The Importance of Non-Technological Innovation in Productivity and Well-Being

In the modern globalised, highly competitive business world, businesses try to invent new ways to get in front of their competitors. For this reason, investments in Research and Development activities (R&D) have seen a sharp incline as companies are trying to bring innovations to the market to differentiate.

Observing innovations in businesses, someone can distinguish two types of innovation. The first one is the so-called technological innovation, which is closely related to product and process innovations. The other one is the non-technological innovations which are generally associated with organisation and marketing innovations.

For this article, we are interested in the non-technological innovations inside a business, and we will explore their effects on productivity and well-being. But first, we need to better understand what we mean by non-technological innovations.

Some Background on non-technological Innovations

Innovation has both technological and non-technological aspects, and many times, it needs to be complemented by the other for one to work. For example, creating a new product based mainly on technological innovations often requires new marketing methods for its successful commercialisation.

Non-technological innovations were first introduced in the Oslo Manual in 2005, created by theOrganization for Economic Co-operation and Development (OECD) and were identified for innovation surveys.OECD defines the non-technological innovations and their categories as the following:

·         Marketing innovation is implementing a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing.

·         An organisational innovation is implementing a new organisational method in a firm’s business practices, workplace organisation or external relations.

Since then, these categories of non-technological innovations have begun to be part of the countries’ innovation surveys, but are less detailed compared to product and process innovations.

How are Non-Technological Innovations linked to Productivity and Well-Being?

As it is mentioned above, non-technological innovations relate to the marketing and organisational innovations inside a company. These types of innovations play a supporting but at the same time vital role for business success.

On the one hand, there are marketing innovations that it is easy to understand their significance. Innovating in marketing activities such as advertising, selling, and delivering products to consumers or businesses helps raise a company’s profitability by increasing sales or profit margins. However, for marketing to be successful, employees need to be creative to find new and innovative ways to market the products of a business.

On the other hand, organisational innovations bring the much-needed changes inside a company to fight structural barriers that prevent its success. Some of these barriers may include conflicts within the company, criticism and pressure, strict management control, formal structures and procedures, and others. Through organisation innovations, companies can address those issues to create a culture of innovation and encourage employees to become more creative.

Research has shown that employees who are allowed to be innovators are moreproductive and engaged with their work. Employee engagement also brings many advantages to the well-being of employees like:

1.      Higher job satisfaction

2.      Better performance

3.      Lower stress

4.      Personal Growth

Therefore, it becomes evident that innovation, productivity and well-being are not just interdependent, but they also support and enhance each other. Organisational innovations enhance creativity, and in turn, creativity leads to even more technological or non-technological innovations in the workplace.

Conclusions

To survive the highly competitive and global business world, businesses need to invest money in innovations. However, before investing in new technologies to create new products or improve processes, companies need to look at what is happening inside their own companies. Making the transformation to more agile types of management and encouraging employees to be creative will lead to the generation of a greater amount of innovations inside the company and create a positive culture of well-being that will allow employees thrive.  

Learn more about employee driven innovation and related practices from the INNovaSouth manual here

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