Innovation Doesn’t Matter | Business & Finance

Innovation Doesn’t Matter

One of the greatest myths of our ticks is if you create something genuinely new, something completely unprecedented, you ‘ ll posses a better than average chance of acceptance gilded. Whence fixed is this thought that a integral engendering of unlearned university graduates posses stopped seeking a steady job in the vast defended corporations their predecessors obligated dear, pursuing instead the dream of the startup. For most, the vision does not work out the conduct they see. Scarcely anyone builds the proximate Facebook, or the coterminous Google, or the following Microcosm. Innovation Doesn’t Matter

But the motive for the reduced achievement scale is counterintuitive and is something of a dirty petite secret: despite what everyone says, authentic innovation infrequently radically pays finish off. Consider the biggest hits recent times, not unlike as, for case Nature ‘ s ubqiquitious iPad. Is adept largely gadget genuinely new in this product? Not quite: corporal is an iphone with a more fitting salt away. Brilliantly executed, good, but not genuinely new. The iPad wasn ‘ t smooth the anterior pill computer: the early patent for the wienie was all told issued in 1888. Or the matchless selling drug of all shift, which isn ‘ t, as many people might project, Viagra. Its Lipitor, a emotions drug, which is stimulating peerless because it was by no means a breakthrough: there were a number of compounds that did exactly the same thing on the market when it was released, and Lipitor was better only because it was, essentially, stronger.

Facebook wasn ‘ t the first social network. Google wasn ‘ t the first search engine. And Apple has invented nothing of breakthrough significance in its own right ever. But let us consider the case of a company that has invested in research and development to a surprising degree: it is Microsoft, which has typically spent between four and five times as much in R&D as Apple every year. Yet, strangely, its stock price has been flat for a decade or more, whilst Apple has surpassed it in every important metric. Innovation Doesn’t Matter

Innovation Doesn’t Matter

If genuine breakthrough innovation was truly an important driver of value, Apple should have been brought to its knees by Microsoft, yet the reverse is quite patently true. The dirty little secret those who preach the value of innovation will rarely tell you is that breakthroughs hardly ever make money. Breakthroughs are interesting and useful because they do something unprecedented. But unprecedented comes with a cost: the expense of acquisition perhaps, or complexity of use, or overall efficiency compared to available alternatives. For these and other reason like them, the more unprecedented something is, the smaller an audience it can command when it is introduced.

Only time, and multiple iterations of improvements, can make a breakthrough useful to enough people that a commercial proposition is possible. This is why companies such as Google, Facebook, and Apple, all organisations which have created businesses based on incremental improvement on someone else ‘ s breakthrough have gotten very rich indeed.

So, indeed, innovation doesn ‘ t matter. At least, not if you ‘ re a large corporation with stockholders to please. If your objective is making large – scale returns, do more of what you already know how to do.