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Incremental Innovation vs Radical Innovation

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In the context of Industry 4.0, companies must develop a clear vision regarding their positioning in this new paradigm. Objectives, investments, risks, and challenges must be defined in a clear and objective strategy. 

Technology itself does not have the power to transform if it is applied in isolation from a well-guided strategy. On the contrary, technology and assets are leveraged by improved planning and regular status checks.

We already know some of the advantages of Industry 4.0 implementation, such as increased efficiency and productivity, reduced errors, and improved flexibility and quality. In addition to the benefits mentioned, Industry 4.0 also creates the possibility of exploring new business areas. From this opportunity emerges the need to define the balance of investment between incremental innovation and radical innovation.

Incremental innovation is about leveraging the existing business model, seeking improvements in existing products by building capabilities and resources to manage the present (short-term organizational goals and to face the current competition).

Radical innovation is more disruptive and seeks to create new business models by including new technical skills to manage the future (strategic goals and competitive advantage against future competition).

So, what is the direction you should take? It is up to each company to define the distribution of resources for each of these initiatives.
Should it have a more conservative approach and invest more in incremental innovation? Or should it take the risk and invest its resources in radical innovation? In general, there is no need to channel all resources into a single approach. At the end of the day, it is better to find a balance between the two approaches.

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