The return on investment in innovation « co-society   Leave a comment

“The ultimate objective of innovation is to generate results, and a fundamental element of this is knowing how to manage the payback curve, the curve of investment/results: how much time you are investing in the innovation, and how much time you will need to recover your investment (how much time for the launch of the product, and for sales to reach the volume needed to ensure your investment was worth it).

According to Andrew and Sirkin (2006), the return on an investment is both direct return (money) and indirect return. There are four types of indirect return: knowledge (what we learn from the innovation process), mark (the impact on the mind of the clients), ecosystem (the partner companies with which we have to learn to relate in order to complete the innovation), and organisation (being an innovative company means you will attract more and better talent).

There are three stages to the typical curve of return on investment in innovation. The first involves investing to convert an idea into a product or service (generation of the idea). The second is launching and presenting the product or service to the market (commercialisation). The last stage is the production of results from the product on the market (exploitation). The success of the innovation process depends on how the plasticity of the curve is managed.”


via The return on investment in innovation « co-society.


Posted August 11, 2011 by arnoneumann in Innovation

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