Sources of innovation

Few weeks ago I attended the workshop- 'Future-proofing: Making innovation engine fire and sustain' conducted by my friend Vinay (www.catalign.com). While on the topic of sources of innovation, Vinay introduced the concept of Pain (P), Wave (W), Waste (W), {PWW}. He said PWW are the three sources of innovation. I would like to quote the examples to bring in clarity of what he meant-
1. Feel the Pain (P)- Sight of seeing a family of 4 on a 2-wheeler (common sight in India) lead to Ratan Tata (Head of Tata's) felt the pain and proposed the idea of affordable 4-wheeler in place of the 2-wheeler. This has resulted in making good quality, low cost cars called the Nano as a substitute for 2-wheelers used for riding a family of four people.
2. See the Wave (W) - Steve Job and his team getting a peak into Xerox PARC's raw version of windows Graphic User Interface (GUI) in 1979. This lead Steve to conclude at that very moment that the future user interface would be GUI. This eventually made Apple famous for its user interface and provided as a key differentiator in all its products.
3. See the Waste (W) - Toyota's lean process which basically looks at minimizing or completely removing unnecessary steps.

In the workshop I mentioned that PWW is important for innovation and also that in many ways is natural and easier to explain why innovation happens. However, I interupted to say that there are also other reasons for innovations to happen. As we could not discuss this in detail in the workshop, I felt it would be good to write this as a blog for more people to react and add. So, here is how I bring out the other reasons/source for innovations. Let us take the following examples- TV, ipod, iphone, adsense, internet, T20(one-day cricket matches with variations of rules, reducing 50 overs to 20 overs), Coffee cafe day, chocolates, high-end cars, luxury cruise, Rolex watches, designer clothes, jewellery, yoga for well-being, etc. These innovations are not driven by PWW. It seems that the drivers to come up with these kinds of innovations are- Pleasure (P), Affordability (A) and Ego (E), {PAE}. Innovating for this category/segment makes a lot of business sense. The examples I mentioned cater to a certain category, where people are looking for objects of pleasure, I don’t know why but I like it or I just want it, experience a feeling of happiness and satisfaction, etc. The kind of innovation I mentioned is of different type addressing a totally different need when compared to the PWW type of innovation.

I would try to explain the 2 ways (PWW, and PAE) of innovating using the Maslow's Heirarchy of Need (MHN) and CK Prahalad's Base of the Pyramid (BoP). The PWW applies very well apply to the lower layers of the MHN and similarly for the BoP. As you go up the pyramid in both the cases (MHN and BoP) you will quickly see that the reason for innovation becomes PAE and little to do with PWW.
It seems the idea of PWW and PAE are both important drivers for innovations. Request you comments.