Innovation
Innovation refers to the process of developing and bringing new products, services, ideas, or solutions to market, distinguishing itself from invention, which focuses on creating new devices or methods. For an invention to be considered an innovation, it must achieve market acceptance. The relationship between innovation and technology is significant, as it directly affects societal quality of life and how communities adapt to technological changes. Different regions respond to innovation at varied rates, with some countries like Switzerland, Sweden, and the United States leading in global innovation rankings. While developing innovative products can be costly—often leading to a high failure rate in the market—failing to innovate can similarly jeopardize a company’s competitiveness.
Various models of innovation have emerged over time, from linear approaches that simply link invention to market diffusion, to more complex frameworks that account for the life cycle of innovations. The technology adoption life cycle model, for instance, categorizes consumers into segments based on their readiness to adopt new technologies. Additionally, innovation can manifest in both tangible forms, such as new devices, and in more abstract forms like changes to business models. Understanding these dimensions of innovation is crucial for businesses aiming to thrive in competitive environments.
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Subject Terms
Innovation
Innovation is the process of developing and bringing to market new products, services, ideas, or solutions to problems. This is in contrast to invention, which is the development of new devices, methods, or techniques. Inventions are not necessarily innovations. For an invention to be an innovation, it must be introduced into the marketplace and become generally accepted.
Technology is intricately linked to the state of society and quality of life. Understanding innovation is not just a question of understanding business and technology, but it is also how society responds to technological change and the nature of sociotechnical systems. Some parts of the world have adapted to such changes more seamlessly than others. In the 2023 Global Innovation Index determined by the World Intellectual Property Organization (WIPO), Switzerland, Sweden, and the US were found to have the most innovative economies in the world.
Overview
Developing innovative products can be expensive, and success is far from guaranteed; as many as 75 percent of new products introduced into the marketplace fail. However, the cost of not being innovative can be just as high; many companies fail as a result of being overtaken in the marketplace by competitors with more innovative products and services. Thus, understanding innovation is important to ensure business success.
The earliest literature described the process of innovation as linear. Invention led to innovation, which then led to diffusion (the process of the innovation spreading through the marketplace). Linear models of innovation are open to many critiques because they are so basic, yet some believe this simplicity is an asset. One of the earliest models of innovation was that of “technology push,” whereby a manufacturer developed a product with capabilities not then available in the marketplace. This innovation would arise from improvements in basic science and technology, which in turn led to developing, manufacturing, and selling a new design. A later but still simple linear model of innovation was that of “market pull.” Here, the innovator responds to an existing need in the marketplace. By researching this need, new products could be developed, manufactured, and sold into the market. From this early base, many more sophisticated models of innovation have been developed.
The “S curve,” also known as a diffusion curve, is a concept that explains the life cycle of an innovation. Innovations have a life cycle that runs from their debut on the market to their replacement by newer innovations. Scholars of innovation are interested in how innovations are adopted and what sort of consumers will use the technology at each stage of its life cycle. Understanding these market segments is imperative to successfully marketing innovations. The technology adoption life cycle model, developed by Everett Rogers, is a bell-shaped curve, divided into five segments labeled innovators, early adopters, early majority, late majority, and laggards. Each segment has its own profile.
Geoffrey Moore, a well-known Silicon Valley technology consultant, advanced a variation of this model. He suggested that one of the greatest challenges is transitioning an innovation from the early adopters to the early majority; he calls this leap “the chasm.”
While innovation can be physical—a new device or invention is successfully introduced to the marketplace, for example—it can also be “soft,” that is, delivering enhanced outputs by reconfiguring the way companies do business. Such innovations are sometimes called business model innovations, as opposed to the more conventional technological innovations.
Bibliography
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Christenson, Clayton M. The Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do Business. HarperBusiness, 2011.
"Global Innovation Index 2023: Switzerland, Sweden and the U.S. Lead the Global Innovation Ranking; Innovation Robust but Startup Funding Increasingly Uncertain." WIPO, 27 Sept. 2023, www.wipo.int/pressroom/en/articles/2023/article‗0011.html. Accessed 4 Sept. 2024.
Godin, Benoit. “The Linear Model of Innovation: The Historical Construction of an Analytical Framework.” Science, Technology & Human Values 31 (2006): 639–67.
Keeley, Larry, Helen Walters, Ryan Pikkel, and Brian Quinn. Ten Types of Innovation: The Discipline of Building Breakthroughs. Wiley, 2013.
Moore, Geoffrey A. Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers. Rev. ed. HarperBusiness, 2002.
Osterwalder, Alexander, and Yves Pigneur. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Wiley, 2010.
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Tidd, Joe, and John Bessant. Managing Innovation: Integrating Technological, Market and Organizational Change. 5th ed. Wiley, 2013.
von Hippel, Eric. “Democratizing Innovation: The Evolving Phenomenon of User Innovation.” Innovation1.1 (2009): 29–40.