Comprehensive reading

Innovation has been and continues to be an important topic of study for a number of different disciplines, including economics, business, engineering, science, and sociology. Despite the fact that innovation has been studied in a variety of disciplines, the term is often poorly understood and can be sometimes confused with related terms such as change, invention, design, and creativity.

Most people can provide examples of innovative products such as the iPod or the PC, but few can clearly define the innovative aspects of these products. Among academics there is a difference of opinion about what the term innovation really means.

It seems obvious that a common sense definition of innovation is that it is a process of finding novel solutions to important problems. Unfortunately, in order to make innovation palatable to business organizations, many have tried to narrow the definition to make it more purpose driven. That’s getting it backwards, after all it’s businesses that need to adapt.

To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products. In business, innovation often results when ideas are applied by the company in order to further satisfy the needs and expectations of the customers.

One of the roots of innovation, “novation” started appearing around the thirteenth century in law texts. At the time, it was used when talking about renewing contracts. It’s meaning revolved around newness, not creation.

Flash forward a couple of centuries to the 16th and 17th century religion-laden Europe, and the word “innovation” began coming into play more frequently. At the time its meaning revolved around newness plus change  bad change. Henry Burton, an English Puritan and royal official at the time, used the word in pamphlets denouncing church officials as innovators. Unfortunately for Henry, the people in power didn’t feel like they were the innovators, instead they claimed he was the true innovator. He was sentenced to prison for life.

The next turning point in the life of “innovation” occurred during the industrial revolution. At the time, invention was king. The number of patents, R&D labs, and a consumer culture were growing quickly. It wasn’t until 1939, until Austrian economist Joseph Schumpeter drew a distinction between invention and innovation, claiming that invention was “an act of intellectual creativity undertaken without any thought given to its possible economic import, while innovation happens when firms figure out how to craft inventions into constructive changes in their business model.” This was a powerful turning point because companies began to realize that focusing on patents was inventing, not innovating.

In a social context, innovation helps create new methods for alliance creation, joint venturing, flexible work hours, and creation of buyers’ purchasing power. Innovations are divided into two broad categories:

1. Evolutionary innovations (continuous or dynamic evolutionary innovation) that are brought about by many incremental advances in technology or processes and

2. Revolutionary innovations (also called discontinuous innovations) which are often disruptive and new.