Saturday, September 19, 2009

Innovation vs capital


Huge capital requirements remain the prime barrier of entering into some specific industries. Thus larger capital requirements result in a huge structure and creates a negative perception on those who are not that financially fit. Starting a business was almost a dream for guys who had unworthy pockets. But nowadays, those business dreams become real with the increased demand for virtual organizations. How many of us know the locations of those organizations which are reaching near to billions and trillions in revenue? Other than the virtual structure, offline businesses also seem to become positive on the view of persons who want to invest in low capital. The most important reason for this change would be because of the positive changes in the customers’ attitudes toward looking for innovative products. ‘Try it new’ products play well in consumer markets and soon they vanish. This is for the reason that customers want to try new things everyday. There is also an issue concerning to this kind of behaviour of customers which is ‘loyalty for products come down but brands may achieve more’. At the current era, guys who want to start a new business seek to invest in innovations rather than locking them in a huge capital. But in some specific industries capital is a must to even introduce innovations. At the same time some businesses require less than a few hundred dollars as capital and they gain much in revenue. If you are an innovative software programmer then you need a computer, applications and a network so then easily you can start to sell it online. So the requirement for huge amount of assets and capital come down and ‘innovative and creative ideas’ become a must to do businesses especially in the fields such as marketing, media and other arts industries. New Medias such as ‘blogs and podcasting’ would be absolute examples for those fields that always seek ‘very less capital and high innovation’.