Incremental innovations
Incremental innovation is a change in an existing technology or combination
of technologies that does not significantly alter functionality, but incrementally
and continuously improves performance, features, safety, quality or lowers cost [33].
This “nuts and bolts” innovation is more essential to the survival of the average
organization. It is the means for continual introduction of new improved products
as the state of the existing technology advances.
Incremental innovation occurs as a result of improvements suggested by those
directly engaged in the design and production process, or as a result of initiatives
and proposals by users. No single incremental innovation has dramatic effects but
their combined effect is important.
The markets for these innovations are well-defined, product characteristics are well
understood, profit margins tend to be lower, production technologies are efficient,
and competition is primarily on the basis of price.
An example is the many incremental improvements in television over the last few decades,
including the introduction of color, improved video and audio clarity, and reduced size
to name but a few.
Radical innovations
Radical innovation introduces major change to the market by establishing a new functionality
not seen before. Radical innovations are discontinuous events that may represent new emerging
technologies. They are important as potential springboards for the growth of new markets.
Radical breakthroughs in technology are quite rare but when they do occur they can change
the whole character of an industry. Take, for example, the effect of the personal computer
on office productivity.
Radical innovations tend to require re-orientation of corporate goals or production
facilities. They often arise from entrepreneurial activities located near affluent markets
with strong science-based universities or research institutions and entrepreneurially
oriented financial institutions. Their competitive advantage is based on superior functional
performance rather than low cost.
