In various circumstances we have seen how the so-called big market players have failed to maintain a leadership position in the various technological transitions that have occurred over time. It happened both in rather radical contexts, such as the transition from digital photography to analog photography, and in cases of evolution of a consolidated product, such as the transition from mechanical hard drives to the more modern SSDs. At the same time, to cite well-known examples, we have witnessed the evolution over the years of the giants of microprocessors which, albeit among others and low, have been able to maintain their leadership by progressively improving their technology, making it ever more performing and efficient from the point of energy view.
So let’s see what incremental innovation consists of, why it generates benefits in the company and what are the traits that distinguish it from radical innovation, to understand the general criteria for preferring one of the two variants in a given context, if it makes sense to do so .
What is incremental innovation
Incremental innovation is a set of processes aimed at improving a product or service that already exists. It is therefore oriented towards adapting and developing solutions in continuity with what is already present in the corporate offer portfolio. Incremental innovation otherwise translates into an efficiency improvement of internal processes in order to make the company more competitive in terms of the commercial offer.
Incremental innovation is transversally inserted into the three most well-known forms of innovation in the industry: product, process and organisational.
Why it’s so important
Incremental innovation is important for various aspects related to the business, in the perspective of improve the existing offer and grow the company in terms of competitiveness. This consideration allows us to specify how innovation does not only concern a technological factor, but is the result of the change of mentality of the people who support itas well as the organizational models that allow the implementation of the technology itself in business processes.
Incremental innovation makes it possible to give continuity to the offer, improving it from a technological point of view, in the context of respond more efficiently to the variable demand that comes from the market in the digital age. For these reasons, incremental innovation complements radical innovation to all effects.
Incremental vs radical innovation
In the jargon of innovation, the incremental approach is added to the scope of radical innovation, referring to the contexts in which a totally new product or service is researched and developed, which has never existed before, to give rise to new markets based on truly disruptive experiences.
Radical innovation is very often accompanied by the definition of new technological paradigms, as in the case of the Internet or Industry 4.0capable of marking a significant breaking point, respectively with the way of communicating and producing compared to the past.
The fundamental difference between radical innovation and incremental innovation therefore lies in the continuity of the path. The radical approach does not envisage that continuity over time which instead represents the strong point of a program based on the progressive improvement of the products and services that belong to the company offer.
These are two types of innovation that are not mutually exclusive, but prove to be able to complement each other to generate business value, even if starting from diametrically opposite assumptions. For obvious reasons, even radical innovation has a transversal effect on product, process and organizational innovation on which modern organizations are based.
In both cases, due to their intrinsic characteristics, incremental innovation and radical innovation are able to affect both the evolution of what is already in place and the creation of new markets and processes.
Some examples of incremental innovation
The recurring example when it comes to explaining the basic concepts of incremental innovation, in their difference from radical innovation, is the telephone.
The cordless phone is an incremental innovation over the traditional landline phone, improved in its functionality thanks to wireless connectivity, which eliminates the constraints of wiring and allows comfortable use in a wider range of situations. However, landlines and cordless phones basically do the same thing. The second is only the natural evolution of the first.
The smartphone, especially since the introduction of the iPhone on the market, instead constitutes a radical innovation, as it completely redefines the concept of mobility in communication, both in terms of technology and in terms of experience. In addition to passing from communication via copper to that via the air, as well as introducing data traffic, the smartphone has introduced a radically new experience, which clearly surpasses the possibilities offered by the voice communication of traditional telephony. Thanks to mobile applications, we are able to carry out many activities and operations that previously required longer, more complex and laborious approaches.
Another form of incremental innovation is supported by so-called lateral thinking. In addition to the vertical approach, which focuses on improving an existing product and service solution more and more thanks to technological evolution, incremental innovation also allows for a decidedly more horizontal approach, which seeks progress, for example, by looking at what is happening in adjacent markets. Thanks to lateral thinking, it becomes possible to adapt to one’s reference context those solutions that have already proved successful in other areas, even completely unrelated to the one in which one intends to operate.
A further example of incremental innovation is the mainstreaming of somewhat elitist solutions and products. This happens systematically in the automotive sector, where the most innovative ideas often arise from motorsport research, to be subsequently implemented in the R&D of the commercial segment. In this case, we are not talking about inventing a product from scratch, but about finding those solutions that make it possible to adapt a niche product to the needs capable of satisfying a considerably wider audience, effectively extending the leverage of the markets.
Autonomous driving systems represent a concrete example of an originally elitist technology which, in order to continue growing, has even had to become mainstream, taking advantage of the simultaneous evolution of online navigation platforms and IoT systems.
Another example is the research into materials, capable of making the production of certain products progressively cheaper, making them sustainable in much more varied contexts than those originally conceived. Many solutions created for Formula 1 cars were later “democratised” thanks to production processes that were decidedly cheaper than those used at the highest levels of motorsport. This has allowed many technologies to come aboard commercial vehicles.