Innovation is risky, but stagnating can kill you

Innovation is risky, but stagnating can kill you

Desperate times call for desperate measures. With global economies facing the prospect of a "double-dip recession", countries and businesses have to make difficult choices for their future. Options include maintaining the present state of affairs, or making drastic cutbacks, such as firing workers, to lower costs.

Another option would be to innovate - to bring a "new method, product or idea" to the market. Examples of such innovations are present throughout history, such as Bell's telephone and Ford's Model T.

But with innovation comes risk, because companies use up a lot of resources to make new products. So is the risk worth the reward? Or does staying "safe", or stagnant, present an even greater risk?

Some companies that stagnated ended up closing. They turned into relics of their former glory. Kodak, for example, was famous for its cameras and photographic film. Failure to change as digital photography emerged eroded the firm's status as a leader in imaging. In recent years, it sold off large parts of its business, and even considered bankruptcy.

Nokia is one company that is going through a makeover. Chief executive Stephen Elop referred to a burning platform in his memo to employees: they would be destroyed by remaining static, or they could take a leap of faith by plunging into the icy waters.

Nokia chose to adopt Microsoft's Windows Phone 7 platform and released a new product - the Lumia 800 - this month, symbolising the company's rebirth.

Whether it succeeds or not remains to be seen, but taking the risk could possibly save it from losing a shrinking market share to competitors like Apple and Google.

Apple underwent a similar process of reinvention in the late 1990s with the return of Steve Jobs, who introduced the revolutionary iPod, then the iPhone and the iPad.

Innovation may bring risks, but the alternative is much worse. If you stand still, you face the prospect of slowly fading away and eventually disappearing altogether.



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