Magazine article International Trade Forum

Why Innovate?

Magazine article International Trade Forum

Why Innovate?

Article excerpt

Innovation is a key success factor behind al! successful exporting firms. Being innovative means more than having good ideas. A serious, sustained commitment to innovation implies risk and investment. But the pay-off is tangible. In today's fast-changing trade environment, innovation is not just a matter of export profitability; it can be a matter of survival.

In a nutshell, here are the reasons why services firms find innovation an essential part of successful exporting.

Protect market share

Most service ideas cannot be protected through copyright or patent. To remain competitive, services exporters must innovate continuously. Innovation is challenging enough in a domestic market. When cultural differences and international benchmarks are added, the process becomes even more complex.

Expand market share

Innovation can position your firm as a market leader and so make it easier to enter into the export market. As a services company, your competitive edge lies in your ability to acquire, absorb and apply new information on changes in the needs and frustrations of your customers, their service priorities, competitors' service offerings and the technologies available to support service delivery. In the export market, profitability is frequently linked to offering a new service because experience shows that customers will pay up to a 10% premium for services that address a previously unmet need. This premium will allow you to recover the extra costs of developing and servicing an export market without jeopardizing profitability.

Improve export readiness

Innovation links to export readiness in three ways:

Stretch resources. You may need to introduce internal organizational innovations, so that new and different customer demands are met efficiently.

Improve competitiveness. You will profit the most in an export market if you offer a service or service delivery process that is new to the target market.

Meet cultural expectations. To adapt to the cultural norms of. your target market, you will probably need to change certain features of your service or the manner in which it is delivered - again an innovative activity.

More efficiency, less turnover, better image

Economies benefit from innovation because it leads to growth and the creation of new jobs. But what about the firms themselves? …

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