Today we always talk about innovation and the importance of companies acquiring a culture of innovation within their organization. Innovating consists of having ideas that are converted into value for the client, in a way that generates a return on investment for the company. This return can be both direct return (money), and indirect return: knowledge (what we learn in the process of innovating), brand (the impact on the customers’ mind), ecosystem (the partner companies with whom we carry out innovation), and organization (being an innovative company helps attract new talent).
However, one of the main obstacles to innovation is the strong aversion to risk and the fear of failure. In this sense, we can identify various types of innovation, depending on risk and return.
Gold innovation: low risk, high return. It is the area of the digitized startup economy, that of digital platforms and channels. It is an innovation driven by market opportunities, based on ingenious ideas, often simple, easy to experiment and easily scalable.
White innovation: high risk, low return. It is laboratory innovation, that of the public administrations, which invests significant resources in projects with no apparent economic return. It is innovation directed by science, with high complexity and risk and that does not expect an immediate economic return, but that is essential for human progress in the long term.
Blue innovation: high risk, high return. It is also called the blue ocean innovation. It is the innovation that originates from the introduction into the market of new technologies, without prior demand and opening to new market segments, thus creating blue oceans free of competitors.
Red innovation: low risk, low return. It is also traditionally called the red ocean innovation. It is the most conservative area, where people naturally try to compete by financing low-risk projects, expecting incremental returns. It is continuous innovation to survive in a saturated market with many competitors.
The biggest challenge for our companies and our economy is to opt for a golden innovation. However, if we manage to stay in the blue oceans of innovation, we will be able to continue increasing the competitiveness of our business fabric, generating economic growth and quality employment in our society.