Define Innovation

By Martin Gilliard

There is little consensus on exactly how to define innovation. Whilst it is widely understood and accepted that innovation is a major source of an organization’s competitive advantage. There tends to be many actual definitions of innovation. Such variations often exist so as to better meet the requirements or characteristics of a particular study.

Existing definitions range from the highly specific to highly generalized.

It is thought that accurately defining innovation will impact in-house and outsourced activities.

What is common in most definitions of innovation is a focus on novelty and newness and that it creates profit or adds economic value to the organization responsible for it.

an innovation light bulb

(Image Credit: hugh D'A)

Novelty and newness is acceptable however the fact that an innovation must create profit or add economic value is a mistake as innovations do not always create value for an organization.

One such example of an innovation that did not add value to its organization was the Sinclair C5 electric car. Sinclair Vehicles was put into receivership on 12 October 1985.

In the 1930’s Joseph Schumpter put forward five types of innovation definitions…

  1. Introduction of a new product or a qualitative change in an existing product
  2. Process innovation new to an industry
  3. Opening of a new market
  4. Development of new sources of supply for raw material
  5. Other inputs and changes in the industrial organization

For further definitions please visit the definition of innovation page.


How Innovation Definitions Are Derived

Generally innovation definitions are derived from one or a combination of the following:

  • The generation of a new idea: This is where new ideas are formed from old ideas, or new relationships / perspectives are formed between entities or subjects

  • The invention of something new: A new product or service

  • The diffusion of new ideas: The transfer of new ideas to new geographic locations

  • Improving something: This can be improving a product or service for example to make it commercially viable as Thomas Edison did with the electric light bulb or it can be improving a system or process

  • Doing something different: Getting to the end result of a task or problem by doing something radically different to what would be expected

  • Adopting something new to the social setting of which it is applied:This is where something that has proven to be successful or useful elsewhere is used to similar advantage in a new environment.

  • Market based: An innovation that is developed to meet the needs of a market.

  • New perspective: Seeing something from a new perspective

  • Incremental improvements: Making incremental improvements to a product or service or implementing continuous improvement (kaizen) as can happen from applying Lean techniques

For an explanation of the various different innovation types please visit the types of innovation page.



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