Closed-Loop Innovation Explained

A recently published book talks about the benefits of closed-loop innovation. It starts by asking, “What is innovation?” The book then goes on to list three reasons for innovation. I will talk about what is really meant by the term, and why I think it is important to shut down the loop before innovation.

What is innovation?

Innovation is a broad term that includes many different ideas. Inventors, entrepreneurs, researchers, and inventors all might be included under the broad banner of innovation. However, when you start to look at what is innovation and what makes it unique from what others are doing, what you find is that innovation is not always a straight line drawn from the innovator’s point of view. These people help develop technology important for business advancement, thus improving the world’s financial situation.

What is closed-loop innovation?

A closed-loop innovation is a thought process that starts in one area and continues on in another. It goes back and forth between two or more points in the innovation process. Sometimes it starts with an idea for something new that can be done by someone. Other times it starts with an idea for a new product or a service that can be offered. Other times it starts with something new that people already do – cars, clothes, homes, technology, and the like.

Why should we care what is innovation?

Because innovation is important. We need innovation. Economists predict that innovation will be the biggest economic driver of the world in the next decade. Not only is innovation good for us in the short and the long term because it produces new things, but because it creates wealth. The more knowledge and skills we have, the more we can create wealth and prosperity for our society.

light bulb representing innovation

So why do we care what is closed-loop innovation and how can it benefit us?

In my opinion, innovation is the process by which something comes from nothing. It’s the raw materials such as ideas, innovations, inventions, breakthroughs, etc., that are transformed into something new.

Here’s a close-loop example from my own life. I invented a closed-loops game that teaches kids how to play a board game without cheating. The first closed-loop game I played with my kids was called Treasure Isle. This was back when I was in college and working full-time as a secretary. We played this game over again.

I also invented board games that helped teach kids how to learn how to play a new game. One of those was called Scrabble. I also had inventions that helped me to market different products. All of these closed-loops gave me a rich experience and a sense of purpose. They also gave me a handful of ideas that I later used to launch a whole business.

The key to innovating is finding creative solutions to problems and then exploiting them. If you’re able to close-loop an innovation process, you’ll find that all of your ideas are coming directly from you. You’ll start with the raw materials, turn them into a product or service and then use your creativity to sell it. That’s innovation.

But you have to start somewhere. Start with an idea that challenges you and gets you excited about getting up and doing something about it. It’s not enough to just have an interesting idea; you have to take that excitement and transform it into real creativity.

As you’re doing this process you need to be clear about what you want to do with the ideas. Sometimes we’ll be uncertain, and our best guess might be wrong. For example, let’s say you start working on a new idea for a cleaning service. You know that this will be a great business but you’re not quite sure what direction to go.

To make sure that your efforts are really creative you need to step back and ask yourself, “What am I trying to accomplish?” What’s the result you’re after? What’s the greatest impact on my business or my community? These are the questions you should be asking as you go through the creative process. You can’t get into the nitty-gritty of what you’re after without first answering these questions. Otherwise, you’re going to get off track.


The most creative people aren’t afraid to get their hands dirty with their ideas. They’re okay waiting until something else comes along before getting started. This makes sense in any kind of business. When it comes to innovating, waiting is the better way to go.