Final answer:
Innovation encompasses the modification of products, services, systems, or processes to meet changing customer needs and improve efficiencies. It enables organizations to gain a competitive advantage and earn higher profits. Technological innovation, in particular, can transform lifestyles and business practices, offering a plethora of new possibilities.
Step-by-step explanation:
Innovation for organizations involves more than just developing new products and services as customer needs change. Innovation refers to the process of incrementally or radically modifying an existing product, system, or process to improve it. This can include the invention of new products, new ways of producing goods and services, and new ways of managing a company more efficiently. Market competition provides a strong incentive for this, as firms can earn higher profits by innovating to produce products more cheaply or offering products with desirable characteristics.
Take, for instance, the technological advancements that have dramatically shifted how we live and workâsuch as the transition from horses to automobiles, or candles to electric lights. This evolution is the result of ongoing research and development, which has led to significant changes in lifestyle and health, exemplified by indoor plumbing and the use of antibiotics.
Companies like Samsung understand the value of innovation, as stated by their CEO, Gregory Lee: "Relentless pursuit of new innovation is the key principle of our business and enables consumers to discover a world of possibilities with technology." Such innovation provides a competitive advantage, albeit often temporary, allowing for the earning of above-normal profits before competitors can catch up.