4 Thinking about product innovation
Expanding on the OECD/Eurostat (2018) definition, we can suggest the following:
- To qualify as a product innovation, new or improved goods or services should be significantly different to the previous offerings and should be introduced in a context to potential customers or users.
There are many examples of product innovation (goods), such as the recent emergence of ‘Cubesats [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] ’, or lower-cost microsatellites. These are becoming affordable for medium-large enterprises requiring custom solutions for enabling microwave communications between facilities and related applications, transforming the way we use space. Another example that may be familiar is drones, or remotely piloted machines also known as Uncrewed/Unmanned Aerial Vehicles (UAVs), which have their origins in the development of airpower during World War 1 and efforts to move away from the trench warfare associated with the deaths of more than 9 million soldiers.
Innovation in goods is perhaps what we think of most often when we think of product innovation. However, in line with the views of many academics, this course recognises that services, as well as goods, are products; by extension, service innovation is a type of product innovation. Familiar examples of service innovation are online platform services, such as Uber ride-hailing services or Airbnb room/property rental services that enable a sharing economy. Another is Fintech, the high-tech financial services that offer more convenient, competitive and cost-effective financial services. Another is Tesla’s service product innovation which involved establishing their own network of electric vehicle chargers to create additional value to its customers.
Take a few minutes to think of some of your own examples of innovative goods and services.