What Innovation Brings to The Economy

There is one term that makes a product or service differ from others in the market. For example, a decade ago, smartphone products offered an audio-video player as a special feature; however, today smartphones provide sophisticated enhancements, such as full HD/Quad HD (High Definition) display, camera up to 20 mega pixel or even more, finger print sensor, and other advanced features.

What Innovation Brings to The Economy
Yes, it is ‘innovation’, that carries improvements, not only to products and services, but also to our lives. It affects our behavior, the method we communicate with other people, the approach we do business and formulate a decision, etc.

Since this expression is indeed fascinating to discuss, today we will learn the concept of innovation and its role in fostering the economy.

In a simple word, innovation is the manifestation of new ideas to products and process (activities) that leads to increasing value. Value itself refers to additional benefits for the entity (business, industry, etc), as well as for the consumers/users. In other words, innovation appears in two different cores, called product innovation and process innovation.

Product innovation means the introduction of a new product or a change in an existing product, including the improvement of the feature and/or the quality. Meanwhile, process innovation refers to the change in process of manufacturing and marketing a product and or service that provides better outcomes.

Moreover, to obtain and apply innovation to a product or service, a set of observations and research are required. Usually, the research is conducted constantly in order to find the newest development (the most innovative outcome) to win the competition. At least two important instruments are involved in every research; they are knowledge and technology.

As an analogy, knowledge is the road; it’s the ideas and perspectives organized by a logical pattern, while technology is the vehicle; it’s the methods and techniques employed to achieve the goals.

In the scope of economy, product innovation is measured by the trade (either domestic or export) of a product or service, since it is the effective tool to evaluate how successful the innovation is. Meanwhile, process innovation is employed in various economic activities. It is utilized in agricultural sector, for example in discovering high quality of agricultural products; it is also used in environment sector, for instance in conserving the eminence of land and water.

Furthermore, innovation is very useful in fostering local economy; and since local economy is the foundation of national economy, it will enhance national economy, as well.

In order to obtain optimal benefits, it is crucial to include local values and environment, in addition to local inhabitants, as the key factors in encouraging the economy. The participation of local residents will bring many advantages, such as: as an effort to empowering local residents, as a method to reducing urbanization, and last but not least, as an endeavor to amplifying local/regional development.

Besides, employing local residents as the center of development will increase their creativity, quality of life, as well as their welfare. Innovation will also be helpful in developing a better connection between rural-urban sector, through modern infrastructure and technology, such as internet connection, telecommunication, and so forth.

To sum up, innovation is indeed a useful instrument to enhance the economy. It can be applied in various sectors, such as trade, agricultural, environment, and local/regional development. **

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