Sources of innovation

The 7 sources of innovative opportunity were listed by Peter Drucker in his book “Innovation and Entrepreneurship. If you’re unaware, Peter Drucker is considered one of the truly great management consultants.

Peter Drucker refers to innovation as the effort to create purposeful focused change in an enterprise’s economic or social potential. Innovation must begin with an analysis of opportunities, in a systematic and organized way. The starting point in innovation is identifying the scope for improvement with respect to customers, suppliers and internal processes. Innovations must be market focused. Opportunities to innovate are provided by new customer segments which are just emerging; customer segments that existing competitors are neglecting or not serving well, new customer needs which are emerging and new ways of producing and delivering products to customers.

New Knowledge, Both Scientific and Non-scientific

Every year new ideas are discovered and developed and a lot is added to the existing knowledge base. Knowledge has always been a source of innovation yet knowledge-based innovation has long lead time and convergence of knowledge. Technological and scientific breakthrough are the source of innovation that can’t be neglected. New knowledge can be applied in every aspect of the organization, starting from learning more about emerging trends, customer expectations, knowing how to use new technology, to improving customer service and supply chain.


Changes in demographics are defined as changes in population, size, age structure, employment, educational status and income. They are the most reliable indicators of future trends and offer diverse opportunities for innovation. Each new generation demands new and unique products and services. These changes affect the market as they determine the need for products, the target population who are buying those products, as well as the number of products being distributed.

Innovation Based on Process Needs

The weak spots in your organization workflows, processes and systems provide practical opportunities for innovation. Innovation based on process needs is a task-focused rather than situation-focused. It improves the process that already exists, redesigns existing, old processes and reinforces the weak links.

The Unexpected

The ever-changing business world is full of surprises. Yet, not only the unexpected failures but also the unexpected success, or even events that occur in the organization can trigger innovative ideas and become the creative sources of innovation. Unexpected situations can have a very powerful influence and can inspire an organization to gain another, new, perspective on the situation.

Changes in Perception, Mood and meaning

With the growth of technology, there are significant changes in the way people perceive the world. People change their perception about a certain product, brand or even industry. This is basically the question “Is the glass half full or half empty?”. Changes in perception are based on the mood rather than on the facts. Changing your perception from half empty to “half full” opens up incredible innovation opportunities.

Changes In Industry Structure or Market Structure

As the business landscape evolves, every organization has to adapt. Changes in industry shake-up businesses, yet they can inspire people to explore and create new ideas as well. Generally, industry or market structure is ever-changing and it can create great opportunities for innovation in order for organizations to adapt and adjust quickly.

The Incongruity

When our reality doesn’t meet our expectations we can discover new insights and gain new perspectives. Incongruity is a dissonance between what is and what it is supposed to be. It can be a great source of innovative ideas as it compares what is and what everybody else assumes it to be. Of all incongruities, the dissonance between perceived and actual customers’ expectations is maybe the most common one.

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