets

Innovation can mean a single major breakthrough – eg a totally new product or service. However, it can also be a series of small, incremental changes.

Whatever form it takes, innovation is a creative process. The ideas may come from:

  • inside the business – eg from employees, managers or in-house research and development work
  • outside the business – eg suppliers, customers, media reports, market research published by another organisation, or universities and other sources of new technologies

You will need to filter those ideas, identify those that the business will focus on and apply resources to exploit them.

Introducing innovation can help you to:

  • improve productivity
  • reduce costs
  • be more competitive
  • build the value of your brand
  • establish new partnerships and relationships
  • increase turnover and improve profitability

Businesses that fail to innovate run the risk of:

  • losing market share to competitors
  • suffering from falling productivity and efficiency
  • losing key staff
  • experiencing steadily reducing margins and profit
  • going out of business

Innovation can be risky but the benefits gained from it can be critical to the continuing success of your business.

Protecting your business and your innovations

You will also need to protect your business assets, such as premises and equipment, and intangible assets such as knowledge, motivation, vision and intellectual property (IP). Although these may be difficult to quantify, you can still protect them. You should assess what your assets may be and how you can protect them.