Innovation refers to the process of translating a particular idea or invention to a product or service to be paid for by people. This means that innovation involves an economic cost in an effort to satisfy a particular need. For innovation to be effective, a great deal of imagination, creativity and initiative is required in order to derive a high value. According to Rossouw (2009, p.409), innovation is an important avenue through which a business enterprise develop its competitive advantage.

Businesses which are not innovative in their operation process experience retarded growth and development. On the other hand, design entails the process of working out the structure of something. In addition, design acts as the plan to be used in the process of developing a product or service. Considering the intensity of competition among businesses, incorporation of the concept of designing is vital. For example, designing helps a business enterprise to differentiate itself from other enterprises in the same industry. As a result, the firm is able to attract and retain a high customer base due to its ability to provide products and services which culminate into utility maximization among customers. Creativity refers to the proficiency of coming up effective ideas and translating them into reality. In business, creativity is the ability to do things differently in an enhanced and inventive manner.

It is an essential concept of innovation because it is associated with lateral thinking thus coming up with new ideas. According to Proctor (2005, p.6), entrepreneurs can be able to develop new products and services to address the market needs through creativity. This means that creativity enables enterprises to cope with the dynamic business environment. In addition, creativity enables business to attain an effective market position hence increasing its competitive capacity.

Similarities and differences

Innovation, design and creativity bear some similarities since the three are concerned with strategic positioning of business enterprises.

A business with an appalling blend of the three requisites is described as old-fashioned. Business should continuously innovate, design, and create in order to attract potential customers and retain the existing ones. As a result, a high customer base will be attained. For a business to withstand the mounting competition, it must have a professional team responsible for conducting market research. This will enable the firm to establish viable improvements essential to the business.

In addition, the research team collectively with the innovative team should furnish the ways of implementing and managing the desired innovations. Despite the strong link between the three concepts, there are a number of differences which exist between the two. For example, creativity entails the process of generating new ideas or actions. On the other hand, innovation is the process via which creative and new ideas generated are applied. Design is an idea or a product that has been developed from an acknowledged need.

In other words, innovation is a brilliant new concept while design refers to the structure of products. In addition, the three influence the performance of business differently.


Entrepreneurs should consider incorporation of the concepts of innovations, design and creativity in their operation. This is due to the benefits associated with these concepts in ensuring that their businesses succeed in a competitive environment. Many businesses have benchmarked other businesses’ ways of doing business while others have concentrated on perfecting their operations in order to gain improved returns. In order to improve their performance compared to their competitors, firm’s management teams should increase their focus on innovation, design and creativity.

Reference list

Proctor, T. (2005). Creative problem solving for managers: developing skills for decision making and innovation.

London: Routledge. Rossouw, D. (2009). Business management: a contemporary approach. Claremont: Juta and company Limited.


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