What is Innovation?

In contemporary times the term innovation could be interpreted in many different ways by different sections of people. For example to a scientist any new discovery could be an innovation, to an engineer a newly developed design could be an innovation, to a software professional a new piece of code featuring unique algorithm could be an innovation and to a marketing guy new market discovery could be an innovation and so on. But, wait, could these (unique) achievements alone be termed as innovation by definition? Well, according to the innovation management scholars and practitioners they are not. Then what is the actual drawback or missing link among all of them that restricts them to be called as true innovation? It is the utility of these new achievements and their associated market value. So, in this example when the scientific discovery, engineering design, software algorithm or the newly found market becomes commercially viable by generating value among its users then only they are called Innovation. Hence in short Innovation is the discovery of a new thing or new way of doing things plus the commercial value generated by its utility in the market.

Innovation = New thing or New ways of doing thing + commercial value

The definition derived above is one of the most fundamental descriptions of innovation and any further discussion on the subject would always hold this understanding associated with it.

Innovations could be stretched in its magnitude, and with this variation of scale, all innovations are either categorized as incremental or radical. In reality this variation could have many nuances and it might be little fuzzy sometimes to use these terms in their absolute sense. For example a patent created by any large organization could be one of its incremental improvements but the same patent in a smaller firm could bring a radical strategic change. But in general (taking a broader picture) innovations that change the equation of any industry or any market and sets new rules of the game are termed as radical innovations (digital photography, electric bulb or computers). On the other hand small improvements on the existing products and services are termed as incremental (upgraded versions of any software).

Though an effort was made to understand the term innovation above but it’s just not enough, rather it’s only the tip of the iceberg. The true essence of the term could only be captured by repeated discussion about its application, attributes, types, scale, process, management, relevance and implications on modern industry, market and society at large.