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The Seven Sources Of Innovation

The seven sources of innovation were highlighted by Peter Drucker (November 19, 1909 – November 11, 2005) who was a writer and well-respected management consultant.

The sources he defined were demographic changes, changes in perception, new knowledge, unexpected occurrences, incongruities, process needs and industry and market changes.

sources of innovation

Drucker’s 7 Sources Of Innovation

Demographic Changes

Demographic changes or trends could include an ageing population something which is occurring in many Western countries.

Changes such as this are likely to cause a shift in consumer demand.

Innovations will stem from this to assist people with worsening eyesight, hearing, mobility or to provide leisure activities geared more towards an older generation.

Changes In Perception

Innovations can arise as a result of peoples changes in perception. One example of this would be the general public’s perception of tobacco which has changed significantly over the last fifty years or so. New innovations to help people stop the habit are occurring all the time as a result. From special nicotine-releasing gum and patches, right through to electronic cigarettes (an electronic inhaler that vaporizes a liquid solution into an aerosol mist, simulating the act of tobacco smoking).

Another example would be how we keep changing our perceptions of a particular food product. Butter was seen as too fatty and therefore a number of low-fat spread alternatives came on the market and more recently we are now hearing that the body is better able to cope with processing butter than low fat spreads and so there is a shift back to butter based products that have been designed to spread more easily.


New Knowledge

This, in my opinion, is a very strong producer of innovation. Advancements in science, for example, is the formation of new knowledge. Such advancements are used constantly to create new, innovative products for us to use. Think of flat screen technology, electric powered vehicles, solar energy, wind energy, hydrogen fuel cells, etc, etc.


Unexpected Occurrences

Unexpected occurrences can be sources of innovation. There are a number of good examples of how this can lead to new innovations from 3M. Post it notes stemmed from a glue that wasn’t quite sticky enough and Scotchgard happened as a result of accidental spillage of a chemical on a 3M employee’s tennis shoes.



Drucker described an incongruity as a discrepancy or a difference between what something already is and what something should be. There can be incongruities between perceived expectations and actual customer expectations, between the reality of something or industry and the assumptions about that thing or industry.

An example of an incongruity between perceived expectations and actual customer expectations could be when many companies were trying to create smaller MP3 players with more functionality and more storage. People were not necessarily after the increased specification of MP3 player product though. Apple realized that the actual customer expectation was a means for them to be able to legally purchase, collect and organise their music and play on a device that was simple to use. So they revolutionized the industry with iTunes and the iPod.


Process Needs

Incongruities in a process. Process incongruity would look for something that is missing within a process.

Here we can think of any manual aspects of a process as examples. Ovens are used daily and then they need cleaning. Cleaning is a manual process and then came along self-cleaning ovens.

Watches need winding up, or batteries replacing and they also need the time to be adjusted every once in a while in order to remain accurate and then came along solar powered watches and watches that are radio controlled to automatically set to the correct time.

process need

Industry And Market Changes

Industry and market changes are sources of innovation. Such changes often result as people change their preferences, tastes and values.

One example would be peoples particular preference to a particular style of food. Mexican food becomes popular so up pops a Mexican fast-food chain such as Taco Bell.

Japanese cuisine becomes popular so up pop restaurants that demonstrate the art of sushi making, etc.

Drucker suggested that it was feasible for innovation to stem from any number of these aforementioned opportunities.

Ultimately though innovation still requires hard work/effort and this is highlighted in the following quote from Drucker in his article The discipline of innovation, Harvard Business Review:

“In innovation as in any other endeavour, there is talent, there is ingenuity, and there is knowledge. But when all is said and done, what innovation requires is hard, focussed, purposeful work. If diligence, persistence, and commitment are lacking, talent, ingenuity, and knowledge are of no avail.”
Identifying opportunities for synergy across multiple businesses/industries would provide further innovation sources. However, for this to happen many companies and industries must network together.

This could be achieved by formulating intermediary teams whose purpose is to assist companies in visualizing new opportunities whilst ensuring that core competencies, interests and plans are protected from competitors.

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