To innovate or not to innovate? Invest or not to invest? This is the dilemma!
Like all investments, investing in innovation also involve risks, but how risky is it NOT to invest at all?
In a previous post we proposed some ideas to make our innovative processes more efficient.
Today we will talk about how much it costs companies to invest or NOT invest in innovation.
Costs associated with Innovation
First of all, it is necessary to highlight what are the most common costs associated with the introduction of innovative processes in the company:
- Training: in order for innovation to occur, a structured process of continuous training must be implemented within a company which can involve both inside and outside trainers. It is also necessary to ensure that these processes are effective, or that they are focused on learning retention;
- Consulting: it is sometimes advisable to rely on professionals who are experts in the field before facing important expenses;
- Research and Development: the most innovative companies have an internal department structured to generate innovative solutions. However, there is no certainty that these solutions can generate profits in the short to medium term;
- Acquisition costs: it is often necessary to acquire new technological solutions, such as new software or new machinery;
- Initial inefficiencies: when introducing novelties into the system, an adaptation period characterized by inefficiencies is needed to make the system adapt to the new way of producing, that is, the learning curve must be taken into consideration.
Costs associated with NON Innovation
Ricoh-Censuswide (1) research shows that 90% of decision makers from medium-sized companies in the UK, Germany, Italy, France and Spain identify the lack of technological innovation as one of the main causes of the loss of turnover. This loss stands at an average of 13 million euros per company.
Barriers related to Innovation
So, why not innovate? There are several reasons that hold back investment in innovation, the most common are:
- Lack of adequate skills: technologies evolve so quickly that it is very difficult to keep up with them. It is also problematic to have the skills required within the company and often also within the supply chain;
- Lack of a structured evaluation process: sometimes a new process is evaluated without a scientific approach that helps us evaluate all the benefits and problems related to the acquisition of new technologies;
- Lack of vision: sometimes the entrepreneur or manager cannot see the benefit that a change in technology can bring in the medium-long term;
- Low willing to change: changing approach or technology means adding uncertainty, which can generate frictions within the work groups if not properly managed;
- Poor Risk Management: uncertainty must be properly managed to provide for timely corrective actions in case of need.
Where to start?
Accialini Training & Consulting is able to provide concrete support for innovation management. In particular:
- Front-end support;
- Support in the implementation of an innovation management system;
Contact us to discuss your needs in detail.
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