Who This Article Is For
- Owners seeking ideas or business models to overcome stagnation
- Leaders who struggle to invent something from scratch
- Businesses creating new value from existing resources
Create New Business Value With Schumpeter’s New Combinations
Use Schumpeter’s new combinations to rethink products, markets, processes, suppliers, and organizations, then develop ideas from assets you already hold.
Published
Recombine Existing Assets and Knowledge to Create Business Value
Innovation can emerge from combinations of things already available. Reviewing familiar materials gives you a starting point without waiting for a moment of genius.
Schumpeter’s idea of new combinations describes creating value by combining existing elements in new ways. Technology, customers, channels, organizations, and knowledge can become a new business when their relationships change.
Even if you lack confidence in original ideas, you can develop the ability to connect existing assets in a different context.
What New Combinations Mean
New combinations bring existing resources and knowledge together differently to create value. The materials themselves need not be new.
An established technology can support a new business through a different delivery method. Selling the same product to a different customer can open another market. Innovation includes more than invention.
You can pursue new combinations without a special laboratory or an enormous budget. Businesses close to everyday operations often have abundant material.
Starting points include:
- Existing products and services
- Customer relationships and contact points
- Internal know-how
- Sales methods
- Combinations of people
Familiar resources can contain the seeds of your next business.
Distinguish Invention From Innovation
Confusing invention with innovation can restrict your thinking.
Invention creates a new technology or mechanism. Innovation turns it into value in a market. Technical novelty alone is insufficient: the result needs to reach customers, be used, and provide value.
Many companies assume they must create something entirely new. Consider instead changing how you deliver value.
Examples include:
- Selling an existing product to a different customer segment
- Turning an existing service into a subscription
- Offering internal know-how as an external product
- Moving face-to-face sales online
Recognizing these options broadens the range of ideas available.
Five Types of New Combinations
Schumpeter considered several directions for new combinations. They provide prompts for developing ideas.
1. New Products or Services
Combine existing technologies or elements into a new offering. This can mean bringing functions together or adding a different value to an existing service.
It includes reworking existing products as well as developing new ones.
2. New Methods of Production
Change how something is made or delivered. Production processes, service procedures, and working methods can change the economics of a business.
Systematizing manual processes or standardizing work previously dependent on individuals are examples.
3. New Markets
The same product can enter a new market when its customers change. A business product might be adapted for individuals, or a domestic product redesigned for overseas customers.
Changing who receives an offering can significantly change its value even without changing the product itself.
4. New Sources of Supply
Reconsider materials, suppliers, and external partners. Different sources can affect cost, quality, and brand value.
Examples include environmentally considerate materials, partnerships with local businesses, or procurement changes that stabilize supply.
5. New Organizational Arrangements
Different structures and responsibilities can create value. Cross-functional teams, closer links between sales and development, or an organization designed for external collaboration can unlock ideas and speed.
| Type | Example |
|---|---|
| New market | Adapt a business product for individual customers |
| New source of supply | Improve value by sourcing a new material |
| New organization | Create a cross-functional new-business team |
Recombining elements beyond the product itself can therefore produce innovation.
See designing cooperation through alliance strategy for finding a shared purpose and defining the value and roles each company brings.
Put New Combinations Into Practice
Apply the theory through deliberate idea generation and a fresh look at your materials.
Inventory Existing Assets
Start by identifying what the company already has. Businesses often underestimate their assets.
Alongside money and equipment, assets include:
- Customer trust
- Knowledge accumulated through practical work
- A track record in a particular industry
- People within the company
- Distinctive working procedures
An inventory reveals materials you can combine.
Bring In Knowledge From Other Fields
Thinking only within your own industry tends to produce familiar ideas. Distant knowledge can create new connections.
Cases from other industries, different sales methods, and technologies from other fields can combine unexpectedly with your assets. External knowledge is particularly useful when ideas stop expanding.
Deliberately Combine Elements
Set aside time to create combinations instead of waiting for inspiration.
Try:
- Product × a different customer segment
- Know-how × online delivery
- Track record × educational services
- Frontline knowledge × content
Early combinations can be rough. Producing several possibilities helps usable ideas emerge.
SpreadSite is a no-code website builder that lets you create, publish, and update a website from Google Sheets using ready-made templates.
To introduce a new combination of your services through a website you can update easily, give SpreadSite a try!
Build a website with SpreadSite →
About the Author
Thank you for reading!
I develop and operate SpreadSite, a service for creating websites from spreadsheets.
It helps people with limited time and money communicate what makes their work appealing. Consider it if you need a website! SpreadSite
Frequently Asked Questions
Q: Can I innovate if I find it hard to create from nothing?
A: Yes. New combinations use the ability to connect existing things differently rather than requiring creation from nothing.
Q: Can small and medium-sized businesses do this?
A: Yes. Fast decisions and easy experimentation can be advantages. A large investment is unnecessary to start.
Q: Why do my ideas fail to become businesses?
A: Classify the idea as a new product, market, production method, supply source, or organization. That distinction can help make it more concrete.
Q: What if it conflicts with my existing business?
A: That concern is natural. Protecting the status quo alone can leave you unable to respond to external changes. Renewing your own business gives you more control.
