WHAT IS INNOVATION?

INTRODUCTION

This is the integrative essay on developing personal broad definition of innovation. It is a short essay document covering an overview of what is innovation, different types of innovation, different definitions on innovation, personal definition on innovation and references.

Overview of what is innovation

Von Hippel (2002) stated that innovation is an economically motivated activity; Szczygielski (2011) said innovation is the sources of competitive edge in any economy and firms. Many people confuse innovation with Invention. However Innovation is not invention. Invention is creation of a product or an introduction of a process or product for the first time that didn’t exist before, while Innovation is making significant contribution by adding value to an existing product, process or service which results into new product (Grasty, 2013). Olomi (2006) stated that innovation results into change in the products, market, and technology and organization performance. He further added Creativity and invention are the subsets of innovation. Furthermore, Drucker (1985) said that Innovation does not necessarily need to be original, technical or a thing but it can be a change in processes; innovation encompasses economic, social and technical phenomenon. Schumpeter ( as cited in Drejer, 2004) argued that innovation does not need to be radical, technological and unpredictable so that it can be considered as true innovation but it can be anything that update economic structure. Innovation involves doing things differently rather than doing things better through improvement (Branson). Accenture (2013) states that innovation brings about tangible outcomes that changes the way the world lives and works. Examples of recent innovations are solar airplane and Mobile phone banking called MPESA in East Africa which has turned the mobile phones into bank accounts.

Different Types of Innovation

Innovation in manufacturing is the most popular type of innovation because historically manufacturing was the major economic activity. However Innovation includes service innovation as well. Service innovation happen in  Distribution, hotels, transport, storage, communication, government, health care and motor vehicle repairs just to mention a few. There is a difference between service Innovation and Manufacturing Innovation. 

Whereas service innovation is supplier driven, manufacturing innovation is demand driven, further to that manufacturing innovation depends on R&D and Doing, new products and production technology whereas service innovation depends on new ways of organizing economic activities and depend less on R&D compared to manufacturing innovation (Szczygielski, 2011).

Jensen, Johnson, Lorenz and  Lundvall (2007) state that there are two types of innovations which are Science technology innovation (STI) and Doing type of Innovation (DUI). Science technology innovation is based on the production and use of codified scientific and technical knowledge while Doing (DUI) type of technology uses interacting mode, informal processes of learning and experienced based knowhow which has tacit elements. Firms that use both modes are likely to innovate new products or services than the one using one mode alone.

Innovation emanates from activities which include basic research, adoption and diffusion of innovations and decisions to participate in cooperative R&D Ventures (Hippel, 2002) formal knowledge which creates new knowledge (Drejer, 2004) and learning by doing (Jensen etal, 2007)

Definitions of Innovation

Edquist (1997) defined Innovation broadly as new creations of economic significance.

Drucker (1985) defined Innovation as coming up with new ideas and developing the organization required to effectively commercialising them.

Coulter (2005) stated that innovation is a process of taking a creative idea and turning it into a product or a process that can be sold.

Innovation is successful exploitation of new ideas that leads to any form of increased organizational or social benefit (Bridge S, O’Neill K. and Cromie S., 1998).

Schumpeter (as cited in Drejer, 2004) states that Innovation is related to economic development and is driven by the discontinuous emergence of new combination, that is more viable than the old way of doing things. Drejer, (2004) further argued that innovation is a process of industrial transformation that revolutionises economic structures from within. It is dynamism towards superior methods in production in the economy. Innovation involves small changes which are frequently a condition for development. Schumpeter (as cited in Drejer, 2004) argued that Innovation definition covers five areas which are:

Introduction of new good or a new quality of good (Product Innovation); introduction of new methods of production which includes a new way of handling a commodity commercially (Process Innovation); opening a new market (Market Innovation);conquering a new source of supply of raw materials or intermediate input and  carrying out new organization of industry (Organization Innovation).

My own definition of Innovation

My own definition of Innovation is adopted from Schumpeter (as cited in Drejer, 2004) as it provides a framework that covers manufacturing as well as service industry simultaneously. Moreover the definition has taken some elements from Coulter (2005) and Drucker (1985).

It states that Innovation is economic, social and technical significance term which involves introduction of new combination different from the old products, and this new combination developed must be valuable enough to be able to be commercialized. It can be new market, new methods of production, new product, new conquering source of supply of raw materials or new organization of industry.

Innovation can occur in any industry as long as it acts differently beyond the boundaries of routine systems and routine products. Further to that new idea and new product developed in innovation must have economic or social significance enough to be able to be sold at the market.

Reference

Accenture Innovation Index Awards (2013).”Connecting Innovators’’

Branson R., (2009).Business stripped bare, London, Virgin books.

Bridge S, O’Neill K. and Cromie S., (1998). Understanding Enterprise, Entrepreneurship and Small Business, London: Macmillan Press Ltd.

Coulter, M. (2005), Entrepreneurship in action, India, Prentice Hall.

Drejer I., (2004).Identifying Innovation in surveys of services. A Schumpeter perspective. Research Policy, (33), 551-562.
Drucker P.F.,(1985).Innovation and Entrepreneurship,Oxford,UK,Elservier Ltd.

Edquist (1997).Introduction. In Edquist C. (Ed), Systems of Innovation: Technologies, Institutions and Organizations. London, Printer.

Grasty T.,(2012 April 03).The difference between Invention and innovation.Huff post tech web log.Retrieved http://www.huffingtonpost.com/tom-grasty/technological-inventions-and-innovation_b_1397085.html

Jensen, M. B, Johnson, B, Lorenz, E and Lundvall, B.A (2007).Forms of knowledge and Modes of Innovation, Research policy, 36 (5), 680-693.

Olomi D.R., (2006).Influence on entrepreneurial behaviour and Business success. In D.R. Olomi (Ed).African entrepreneurship and Small business development, Dar es Salaam: Otme Company LTD

Szczygielski, K., (2011).What are service sector Innovations and how do we measure them? Case network studies and Analyses No 422 Warsaw, Centre for social & Economic Research.

Von Hippel, E. (2007).Horizontal innovation networks-by and for users. Industrial and corporate change, 16 (2), 293-315.