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Innovation And The Value Of Failure

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  • William Townsend

Abstract

Innovation is a difficult phenomenon to evaluate. Innovation impacts the firm in a variety of ways. It is difficult to analyze the full impact of innovation because there is no single set of metrics that can capture its full significance. The metrics that have been traditionally used only capture a fraction of the true benefit derived by the firm. In addition, since the circumstances, values, structure and strategies vary greatly between industries and firms within industries, the efficacy of specific metrics fluctuates from application to application. An unmeasured and often neglected area of innovation deals with the ideas that, for a variety of reasons, fall by the wayside. This paper examines the uncounted valuation aspects of innovation that occur independent of the market success or failure of the innovation product. These are benefits to the organization that may accrue from discarded or abandoned ideas or innovation products that failed in the marketplace. The sources of innovation valuation error are discussed as well as strategies for maximizing the value of failure and reevaluation.

Suggested Citation

  • William Townsend, 2010. "Innovation And The Value Of Failure," International Journal of Management and Marketing Research, The Institute for Business and Finance Research, vol. 3(1), pages 75-84.
    • Handle: RePEc:ibf:ijmmre:v:3:y:2010:i:1:p:75-84
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    References listed on IDEAS

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    Cited by:

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    2. Rodriguez, Mercedes & Doloreux, David & Shearmur, Richard, 2017. "Variety in external knowledge sourcing and innovation novelty: Evidence from the KIBS sector in Spain," Technovation, Elsevier, vol. 68(C), pages 35-43.
    3. Beatriz Moliner-Velázquez & María Fuentes-Blasco & Irene Gil-Saura, 2019. "Effects of value and innovation on brand equity in retailing," Journal of Brand Management, Palgrave Macmillan, vol. 26(6), pages 658-674, November.
    4. Baxter, David & Trott, Paul & Ellwood, Paul, 2023. "Reconceptualising innovation failure," Research Policy, Elsevier, vol. 52(7).
    5. Williams, Allan M. & Rodríguez Sánchez, Isabel, 2024. "Knowledge mobility after tourism entrepreneurial failure: Life after death?," Annals of Tourism Research, Elsevier, vol. 106(C).
    6. Cusin, Julien & Passebois-Ducros, Juliette, 2015. "Appropriate persistence in a project: The case of the Wine Culture and Tourism Centre in Bordeaux," European Management Journal, Elsevier, vol. 33(5), pages 341-353.
    7. Beatriz Moliner-Velázquez & Maria Fuentes-Blasco & David Servera-Francés & Irene Gil-Saura, 2019. "From retail innovation and image to loyalty: moderating effects of product type," Service Business, Springer;Pan-Pacific Business Association, vol. 13(1), pages 199-224, March.
    8. D'Este, Pablo & Amara, Nabil & Olmos-Peñuela, Julia, 2016. "Fostering novelty while reducing failure: Balancing the twin challenges of product innovation," Technological Forecasting and Social Change, Elsevier, vol. 113(PB), pages 280-292.
    9. Ganga Bhavani & Reena Agrawal & Suhan Mendon & Cristi Spulbar & Ramona Birau, 2021. "An Empirical Investigation into Alarming Signals Ignored by the U.S. Multi-Brand Retailer J. Crew Incorporation during COVID-19 Pandemic," JRFM, MDPI, vol. 14(11), pages 1-21, November.

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    More about this item

    Keywords

    innovation; value of failure; market success; innovation valuation error;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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