Sources of innovation

What are the sources of innovation?

Innovation has become the buzzword of the industry in the 21st century. From business to other areas everywhere innovation is being talked of. Several emerging businesses have proved that innovation can be the way to the top. From Amazon to Google and Facebook, all have proved it.  Many times people use the terms innovation and improvement interchangeably.

However, the two terms vary in their meaning. The difference between improvement and innovation is the same as that between evolution and revolution. Improvement is like making improvements to an existing product or service to help it better respond to the market demand.

However, such improvements are not always revolutionary. Improvement is just a small part of innovation. Innovation is a much bigger term that encompasses several more things. Innovation includes differentiation. It also means superior returns as well as improbability of imitation. While improvements can provide a competitive advantage in the short term, there is the danger of their being imitated by the competitors.

An innovation is a far deeper process than simply improvement and the change it brings is also far long lasting and full of impact. However, several times the question has been asked that  where does innovation emerge from. There can be several answers to the question since there can be several sources of innovation. Peter F Drucker has provided seven sources which are discussed below:

According to Peter F Drucker, there are seven sources of innovation.

  • Unexpected
  • Incongruity
  • Market Structure
  • Necessity
  • Demographics
  • Changing perception
  • New Knowledge

The unexpected:

Innovations can take place unexpectedly. They can happen by chance. Someone might just stumble upon a new idea or product. There is a long list of unexpected innovations in human history. Even fire is considered an unexpected innovation that humans stumbled upon. Another example is the dynamite. However, an interesting thing to note is that several important innovations in our history have happened unexpectedly. Many times while scientists are looking for something, they stumble upon something else.


When the need is incongruent with the supply, innovation might be born. In an attempt to resolve the existing incongruities people might innovate. For example as the number of cars grew there was a shortage of parking area. In an attempt to solve the incongruity between parking area and parking shortage, the smart car was born. Smart car is a small car that can fit in small spaces. Incongruities can be an important source of innovation. It is basically in the human nature to try to fill the incongruities he sees around him.

Market structure:

An existing market structure can also give rise to chances for innovation. This is how Google was born. Google shaped the search engine market. Before Google the search engines were not as perfect and Google brought all of it in order. There was so much information scattered over the World Wide Web. Google made this information searchable. Thus, the World Wide Web gave rise to a market structure where a search engine like Google could flourish. the world wide web paved way for interconnection. Google created a search engine that was linked to all the searchable data.

Necessity: Necessity is the mother of invention but it is also the mother of innovation. Let us say Microscope. It was born out of the need to delve deeper into the microbial world. Needs always set us thinking. Innovation is based upon bright ideas. the human mind thinks of new things that can better fulfill an existing need. In this process he thinks of filling his needs in new ways and by devising new products and mechanisms.

Demographics: Our lifestyles can also be a source of innovation. We all have our lifestyle needs. For example we feel the need to smoke. However, since smoking is dangerous, we made e-cigarettes to satisfy the urge. Lifestyle needs are not small needs and their fulfilment and important requirement for us. This is where innovators sometimes find major opportunities.

Changing perception: Changing perception regarding things can also give birth to innovation. Earlier, the overweight people were seen as healthier than the leaner ones. However, the social perception of healthy has undergone a big change where fat people are seen as obese and unhealthy. People feel the need to remain leaner and healthier. Based upon this changed perception, a flood of healthy and low calorie foods came to the market.

New knowledge: New knowledge can also be a source of innovation. Whether it is nano-technology, biotechnology or even artificial intelligence, new knowledge in any area is a source of innovation. the science keeps progressing. Every year new areas are discovered and much gets added to the existing base of human knowledge. This new knowledge paves way for innovations that can sometimes be life changing. Healthcare is an area that has overtime been heavily affected by such innovations whether they emerge from the fields of biotechnology or nanotechnology. However, one can find many more such examples in his daily life. There can be some other sources of innovation also apart from the ones Drucker discussed. Innovation can be born out of passion or adventure or even of a hobby.