Innovation is the practical implementation of
ideas
In common usage and in philosophy, ideas are the results of thought. Also in philosophy, ideas can also be mental representational images of some object. Many philosophers have considered ideas to be a fundamental ontological category of being. ...
that result in the introduction of new
goods
In economics, goods are items that satisfy human wants
and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not tran ...
or
services
Service may refer to:
Activities
* Administrative service, a required part of the workload of university faculty
* Civil service, the body of employees of a government
* Community service, volunteer service for the benefit of a community or a p ...
or improvement in offering goods or services.
ISO TC 279
ISO/TC 279 is a technical committee of the International Organization for Standardization (ISO). Its purpose is to develop, maintain and promote standards in the fields of innovation management. The first plenary meeting of ISO/TC 279 was held ...
in the standard ISO 56000:2020 defines innovation as "a new or changed entity realizing or redistributing value". Others have different definitions; a common element in the definitions is a focus on newness, improvement, and spread of ideas or technologies.
Innovation often takes place through the development of more-effective
product
Product may refer to:
Business
* Product (business), an item that serves as a solution to a specific consumer problem.
* Product (project management), a deliverable or set of deliverables that contribute to a business solution
Mathematics
* Produ ...
s, processes,
service
Service may refer to:
Activities
* Administrative service, a required part of the workload of university faculty
* Civil service, the body of employees of a government
* Community service, volunteer service for the benefit of a community or a pu ...
s,
technologies
Technology is the application of knowledge to reach practical goals in a specifiable and reproducible way. The word ''technology'' may also mean the product of such an endeavor. The use of technology is widely prevalent in medicine, science, ...
,
art work
A work of art, artwork, art piece, piece of art or art object is an artistic creation of aesthetic value. Except for "work of art", which may be used of any work regarded as art in its widest sense, including works from literature ...
s
or
business model
A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, social, ...
s that innovators make available to
market
Market is a term used to describe concepts such as:
*Market (economics), system in which parties engage in transactions according to supply and demand
*Market economy
*Marketplace, a physical marketplace or public market
Geography
*Märket, an ...
s,
government
A government is the system or group of people governing an organized community, generally a state.
In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...
s and
society
A society is a group of individuals involved in persistent social interaction, or a large social group sharing the same spatial or social territory, typically subject to the same political authority and dominant cultural expectations. Socie ...
. Innovation is related to, but not the same as,
invention
An invention is a unique or novel device, method, composition, idea or process. An invention may be an improvement upon a machine, product, or process for increasing efficiency or lowering cost. It may also be an entirely new concept. If an i ...
: innovation is more apt to involve the practical implementation of an invention (i.e. new / improved ability) to make a meaningful impact in a market or society, and not all innovations require a new invention.
Technical innovation often manifests itself via the
engineering
Engineering is the use of scientific method, scientific principles to design and build machines, structures, and other items, including bridges, tunnels, roads, vehicles, and buildings. The discipline of engineering encompasses a broad rang ...
process when the problem being solved is of a technical or scientific nature. The opposite of innovation is
exnovation
In commerce and management, exnovation, an opposite of innovation, can occur when products and processes that have been tested and confirmed to be best-in-class are standardized to ensure that they are not innovated further. Companies that have fo ...
.
Definition
Surveys of the literature on innovation have found a variety of definitions. In 2009, Baregheh et al. found around 60 definitions in different scientific papers, while a 2014 survey found over 40.
Based on their survey, Baragheh et al. attempted to define a multidisciplinary definition and arrived at the following definition:
"Innovation is the multi-stage process whereby organizations transform ideas into new/improved products, service or processes, in order to advance, compete and differentiate themselves successfully in their marketplace"
In an industrial survey of how the
software industry
The software industry includes businesses for development, maintenance
Maintenance may refer to:
Biological science
* Maintenance of an organism
* Maintenance respiration
Non-technical maintenance
* Alimony, also called ''maintenance ...
defined innovation, the following definition given by Crossan and Apaydin was considered to be the most complete, which builds on the
Organisation for Economic Co-operation and Development (OECD) manual's definition:
[Edison, H., Ali, N.B., & Torkar, R. (2014)]
Towards innovation measurement in the software industry
''Journal of Systems and Software'' 86(5), 1390–407.
American sociologist
Everett Rogers
Everett M. "Ev" Rogers (March 6, 1931 – October 21, 2004) was an American communication theorist and sociologist, who originated the ''diffusion of innovations'' theory and introduced the term ''early adopter''. He was distinguished professor em ...
, defined it as follows:
"An idea, practice, or object that is perceived as new by an individual or other unit of adoption"
According to Alan Altshuler and Robert D. Behn, innovation includes original invention and creative use and defines innovation as a generation, admission and realization of new ideas, products, services and processes.
Two main dimensions of innovation are degree of
novelty
Novelty (derived from Latin word ''novus'' for "new") is the quality of being new, or following from that, of being striking, original or unusual. Novelty may be the shared experience of a new cultural phenomenon or the subjective perception of an ...
(i.e. whether an innovation is new to the firm, new to the market, new to the industry, or new to the world) and kind of innovation (i.e. whether it is process or
product-service system
Product-service systems (PSS) are business models that provide for cohesive delivery of products and services. PSS models are emerging as a means to enable collaborative consumption of both products and services, with the aim of pro-environmental ...
innovation).
In organizational scholarship, researchers have also distinguished innovation to be separate from creativity, by providing an updated definition of these two related constructs:
Peter Drucker
Peter Ferdinand Drucker (; ; November 19, 1909 – November 11, 2005) was an Austrian-American management consultant, educator, and author, whose writings contributed to the philosophical and practical foundations of the modern business co ...
wrote:
Creativity and innovation
In general, innovation is distinguished from
creativity
Creativity is a phenomenon whereby something new and valuable is formed. The created item may be intangible (such as an idea, a scientific theory, a musical composition, or a joke) or a physical object (such as an invention, a printed literary w ...
by its emphasis on the implementation of creative ideas in an economic setting.
Amabile and Pratt in 2016, drawing on the literature, distinguish between creativity ("the production of novel and useful ideas by an individual or small group of individuals working together") and innovation ("the successful implementation of creative ideas within an organization").
Types
Several frameworks have been proposed for defining types of innovation.
Sustaining vs disruptive innovation
One framework proposed by
Clayton Christensen
Clayton Magleby Christensen (April 6, 1952January 23, 2020) was an American academic and business consultant who developed the theory of "disruptive innovation", which has been called the most influential business idea of the early 21st century. ...
draws a distinction between sustaining and
disruptive innovation
In business theory, disruptive innovation is innovation that creates a new market and value network or enters at the bottom of an existing market and eventually displaces established market-leading firms, products, and alliances. The concept was ...
s. Sustaining innovation is the improvement of a product or service based on the known needs of current customers (e.g. faster microprocessors, flat screen televisions). Disruptive innovation in contrast refers to a process by which a new product or service creates a new market (e.g. transistor radio, free crowdsourced encyclopedia, etc.), eventually displacing established competitors. According to Christensen, disruptive innovations are critical to long-term success in business.
Disruptive innovation is often enabled by disruptive technology. Marco Iansiti and Karim R. Lakhani define foundational technology as having the potential to create new foundations for global technology systems over the longer term. Foundational technology tends to transform business
operating model
An operating model is both an abstract and visual representation (model) of how an organization delivers value to its customers or beneficiaries as well as how an organization actually runs itself.
Definition
There are different ways of defining t ...
s as entirely new business models
emerge over many years, with gradual and steady adoption of the innovation leading to waves of
technological
Technology is the application of knowledge to reach practical goals in a specifiable and reproducible way. The word ''technology'' may also mean the product of such an endeavor. The use of technology is widely prevalent in medicine, science, ...
and
institution
Institutions are humanly devised structures of rules and norms that shape and constrain individual behavior. All definitions of institutions generally entail that there is a level of persistence and continuity. Laws, rules, social conventions a ...
al change that gain momentum more slowly.
[
] The advent of the
packet-switched
In telecommunications, packet switching is a method of grouping data into '' packets'' that are transmitted over a digital network. Packets are made of a header and a payload. Data in the header is used by networking hardware to direct the pac ...
communication protocol
TCP/IP
The Internet protocol suite, commonly known as TCP/IP, is a framework for organizing the set of communication protocols used in the Internet and similar computer networks according to functional criteria. The foundational protocols in the suit ...
—originally introduced in 1972 to support a single
use case
In software and systems engineering, the phrase use case is a polyseme with two senses:
# A usage scenario for a piece of software; often used in the plural to suggest situations where a piece of software may be useful.
# A potential scenario ...
for
United States Department of Defense
The United States Department of Defense (DoD, USDOD or DOD) is an executive branch department of the federal government charged with coordinating and supervising all agencies and functions of the government directly related to national secu ...
electronic communication (email), and which gained widespread adoption only in the mid-1990s with the advent of the
World Wide Web
The World Wide Web (WWW), commonly known as the Web, is an information system enabling documents and other web resources to be accessed over the Internet.
Documents and downloadable media are made available to the network through web se ...
—is a foundational technology.
Four types innovation model
Another framework was suggested by Henderson and Clark. They divide innovation into four types;
* Radical innovation: "establishes a new dominant design and, hence, a new set of core design concepts embodied in components that are linked together in a new architecture." (p. 11)
* Incremental innovation: "refines and extends an established design. Improvement occurs in individual components, but the underlying core design concepts, and the links between them, remain the same." (p. 11)
* Architectural innovation: "innovation that changes only the relationships between them
he core design concepts
He or HE may refer to:
Language
* He (pronoun), an English pronoun
* He (kana), the romanization of the Japanese kana へ
* He (letter), the fifth letter of many Semitic alphabets
* He (Cyrillic), a letter of the Cyrillic script called ''He'' ...
(p. 12)
* Modular Innovation: "innovation that changes only the core design concepts of a technology" (p. 12)
While Henderson and Clark as well as Christensen talk about technical innovation there are other kinds of innovation as well, such as service innovation and organizational innovation.
Non-economic innovation
The classical definition of innovation being limited to the primary goal of generating profit for a firm, has led others to define other types of innovation such as:
social innovation
Social innovations are new social practices that aim to meet social needs in a better way than the existing solutions,Howaldt, J./ Schwarz, M"Social Innovation: Concepts, research fields and international trends" IMO international monitoring, 2010 ...
,
sustainable innovation
Specific definitions of sustainability are difficult to agree on and have varied in the literature and over time. The concept of sustainability can be used to guide decisions at the global, national, and individual levels (e.g. sustainable livin ...
(or green innovation), and
responsible innovation Responsibility may refer to:
* Collective responsibility
* Corporate social responsibility
* Duty
* Legal liability
* Legal obligation
* Legal responsibility (disambiguation)
* Media responsibility
* Moral responsibility, or personal responsibilit ...
.
History
The word "innovation" once had a quite different meaning. The first full-length discussion about innovation is the account by the Greek philosopher and historian
Xenophon
Xenophon of Athens (; grc, wikt:Ξενοφῶν, Ξενοφῶν ; – probably 355 or 354 BC) was a Greek military leader, philosopher, and historian, born in Athens. At the age of 30, Xenophon was elected commander of one of the biggest Anci ...
(430–355 BCE). He viewed the concept as multifaceted and connected it to political action. The word for innovation that he uses, 'kainotomia', had previously occurred in two plays by
Aristophanes
Aristophanes (; grc, Ἀριστοφάνης, ; c. 446 – c. 386 BC), son of Philippus, of the deme
In Ancient Greece, a deme or ( grc, δῆμος, plural: demoi, δημοι) was a suburb or a subdivision of Athens and other city-states ...
( – BCE).
Plato
Plato ( ; grc-gre, Πλάτων ; 428/427 or 424/423 – 348/347 BC) was a Greek philosopher born in Athens during the Classical period in Ancient Greece. He founded the Platonist school of thought and the Academy, the first institution ...
(died BCE) discussed innovation in his
''Laws'' dialogue and was not very fond of the concept. He was skeptical to it both in culture (dancing and art) and in education (he did not believe in introducing new games and toys to the kids).
Aristotle
Aristotle (; grc-gre, Ἀριστοτέλης ''Aristotélēs'', ; 384–322 BC) was a Greek philosopher and polymath during the Classical period in Ancient Greece. Taught by Plato, he was the founder of the Peripatetic school of phil ...
(384–322 BCE) did not like organizational innovations: he believed that all possible forms of organization had been discovered.
Before the 4th century in Rome, the words ''novitas'' and ''res nova / nova res'' were used with either negative or positive judgment on the innovator. This concept meant "renewing" and was incorporated into the new Latin verb word ''innovo'' ("I renew" or "I restore") in the centuries that followed. The ''
Vulgate
The Vulgate (; also called (Bible in common tongue), ) is a late-4th-century Latin translation of the Bible.
The Vulgate is largely the work of Jerome who, in 382, had been commissioned by Pope Damasus I to revise the Gospels u ...
'' version of the Bible (late 4th century CE) used the word in spiritual as well as political contexts. It also appeared in poetry, mainly with spiritual connotations, but was also connected to political, material and cultural aspects.
Machiavelli's ''
The Prince
''The Prince'' ( it, Il Principe ; la, De Principatibus) is a 16th-century political treatise written by Italian diplomat and political theorist Niccolò Machiavelli as an instruction guide for new princes and royals. The general theme of ''The ...
'' (1513), discusses innovation in a political setting. Machiavelli portrays it as a strategy a Prince may employ in order to cope with a constantly changing world as well as the corruption within it. Here innovation is described as introducing change in government (new laws and institutions); Machiavelli's later book ''The Discourses'' (1528) characterises innovation as imitation, as a return to the original that has been corrupted by people and by time. Thus for Machiavelli innovation came with positive connotations. This is however an exception in the usage of the concept of innovation from the 16th century and onward. No innovator from the renaissance until the late 19th century ever thought of applying the word innovator upon themselves, it was a word used to attack enemies.
From the 1400s through the 1600s, the concept of innovation was pejorative – the term was an
early-modern synonym for "rebellion", "revolt" and "
heresy
Heresy is any belief or theory that is strongly at variance with established beliefs or customs, in particular the accepted beliefs of a church or religious organization. The term is usually used in reference to violations of important religi ...
".
[
] In the 1800s people promoting
capitalism
Capitalism is an economic system based on the private ownership of the means of production and their operation for Profit (economics), profit. Central characteristics of capitalism include capital accumulation, competitive markets, pric ...
saw
socialism
Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes the e ...
as an innovation and spent a lot of energy working against it. For instance,
Goldwin Smith
Goldwin Smith (13 August 1823 – 7 June 1910) was a British historian and journalist, active in the United Kingdom and Canada. In the 1860s he also taught at Cornell University in the United States.
Life and career Early life and education
S ...
(1823-1910) saw the spread of social innovations as an attack on money and banks. These social innovations were socialism, communism, nationalization, cooperative associations.
In the 20th century the concept of innovation did not become popular until after the Second World War of 1939-1945. This is the point in time when people started to talk about ''technological'' product innovation and tie it to the idea of economic growth and competitive advantage.
Joseph Schumpeter
Joseph Alois Schumpeter (; February 8, 1883 – January 8, 1950) was an Austrian-born political economist. He served briefly as Finance Minister of German-Austria in 1919. In 1932, he emigrated to the United States to become a professor at Ha ...
(1883–1950) is often credited as the one who made the term popular - he contributed greatly to the study of
innovation economics
Innovation economics is new and growing field of economic theory and applied and experimental economics that emphasizes innovation and entrepreneurship. It comprises both the application of any type of innovations, especially technological, but ...
,
In
business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for pr ...
and in
economics
Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services.
Economics focuses on the behaviour and intera ...
, innovation can provide a catalyst for growth in an enterprise or even in an industry. With rapid advances in
transportation
Transport (in British English), or transportation (in American English), is the intentional movement of humans, animals, and goods from one location to another. Modes of transport include air, land (rail and road), water, cable, pipeline, ...
and
communications
Communication (from la, communicare, meaning "to share" or "to be in relation with") is usually defined as the transmission of information. The term may also refer to the message communicated through such transmissions or the field of inquir ...
over the past few decades, the old concepts of
factor endowment
A factor endowment, in economics, is commonly understood to be the amount of land, labor, capital, and entrepreneurship that a country possesses and can exploit for manufacturing. Countries with a large endowment of resources tend to be more prospe ...
s and
comparative advantage
In an economic model, agents have a comparative advantage over others in producing a particular good if they can produce that good at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade. Comp ...
which focused on an area's unique inputs are outmoded in today's
global economy
The world economy or global economy is the economy of all humans of the world, referring to the global economic system, which includes all economic activities which are conducted both within and between nations, including production, consumption, ...
. Schumpeter argued that industries must incessantly revolutionize the economic structure from within, that is: innovate with better or more effective processes and products, as well as with market distribution (such as the transition from the craft shop to factory). He famously asserted that "
creative destruction
Creative destruction (German: ''schöpferische Zerstörung'') is a concept in economics which since the 1950s is the most readily identified with the Austrian-born economist Joseph Schumpeter who derived it from the work of Karl Marx and pop ...
is the essential fact about
capitalism
Capitalism is an economic system based on the private ownership of the means of production and their operation for Profit (economics), profit. Central characteristics of capitalism include capital accumulation, competitive markets, pric ...
".
Entrepreneur
Entrepreneurship is the creation or extraction of economic value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally encountered in starting a business, which may include other values th ...
s continuously search for better ways to satisfy their
consumer base with improved quality, durability, service and price - searches which may come to fruition in innovation with advanced technologies and organizational strategies.
A prime example of innovation involved the boom of
Silicon Valley
Silicon Valley is a region in Northern California that serves as a global center for high technology and innovation. Located in the southern part of the San Francisco Bay Area, it corresponds roughly to the geographical areas San Mateo County ...
start-ups out of the
Stanford Industrial Park
Stanford Research Park (SRP) is a technology park established in 1951 as a joint initiative between Stanford University and the Palo Alto, California, City of Palo Alto. It has more than 150 companies, including Hewlett-Packard, Tesla Motors, TIB ...
. In 1957, dissatisfied employees of
Shockley Semiconductor
Shockley Semiconductor Laboratory was a pioneering semiconductor developer founded by William Shockley, and funded by Beckman Instruments, Inc., in 1955. It was the first high technology company in what came to be known as Silicon Valley to wo ...
, the company of
Nobel laureate
The Nobel Prizes ( sv, Nobelpriset, no, Nobelprisen) are awarded annually by the Royal Swedish Academy of Sciences, the Swedish Academy, the Karolinska Institutet, and the Norwegian Nobel Committee to individuals and organizations who make out ...
and co-inventor of the
transistor
upright=1.4, gate (G), body (B), source (S) and drain (D) terminals. The gate is separated from the body by an insulating layer (pink).
A transistor is a semiconductor device used to Electronic amplifier, amplify or electronic switch, switch e ...
William Shockley
William Bradford Shockley Jr. (February 13, 1910 – August 12, 1989) was an American physicist and inventor. He was the manager of a research group at Bell Labs that included John Bardeen and Walter Brattain. The three scientists were jointly ...
, left to form an independent firm,
Fairchild Semiconductor
Fairchild Semiconductor International, Inc. was an American semiconductor company based in San Jose, California. Founded in 1957 as a division of Fairchild Camera and Instrument, it became a pioneer in the manufacturing of transistors and of int ...
. After several years, Fairchild developed into a formidable presence in the sector. Eventually, these founders left to start their own companies based on their own unique ideas, and then leading employees started their own firms. Over the next 20 years this process resulted in the momentous
startup-company explosion of
information-technology firms. Silicon Valley began as 65 new enterprises born out of Shockley's eight former employees.
Another example involves
business incubator
Business incubator is an organization that helps startup companies and individual entrepreneurs to develop their businesses by providing a fullscale range of services starting with management training and office space and ending with venture ca ...
s – a phenomenon introduced in 1959 and subsequently nurtured by governments around the world. Such "incubators", located close to knowledge clusters (mostly research-based) like universities or other government
excellence centres – aim primarily to channel generated knowledge to applied innovation outcomes in order to stimulate regional or national
economic growth
Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...
.
In the 21st century the
Islamic State
An Islamic state is a State (polity), state that has a form of government based on sharia, Islamic law (sharia). As a term, it has been used to describe various historical Polity, polities and theories of governance in the Islamic world. As a t ...
(IS) movement, while decrying
religious innovations, has innovated in military tactics, recruitment,
ideology
An ideology is a set of beliefs or philosophies attributed to a person or group of persons, especially those held for reasons that are not purely epistemic, in which "practical elements are as prominent as theoretical ones." Formerly applied pri ...
and geopolitical activity.
Process of innovation
An early model included only three phases of innovation. According to Utterback (1971), these phases were: 1) idea generation, 2) problem solving, and 3) implementation. By the time one completed phase 2, one had an invention, but until one got it to the point of having an economic impact, one didn't have an innovation. Diffusion wasn't considered a phase of innovation. Focus at this point in time was on manufacturing.
All organizations can innovate, including for example hospitals, universities, and local governments. The organization requires a proper structure in order to retain competitive advantage. Organizations can also improve profits and performance by providing work groups opportunities and resources to innovate, in addition to employee's core job tasks. Executives and managers have been advised to break away from traditional ways of thinking and use change to their advantage. The world of work is changing with the increased use of technology and companies are becoming increasingly competitive. Companies will have to downsize or reengineer their operations to remain competitive. This will affect employment as businesses will be forced to reduce the number of people employed while accomplishing the same amount of work if not more.
For instance, former Mayor
Martin O’Malley
Martin Joseph O'Malley (born January 18, 1963) is an American lawyer and former politician who served as the 61st Governor of Maryland from 2007 to 2015. A member of the Democratic Party, he was Mayor of Baltimore from 1999 to 2007.
O'Malle ...
pushed the
City of Baltimore
Baltimore ( , locally: or ) is the most populous city in the U.S. state of Maryland, fourth most populous city in the Mid-Atlantic, and the 30th most populous city in the United States with a population of 585,708 in 2020. Baltimore was ...
to use
CitiStat, a
performance-measurement data and management system that allows city officials to maintain statistics on several areas from crime trends to the conditions of
pothole
A pothole is a depression in a road surface, usually asphalt pavement, where traffic has removed broken pieces of the pavement. It is usually the result of water in the underlying soil structure and traffic passing over the affected area. Water ...
s. This system aided in better evaluation of policies and procedures with accountability and efficiency in terms of time and money. In its first year, CitiStat saved the city $13.2 million. Even
mass transit
Public transport (also known as public transportation, public transit, mass transit, or simply transit) is a system of transport for passengers by group travel systems available for use by the general public unlike private transport, typical ...
systems have innovated with
hybrid
Hybrid may refer to:
Science
* Hybrid (biology), an offspring resulting from cross-breeding
** Hybrid grape, grape varieties produced by cross-breeding two ''Vitis'' species
** Hybridity, the property of a hybrid plant which is a union of two dif ...
bus fleets to
real-time tracking at bus stands. In addition, the growing use of
mobile data terminal
A mobile data terminal (MDT) or mobile digital computer (MDC) is a computerized device used in emergency services, public transport, taxicabs, package delivery, roadside assistance, and logistics, among other fields, to communicate with a centra ...
s in vehicles, that serve as communication hubs between vehicles and a control center, automatically send data on location, passenger counts, engine performance, mileage and other information. This tool helps to deliver and manage transportation systems.
Still other innovative strategies include
hospital
A hospital is a health care institution providing patient treatment with specialized health science and auxiliary healthcare staff and medical equipment. The best-known type of hospital is the general hospital, which typically has an emerge ...
s digitizing medical information in
electronic medical records
An electronic health record (EHR) is the systematized collection of patient and population electronically stored health information in a digital format. These records can be shared across different health care settings. Records are shared throu ...
. For example, the
U.S. Department of Housing and Urban Development
The United States Department of Housing and Urban Development (HUD) is one of the executive departments of the U.S. federal government. It administers federal housing and urban development laws. It is headed by the Secretary of Housing and Urb ...
's
HOPE VI HOPE VI is a program of the United States Department of Housing and Urban Development. It is intended to revitalize the worst public housing projects in the United States into mixed-income developments. Its philosophy is largely based on New Urban ...
initiatives turned severely distressed
public housing
Public housing is a form of housing tenure in which the property is usually owned by a government authority, either central or local. Although the common goal of public housing is to provide affordable housing, the details, terminology, def ...
in urban areas into
revitalized, mixed-income environments; the
Harlem Children’s Zone
The Harlem Children's Zone (HCZ) is a nonprofit organization for poverty-stricken children and families living in Harlem, providing free support in the form of parenting workshops, a preschool program, three charter schools, and child-oriented ...
used a community-based approach to educate local area children; and the
Environmental Protection Agency
A biophysical environment is a biotic and abiotic surrounding of an organism or population, and consequently includes the factors that have an influence in their survival, development, and evolution. A biophysical environment can vary in scale f ...
's
brownfield grants facilitates turning over
brownfield
In urban planning, brownfield land is any previously developed land that is not currently in use. It may be potentially contaminated, but this is not required for the area to be considered brownfield. The term is also used to describe land prev ...
s for
environmental protection
Environmental protection is the practice of protecting the natural environment by individuals, organizations and governments. Its objectives are to conserve natural resources and the existing natural environment and, where possible, to repair dam ...
,
green spaces,
community
A community is a social unit (a group of living things) with commonality such as place, norms, religion, values, customs, or identity. Communities may share a sense of place situated in a given geographical area (e.g. a country, village, tow ...
and
commercial development
Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market.
An early form of trade, barter, saw the direct excha ...
.
Sources of innovation
Innovation may occur due to effort from a range of different agents, by chance, or as a result of a major system failure. According to
Peter F. Drucker
Peter Ferdinand Drucker (; ; November 19, 1909 – November 11, 2005) was an Austrian-American management consultant, educator, and author, whose writings contributed to the philosophical and practical foundations of the modern business co ...
, the general sources of innovations are changes in industry structure, in market structure, in local and global demographics, in human perception, in the amount of available scientific knowledge, etc.
![Technological Change](https://upload.wikimedia.org/wikipedia/commons/8/8a/Technological_Change.jpg)
In the simplest
linear model of innovation The Linear Model of Innovation was an early model designed to understand the relationship of science and technology that begins with basic research that flows into applied research, development and diffusion
It posits scientific research as the ...
the traditionally recognized source is ''manufacturer innovation''. This is where an agent (person or business) innovates in order to sell the innovation. Specifically, R&D measurement is the commonly used input for innovation, in particular in the business sector, named Business Expenditure on R&D (BERD) that grew over the years on the expenses of the declining R&D invested by the public sector.
Another source of innovation, only now becoming widely recognized, is ''end-user innovation''. This is where an agent (person or company) develops an innovation for their own (personal or in-house) use because existing products do not meet their needs.
MIT
The Massachusetts Institute of Technology (MIT) is a private land-grant research university in Cambridge, Massachusetts. Established in 1861, MIT has played a key role in the development of modern technology and science, and is one of the m ...
economist
Eric von Hippel
Eric von Hippel (born August 27, 1941) is an American economist and a professor at the MIT Sloan School of Management, specializing in the nature and economics of distributed and open innovation. He is best known for his work in developing the ...
has identified end-user innovation as, by far, the most important and critical in his classic book on the subject, ''"The Sources of Innovation"''.
The robotics engineer
Joseph F. Engelberger
Joseph Frederick Engelberger (July 26, 1925 – December 1, 2015) was an American physicist, engineer and entrepreneur. Licensing the original patent awarded to inventor George Devol, Engelberger developed the first industrial robot in the Uni ...
asserts that innovations require only three things:
# a recognized need
# competent people with relevant technology
# financial support
The Kline
chain-linked model
The chain-linked model or Kline model of innovation was introduced by mechanical engineer Stephen J. Kline in 1985, and further described by Kline and economist Nathan Rosenberg in 1986. The chain-linked model is an attempt to describe complexities ...
of innovation places emphasis on potential market needs as drivers of the innovation process, and describes the complex and often iterative feedback loops between marketing, design, manufacturing, and R&D.
Facilitating innovation
Innovation by businesses is achieved in many ways, with much attention now given to formal
research and development
Research and development (R&D or R+D), known in Europe as research and technological development (RTD), is the set of innovative activities undertaken by corporations or governments in developing new services or products, and improving existi ...
(R&D) for "breakthrough innovations". R&D help spur on patents and other scientific innovations that leads to productive growth in such areas as industry, medicine, engineering, and government.
[Mark, M., Katz, B., Rahman, S., and Warren, D. (2008]
''MetroPolicy: Shaping A New Federal Partnership for a Metropolitan Nation''
Brookings Institution: Metropolitan Policy Program Report. pp. 4–103. Yet, innovations can be developed by less formal on-the-job modifications of practice, through exchange and combination of professional experience and by many other routes. Investigation of relationship between the concepts of innovation and technology transfer revealed overlap. The more radical and revolutionary innovations tend to emerge from R&D, while more incremental innovations may emerge from practice – but there are many exceptions to each of these trends.
Information technology
Information technology (IT) is the use of computers to create, process, store, retrieve, and exchange all kinds of data . and information. IT forms part of information and communications technology (ICT). An information technology system (I ...
and changing business processes and management style can produce a work climate favorable to innovation. For example, the software tool company
Atlassian
Atlassian Corporation () is an Australian software company that develops products for software developers, project managers and other software development teams. The company is domiciled in Delaware, with global headquarters in Sydney, Australi ...
conducts quarterly "ShipIt Days" in which employees may work on anything related to the company's products. Google employees work on self-directed projects for 20% of their time (known as
Innovation Time Off
Side project time is a type of employee benefit constituting a guarantee from employers that their employees may work on their personal projects during some part (usually a percentage) of their time at work. Side project time is limited by two stip ...
). Both companies cite these bottom-up processes as major sources for new products and features.
An important innovation factor includes customers buying products or using services. As a result, organizations may incorporate users in
focus group
A focus group is a group interview involving a small number of demographically similar people or participants who have other common traits/experiences. Their reactions to specific researcher/evaluator-posed questions are studied. Focus groups are ...
s (user centered approach), work closely with so-called
lead users Lead user is a term developed by American economist Eric von Hippel (). His definition for lead user is:
#Lead users face needs that will be general in a marketplace – but face them months or years before the bulk of that marketplace encounters ...
(lead user approach), or users might adapt their products themselves. The lead user method focuses on idea generation based on leading users to develop breakthrough innovations. U-STIR, a project to innovate
Europe
Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
's surface
transportation
Transport (in British English), or transportation (in American English), is the intentional movement of humans, animals, and goods from one location to another. Modes of transport include air, land (rail and road), water, cable, pipeline, ...
system, employs such workshops. Regarding this
user innovation
__NOTOC__
User innovation refers to innovation by intermediate users (e.g. user firms) or consumer users (individual end-users or user communities), rather than by suppliers (producers or manufacturers). This is a concept closely aligned to co-des ...
, a great deal of innovation is done by those actually implementing and using technologies and products as part of their normal activities. Sometimes user-innovators may become
entrepreneur
Entrepreneurship is the creation or extraction of economic value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally encountered in starting a business, which may include other values th ...
s, selling their product, they may choose to trade their innovation in exchange for other innovations, or they may be adopted by their suppliers. Nowadays, they may also choose to freely reveal their innovations, using methods like
open source
Open source is source code that is made freely available for possible modification and redistribution. Products include permission to use the source code, design documents, or content of the product. The open-source model is a decentralized sof ...
. In such networks of innovation the users or communities of users can further develop technologies and reinvent their social meaning.
One technique for innovating a solution to an identified problem is to actually attempt an experiment with many possible solutions. This technique was famously used by
Thomas Edison's laboratory to find a version of the
incandescent light bulb
An incandescent light bulb, incandescent lamp or incandescent light globe is an electric light with a wire filament heated until it glows. The filament is enclosed in a glass bulb with a vacuum or inert gas to protect the filament from oxida ...
economically viable for home use, which involved searching through thousands of possible
filament designs before settling on carbonized bamboo.
This technique is sometimes used in pharmaceutical
drug discovery
In the fields of medicine, biotechnology and pharmacology, drug discovery is the process by which new candidate medications are discovered.
Historically, drugs were discovered by identifying the active ingredient from traditional remedies or by ...
. Thousands of chemical compounds are subjected to
high-throughput screening
High-throughput screening (HTS) is a method for scientific experimentation especially used in drug discovery and relevant to the fields of biology, materials science and chemistry. Using robotics, data processing/control software, liquid handlin ...
to see if they have any activity against a target molecule which has been identified as biologically significant to a disease. Promising compounds can then be studied; modified to improve efficacy and reduce side effects, evaluated for cost of manufacture; and if successful turned into treatments.
The related technique of
A/B testing
A/B testing (also known as bucket testing, split-run testing, or split testing) is a user experience research methodology. A/B tests consist of a randomized experiment that usually involves two variants (A and B), although the concept can be also ...
is often used to help optimize the design of
web site
A website (also written as a web site) is a collection of web pages and related content that is identified by a common domain name and published on at least one web server. Examples of notable websites are Google, Facebook, Amazon, and Wikipe ...
s and
mobile app
A mobile application or app is a computer program or software application designed to run on a mobile device such as a phone, tablet, or watch. Mobile applications often stand in contrast to desktop applications which are designed to run on d ...
s. This is used by major sites such as
amazon.com
Amazon.com, Inc. ( ) is an American multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It has been referred to as "one of the most influential economi ...
,
Facebook
Facebook is an online social media and social networking service owned by American company Meta Platforms. Founded in 2004 by Mark Zuckerberg with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin M ...
,
Google
Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. ...
, and
Netflix
Netflix, Inc. is an American subscription video on-demand over-the-top streaming service and production company based in Los Gatos, California. Founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California, it offers a fil ...
.
[Why These Tech Companies Keep Running Thousands Of Failed Experiments](_blank)
Fast Company.com (21 September 2016). Retrieved 16 October 2018. Procter & Gamble
The Procter & Gamble Company (P&G) is an American multinational consumer goods corporation headquartered in Cincinnati, Ohio, founded in 1837 by William Procter and James Gamble. It specializes in a wide range of personal health/consumer hea ...
uses computer-simulated products and online user panels to conduct larger numbers of experiments to guide the design, packaging, and shelf placement of consumer products.
Capital One
Capital One Financial Corporation is an American bank holding company specializing in credit cards, auto loans, banking, and savings accounts, headquartered in McLean, Virginia with operations primarily in the United States. It is on the list o ...
uses this technique to drive credit card marketing offers.
Goals and failures
Programs of organizational innovation are typically tightly linked to organizational goals and growth objectives, to the
business plan
A business plan is a formal written document containing the goals of a business, the methods for attaining those goals, and the time-frame for the achievement of the goals. It also describes the nature of the business, background information on t ...
, and to
market
Market is a term used to describe concepts such as:
*Market (economics), system in which parties engage in transactions according to supply and demand
*Market economy
*Marketplace, a physical marketplace or public market
Geography
*Märket, an ...
competitive positioning. Davila et al. (2006) note, "Companies cannot grow through cost reduction and reengineering alone... Innovation is the key element in providing aggressive top-line growth, and for increasing bottom-line results".
[Davila, T., Epstein, M. J., and Shelton, R. (2006). "Making Innovation Work: How to Manage It, Measure It, and Profit from It." Upper Saddle River: Wharton School Publishing.]
One survey across a large number of manufacturing and services organizations found that systematic programs of organizational innovation are most frequently driven by: improved
quality
Quality may refer to:
Concepts
*Quality (business), the ''non-inferiority'' or ''superiority'' of something
*Quality (philosophy), an attribute or a property
*Quality (physics), in response theory
*Energy quality, used in various science discipli ...
, creation of new
market
Market is a term used to describe concepts such as:
*Market (economics), system in which parties engage in transactions according to supply and demand
*Market economy
*Marketplace, a physical marketplace or public market
Geography
*Märket, an ...
s, extension of the
product
Product may refer to:
Business
* Product (business), an item that serves as a solution to a specific consumer problem.
* Product (project management), a deliverable or set of deliverables that contribute to a business solution
Mathematics
* Produ ...
range, reduced
labor cost Direct labor cost is a part of wage-bill or payroll that can be specifically and consistently assigned to or associated with the manufacture of a product, a particular work order, or provision of a service. Also, we can say it is the cost of the wor ...
s, improved
production process
Industrial processes are procedures involving chemical, physical, electrical or mechanical steps to aid in the manufacturing of an item or items, usually carried out on a very large scale. Industrial processes are the key components of heavy ind ...
es, reduced materials cost, reduced
environmental damage
Environmental degradation is the deterioration of the environment through depletion of resources such as quality of air, water and soil; the destruction of ecosystems; habitat destruction; the extinction of wildlife; and pollution. It is defin ...
, replacement of
product
Product may refer to:
Business
* Product (business), an item that serves as a solution to a specific consumer problem.
* Product (project management), a deliverable or set of deliverables that contribute to a business solution
Mathematics
* Produ ...
s/
services
Service may refer to:
Activities
* Administrative service, a required part of the workload of university faculty
* Civil service, the body of employees of a government
* Community service, volunteer service for the benefit of a community or a p ...
, reduced
energy
In physics, energy (from Ancient Greek: ἐνέργεια, ''enérgeia'', “activity”) is the quantitative property that is transferred to a body or to a physical system, recognizable in the performance of work and in the form of heat a ...
consumption, and conformance to
regulation
Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. For ...
s.
Different goals are appropriate for different products, processes, and services. According to Andrea Vaona and Mario Pianta, some example goals of innovation could stem from two different types of technological strategies: ''technological competitiveness'' and ''active price competitiveness''. ''Technological competitiveness'' may have a tendency to be pursued by smaller firms and can be characterized as "efforts for market-oriented innovation, such as a strategy of market expansion and patenting activity."
On the other hand, ''active price competitiveness'' is geared toward process innovations that lead to efficiency and flexibility, which tend to be pursued by large, established firms as they seek to expand their market foothold.
Whether innovation goals are successfully achieved or otherwise depends greatly on the environment prevailing in the organization.
Failure of organizational innovation programs has been widely researched and the causes vary considerably. Some causes are external to the organization and outside its influence of control. Others are internal and ultimately within the control of the organization. Internal causes of failure can be divided into causes associated with the cultural infrastructure and causes associated with the innovation process itself. David O'Sullivan wrote that causes of failure within the innovation process in most organizations can be distilled into five types: poor goal definition, poor alignment of actions to goals, poor participation in teams, poor monitoring of results, and poor communication and
access to information
Access may refer to:
Companies and organizations
* ACCESS (Australia), an Australian youth network
* Access (credit card), a former credit card in the United Kingdom
* Access Co., a Japanese software company
* Access Healthcare, an Indian BPO se ...
.
Diffusion
![InnovationLifeCycle](https://upload.wikimedia.org/wikipedia/commons/e/e0/InnovationLifeCycle.jpg)
Diffusion of innovation research was first started in 1903 by seminal researcher
Gabriel Tarde
Gabriel Tarde (; in full Jean-Gabriel De Tarde; 12 March 1843 – 13 May 1904) was a French sociologist, criminologist and social psychologist who conceived sociology as based on small psychological interactions among individuals (much as i ...
, who first plotted the S-shaped
diffusion curve Diffusion curves are vector graphic primitives for creating smooth-shaded images. Each diffusion curve partitions the 2D graphics space through which it is drawn, defining different colors on either side. When rendered, these colors then spread i ...
. Tarde defined the innovation-decision process as a series of steps that include:
# knowledge
# forming an attitude
# a decision to adopt or reject
# implementation and use
# confirmation of the decision
Once innovation occurs, innovations may be spread from the innovator to other individuals and groups. This process has been proposed that the lifecycle of innovations can be described using the '
s-curve' or
diffusion curve Diffusion curves are vector graphic primitives for creating smooth-shaded images. Each diffusion curve partitions the 2D graphics space through which it is drawn, defining different colors on either side. When rendered, these colors then spread i ...
. The s-curve maps growth of revenue or productivity against time. In the early stage of a particular innovation, growth is relatively slow as the new product establishes itself. At some point, customers begin to demand and the product growth increases more rapidly. New incremental innovations or changes to the product allow growth to continue. Towards the end of its lifecycle, growth slows and may even begin to decline. In the later stages, no amount of new investment in that product will yield a normal rate of return.
The s-curve derives from an assumption that new products are likely to have "product life" – i.e., a start-up phase, a rapid increase in revenue and eventual decline. In fact, the great majority of innovations never get off the bottom of the curve, and never produce normal returns.
Innovative companies will typically be working on new innovations that will eventually replace older ones. Successive s-curves will come along to replace older ones and continue to drive growth upwards. In the figure above the first curve shows a current technology. The second shows an
emerging technology
Emerging technologies are technologies whose development, practical applications, or both are still largely unrealized. These technologies are generally new but also include older technologies finding new applications. Emerging technologies ar ...
that currently yields lower growth but will eventually overtake current technology and lead to even greater levels of growth. The length of life will depend on many factors.
Measures
Measuring innovation is inherently difficult as it implies commensurability so that comparisons can be made in quantitative terms. Innovation, however, is by definition novelty. Comparisons are thus often meaningless across products or service. Nevertheless, Edison et al.
in their review of literature on
innovation management
Innovation management is a combination of the management of innovation processes, and change management. It refers to product, business process, marketing and organizational innovation. Innovation management is the subject of ISO 56000 (formerly ...
found 232 innovation metrics. They categorized these measures along five dimensions; i.e. inputs to the innovation process, output from the innovation process, effect of the innovation output, measures to access the activities in an innovation process and availability of factors that facilitate such a process.
There are two different types of measures for innovation: the organizational level and the political level.
Organizational-level
:The measure of innovation at the organizational level relates to individuals, team-level assessments, and private companies from the smallest to the largest company. Measure of innovation for organizations can be conducted by surveys, workshops, consultants, or internal benchmarking. There is today no established general way to measure organizational innovation. Corporate measurements are generally structured around
balanced scorecard
A balanced scorecard is a strategy performance management tool – a well structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from t ...
s which cover several aspects of innovation such as business measures related to finances, innovation process efficiency, employees' contribution and motivation, as well benefits for customers. Measured values will vary widely between businesses, covering for example new product revenue, spending in R&D, time to market, customer and employee perception & satisfaction, number of patents, additional sales resulting from past innovations.
Political-level
:For the political level, measures of innovation are more focused on a country or region
competitive advantage
In business, a competitive advantage is an attribute that allows an organization to outperform its competitors.
A competitive advantage may include access to natural resources, such as high-grade ores or a low-cost power source, highly skilled ...
through innovation. In this context, organizational capabilities can be evaluated through various evaluation frameworks, such as those of the European Foundation for Quality Management. The
OECD
The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...
Oslo Manual (1992) suggests standard guidelines on measuring technological product and process innovation. Some people consider the
Oslo Manual
Oslo ( , , or ; sma, Oslove) is the capital and most populous city of Norway. It constitutes both a county and a municipality. The municipality of Oslo had a population of in 2022, while the city's greater urban area had a population of ...
complementary to the
Frascati Manual from 1963. The new Oslo Manual from 2018 takes a wider perspective to innovation, and includes marketing and organizational innovation. These standards are used for example in the European
Community Innovation Survey The Community Innovation Surveys (CIS) are a series of statistical survey, surveys executed by national statistics, statistical offices throughout the European Union and in Norway and Iceland. The harmonized surveys are designed to give information ...
s.
Other ways of measuring innovation have traditionally been expenditure, for example, investment in R&D (Research and Development) as percentage of GNP (Gross National Product). Whether this is a good measurement of innovation has been widely discussed and the Oslo Manual has incorporated some of the critique against earlier methods of measuring. The traditional methods of measuring still inform many policy decisions. The EU
Lisbon Strategy
The Lisbon Strategy, also known as the Lisbon Agenda or Lisbon Process, was an action and development plan devised in 2000, for the economy of the European Union between 2000 and 2010. A pivotal role in its formulation was played by the Portuguese ...
has set as a goal that their average expenditure on R&D should be 3% of GDP.
Indicators
Many scholars claim that there is a great bias towards the "science and technology mode" (S&T-mode or STI-mode), while the "learning by doing, using and interacting mode" (DUI-mode) is ignored and measurements and research about it rarely done. For example, an institution may be high tech with the latest equipment, but lacks crucial doing, using and interacting tasks important for innovation.
A common industry view (unsupported by empirical evidence) is that comparative
cost-effectiveness
Cost-effectiveness analysis (CEA) is a form of economic analysis that compares the relative costs and outcomes (effects) of different courses of action. Cost-effectiveness analysis is distinct from cost–benefit analysis, which assigns a monetar ...
research is a form of
price control
Price controls are restrictions set in place and enforced by governments, on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of good ...
which reduces returns to industry, and thus limits R&D expenditure, stifles future innovation and compromises new products access to markets.
Some academics claim cost-effectiveness research is a valuable value-based measure of innovation which accords "truly significant" therapeutic advances (i.e. providing "health gain") higher prices than free market mechanisms. Such
value-based pricing Value-based price (also value optimized pricing and ''charging what the market will bear'') is a pricing strategy which sets prices primarily, but not exclusively, according to the perceived or estimated value of a product or service to the customer ...
has been viewed as a means of indicating to industry the type of innovation that should be rewarded from the public purse.
An Australian academic developed the case that national comparative
cost-effectiveness analysis
Cost-effectiveness analysis (CEA) is a form of economic analysis that compares the relative costs and outcomes (effects) of different courses of action. Cost-effectiveness analysis is distinct from cost–benefit analysis, which assigns a monetar ...
systems should be viewed as measuring "health innovation" as an
evidence-based policy
Evidence-based policy is an idea in public policy proposing that policy decisions should be based on, or informed by, rigorously established objective evidence. The implied contrast is with policymaking based on ideology, 'common sense,' anecd ...
concept for valuing innovation distinct from valuing through competitive markets, a method which requires strong
anti-trust
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
laws to be effective, on the basis that both methods of assessing
pharmaceutical innovations Pharmaceutical innovations are currently guided by a patent system, the patent system protects the innovator of medicines for a period of time. The patent system does not currently stimulate innovation or pricing that provides access to medicine for ...
are mentioned in annex 2C.1 of the
Australia-United States Free Trade Agreement.
Indices
Several indices attempt to measure innovation and rank entities based on these measures, such as:
*
Bloomberg Innovation Index
Bloomberg L.P. is a privately held financial, software, data, and media company headquartered in Midtown Manhattan, New York City. It was co-founded by Michael Bloomberg in 1981, with Thomas Secunda, Duncan MacMillan, Charles Zegar, and a ...
*"Bogota Manual" similar to the Oslo Manual, is focused on Latin America and the Caribbean countries.
*"Creative Class" developed by
Richard Florida
Richard L. Florida is an American urban studies theorist focusing on social and economic theory. He is a professor at the Rotman School of Management at the University of Toronto and a Distinguished Fellow at NYU's School of Professional Studies. ...
*
EIU Innovation Ranking EIU may refer to:
* Eastern Illinois University, in Charleston, Illinois, United States
* Economist Intelligence Unit, a British research and advisory company
* Eurasia International University
Eurasia International University (EIU) ( hy, Եվր ...
*
Global Competitiveness Report
The ''Global Competitiveness Report'' (GCR) is a yearly report published by the World Economic Forum. Since 2004, the ''Global Competitiveness Report'' ranks countries based on the Global Competitiveness Index, developed by Xavier Sala-i-Martin an ...
*
Global Innovation Index
The Global Innovation Index is an annual ranking of countries by their capacity for, and success in, innovation, published by the World Intellectual Property Organization. It was started in 2007 by INSEAD and ''World Business'', a British maga ...
(GII), by
INSEAD
INSEAD, a contraction of "Institut Européen d'Administration des Affaires" () is a non-profit business school that maintains campuses in Europe ( Fontainebleau, France), Asia (Singapore), the Middle East (Abu Dhabi, UAE), and North America (San ...
*
Information Technology and Innovation Foundation (ITIF) IndexInnovation 360– From the World Bank. Aggregates innovation indicators (and more) from a number of different public sources
*Innovation Capacity Index (ICI) published by a large number of international professors working in a collaborative fashion. The top scorers of ICI 2009–2010 were: 1. Sweden 82.2; 2. Finland 77.8; and 3. United States 77.5
* Innovation Index, developed by the
Indiana Business Research Center The Indiana Business Research Center (IBRC), established in 1925, is a research unit in the Kelley School of Business at Indiana University. The IBRC provides and interprets economic information for the state’s business, government and nonprofit o ...
, to measure innovation capacity at the county or regional level in the United States
*
Innovation Union Scoreboard
The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body o ...
*
innovationsindikator for Germany, developed by the
Federation of German Industries
The Federation of German Industries (german: Bundesverband der Deutschen Industrie (BDI)) is the umbrella organization of German industry and industry-related service providers. It represents 39 industry associations and more than 100,000 compani ...
(Bundesverband der Deutschen Industrie) in 2005
*
INSEAD
INSEAD, a contraction of "Institut Européen d'Administration des Affaires" () is a non-profit business school that maintains campuses in Europe ( Fontainebleau, France), Asia (Singapore), the Middle East (Abu Dhabi, UAE), and North America (San ...
Innovation Efficacy Index
*
International Innovation Index
The International Innovation Index is a global index measuring the level of innovation of a country, produced jointly by The Boston Consulting Group (BCG), the National Association of Manufacturers (NAM), and The Manufacturing Institute (MI), the ...
, produced jointly by
The Boston Consulting Group
Boston Consulting Group, Inc. (BCG) is an American global management consulting firm founded in 1963 and headquartered in Boston, Massachusetts. It is one of the Big Three (or MBB, the world’s three largest management consulting firms by rev ...
, the
National Association of Manufacturers
The National Association of Manufacturers (NAM) is an advocacy group headquartered in Washington, D.C., with additional offices across the United States. It is the nation's largest manufacturing industrial trade association, representing 14,000 s ...
(NAM) and its nonpartisan research affiliate The Manufacturing Institute, is a worldwide index measuring the level of innovation in a country; NAM describes it as the "largest and most comprehensive global index of its kind"
*Management Innovation Index – Model for Managing Intangibility of Organizational Creativity: Management Innovation Index
* NYCEDC Innovation Index, by the New York City Economic Development Corporation, tracks New York City's "transformation into a center for high-tech innovation. It measures innovation in the City's growing science and technology industries and is designed to capture the effect of innovation on the City's economy"
* OECD
Oslo Manual
Oslo ( , , or ; sma, Oslove) is the capital and most populous city of Norway. It constitutes both a county and a municipality. The municipality of Oslo had a population of in 2022, while the city's greater urban area had a population of ...
is focused on North America, Europe, and other rich economies
* State Technology and Science Index, developed by the
Milken Institute
The Milken Institute is an independent economic think tank based in Santa Monica, California with offices in Washington, DC, New York, Miami, London, Abu Dhabi, and Singapore. It publishes research and hosts conferences that apply market-based p ...
, is a U.S.-wide benchmark to measure the science and technology capabilities that furnish high paying jobs based around key components
*
World Competitiveness Scoreboard
In its most general sense, the term "world" refers to the totality of entities, to the whole of reality or to everything that is. The nature of the world has been conceptualized differently in different fields. Some conceptions see the worl ...
Rankings
Common areas of focus include:
high-tech
High technology (high tech), also known as advanced technology (advanced tech) or exotechnology, is technology that is at the cutting edge: the highest form of technology available. It can be defined as either the most complex or the newest te ...
companies,
manufacturing
Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a r ...
,
patent
A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A p ...
s,
post secondary education
Tertiary education, also referred to as third-level, third-stage or post-secondary education, is the educational level following the completion of secondary education. The World Bank, for example, defines tertiary education as including univers ...
,
research and development
Research and development (R&D or R+D), known in Europe as research and technological development (RTD), is the set of innovative activities undertaken by corporations or governments in developing new services or products, and improving existi ...
, and research personnel. The left ranking of the top 10 countries below is based on the 2020
Bloomberg Innovation Index
Bloomberg L.P. is a privately held financial, software, data, and media company headquartered in Midtown Manhattan, New York City. It was co-founded by Michael Bloomberg in 1981, with Thomas Secunda, Duncan MacMillan, Charles Zegar, and a ...
. However, studies may vary widely; for example the
Global Innovation Index
The Global Innovation Index is an annual ranking of countries by their capacity for, and success in, innovation, published by the World Intellectual Property Organization. It was started in 2007 by INSEAD and ''World Business'', a British maga ...
2016 ranks
Switzerland
). Swiss law does not designate a ''capital'' as such, but the federal parliament and government are installed in Bern, while other federal institutions, such as the federal courts, are in other cities (Bellinzona, Lausanne, Luzern, Neuchâtel ...
as number one wherein countries like
South Korea
South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...
,
Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
, and
China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
do not even make the top ten.
Rate of innovation
In 2005
Jonathan Huebner
Jonathan may refer to:
*Jonathan (name), a masculine given name
Media
*Jonathan (1970 film), ''Jonathan'' (1970 film), a German film directed by Hans W. Geißendörfer
*Jonathan (2016 film), ''Jonathan'' (2016 film), a German film directed by ...
, a
physicist
A physicist is a scientist who specializes in the field of physics, which encompasses the interactions of matter and energy at all length and time scales in the physical universe.
Physicists generally are interested in the root or ultimate caus ...
working at the
Pentagon
In geometry, a pentagon (from the Greek πέντε ''pente'' meaning ''five'' and γωνία ''gonia'' meaning ''angle'') is any five-sided polygon or 5-gon. The sum of the internal angles in a simple pentagon is 540°.
A pentagon may be simpl ...
's
Naval Air Warfare Center Naval Air Warfare Centers are research organizations within Naval Air Systems Command. The centers are grouped within the following divisions:
Aircraft division
The Naval Air Warfare Center Aircraft Division (NAWCAD) conducts research, development, ...
, argued on the basis of both U.S.
patent
A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A p ...
s and world technological breakthroughs, per capita, that the rate of human technological innovation peaked in 1873 and has been slowing ever since.
In his article, he asked "Will the level of technology reach a maximum and then decline as in the Dark Ages?"
[ In later comments to '']New Scientist
''New Scientist'' is a magazine covering all aspects of science and technology. Based in London, it publishes weekly English-language editions in the United Kingdom, the United States and Australia. An editorially separate organisation publishe ...
'' magazine, Huebner clarified that while he believed that we will reach a rate of innovation in 2024 equivalent to that of the Dark Ages, he was not predicting the reoccurrence of the Dark Ages themselves.
John Smart criticized the claim and asserted that technological singularity
The technological singularity—or simply the singularity—is a hypothetical future point in time at which technological growth becomes uncontrollable and irreversible, resulting in unforeseeable changes to human civilization. According to the m ...
researcher Ray Kurzweil
Raymond Kurzweil ( ; born February 12, 1948) is an American computer scientist, author, inventor, and futurist. He is involved in fields such as optical character recognition (OCR), text-to-speech synthesis, speech recognition technology, and e ...
and others showed a "clear trend of acceleration, not deceleration" when it came to innovations. The foundation replied to Huebner the journal his article was published in, citing Second Life
''Second Life'' is an online multimedia platform that allows people to create an avatar for themselves and then interact with other users and user created content within a multi player online virtual world. Developed and owned by the San Fra ...
and eHarmony
Eharmony (styled eHarmony) is an online dating website launched in 2000. eHarmony is based in Los Angeles, California, and owned by Nucom ecommerce, a joint venture of German mass media company ProSiebenSat.1 Media and American private equity ...
as proof of accelerating innovation; to which Huebner replied.
However, Huebner's findings were confirmed in 2010 with U.S. Patent Office
The United States Patent and Trademark Office (USPTO) is an agency in the U.S. Department of Commerce that serves as the national patent office and trademark registration authority for the United States. The USPTO's headquarters are in Alexa ...
data. and in a 2012 paper.
Innovation and development
The theme of innovation as a tool to disrupting patterns of poverty has gained momentum since the mid-2000s among major international development
International development or global development is a broad concept denoting the idea that societies and countries have differing levels of economic or human development on an international scale. It is the basis for international classifications ...
actors such as DFID
, type = Department
, logo = DfID.svg
, logo_width = 180px
, logo_caption =
, picture = File:Admiralty Screen (411824276).jpg
, picture_width = 180px
, picture_caption = Department for International Development (London office) (far right ...
, Gates Foundation
The Bill & Melinda Gates Foundation (BMGF), a merging of the William H. Gates Foundation and the Gates Learning Foundation, is an American private foundation founded by Bill Gates and Melinda French Gates. Based in Seattle, Washington, it was l ...
's use of the Grand Challenge Grand Challenges are difficult but important problems set by various institutions or professions to encourage solutions or advocate for the application of government or philanthropic funds especially in the most highly developed economies Gould, M. ...
funding model, and USAID
The United States Agency for International Development (USAID) is an independent agency of the U.S. federal government that is primarily responsible for administering civilian foreign aid and development assistance. With a budget of over $27 bi ...
's Global Development Lab. Networks have been established to support innovation in development, such as D-Lab at MIT
The Massachusetts Institute of Technology (MIT) is a private land-grant research university in Cambridge, Massachusetts. Established in 1861, MIT has played a key role in the development of modern technology and science, and is one of the m ...
. Investment funds have been established to identify and catalyze innovations in developing countries
A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...
, such as DFID's Global Innovation Fund, Human Development Innovation Fund
The Human Development Innovation Fund (also known as HDIF or HDIFtz or the Human Development Impact Fund) is a UKAid financed 40 million British Pound challenge fund providing grants to businesses, NGOs and research institutions for scaling innov ...
, and (in partnership with USAID) the Global Development Innovation Ventures.
The United States has to continue to play on the same level of playing field as its competitors in federal research. This can be achieved being strategically innovative through investment in basic research and science".
Government policies
Given its effects on efficiency
Efficiency is the often measurable ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without ...
, quality of life
Quality of life (QOL) is defined by the World Health Organization as "an individual's perception of their position in life in the context of the culture and value systems in which they live and in relation to their goals, expectations, standards ...
, and productive growth, innovation is a key driver in improving society and economy. Consequently, policymakers have worked to develop environments that will foster innovation, from funding research and development
Research and development (R&D or R+D), known in Europe as research and technological development (RTD), is the set of innovative activities undertaken by corporations or governments in developing new services or products, and improving existi ...
to establishing regulations that do not inhibit innovation, funding the development of innovation clusters, and using public purchasing and standardisation to 'pull' innovation through.
For instance, experts are advocating that the U.S. federal government launch a National Infrastructure Foundation, a nimble, collaborative strategic intervention organization that will house innovations programs from fragmented silos under one entity, inform federal officials on innovation performance metrics
A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity (such as projects, programs, products and other initiatives) in which it en ...
, strengthen industry-university partnerships, and support innovation economic development
In the economics study of the public sector, economic and social development is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and o ...
initiatives, especially to strengthen regional clusters. Because clusters are the geographic incubators of innovative products and processes, a cluster development grant program would also be targeted for implementation. By focusing on innovating in such areas as precision manufacturing
Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a r ...
, information technology
Information technology (IT) is the use of computers to create, process, store, retrieve, and exchange all kinds of data . and information. IT forms part of information and communications technology (ICT). An information technology system (I ...
, and clean energy
Clean may refer to:
* Cleaning, the process of removing unwanted substances, such as dirt, infectious agents, and other impurities, from an object or environment
* Cleanliness, the state of being clean and free from dirt
Arts and media Music Al ...
, other areas of national concern would be tackled including government debt
A country's gross government debt (also called public debt, or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit oc ...
, carbon footprint
A carbon footprint is the total greenhouse gas (GHG) emissions caused by an individual, event, organization, service, place or product, expressed as carbon dioxide equivalent (CO2e). Greenhouse gases, including the carbon-containing gases carbo ...
, and oil dependence. The U.S. Economic Development Administration
The U.S. Economic Development Administration (EDA) is an agency in the United States Department of Commerce that provides grants and technical assistance to economically distressed communities in order to generate new employment, help retain exist ...
understand this reality in their continued Regional Innovation Clusters initiative. The United States also has to integrate her supply-chain and improve her applies research capability and downstream process innovation.
Many countries recognize the importance of innovation including Japan's Ministry of Education, Culture, Sports, Science and Technology
The , also known as MEXT or Monka-shō, is one of the eleven Ministries of Japan that composes part of the executive branch of the Government of Japan. Its goal is to improve the development of Japan in relation with the international community ...
(MEXT); Germany's Federal Ministry of Education and Research
The Federal Ministry of Education and Research (german: link=no, Bundesministerium für Bildung und Forschung, ), abbreviated BMBF, is a cabinet-level ministry of Germany. It is headquartered in Bonn, with an office in Berlin. The Ministry provi ...
; and the Ministry of Science and Technology A Science Ministry or Department of Science is a ministry or other government agency charged with science. The ministry is often headed by a Minister for Science.
List of Ministries of Science
Many countries have a Ministry of Science or Ministry ...
in the People's Republic of China. Russia's innovation programme is the Medvedev modernisation programme
The Medvedev modernisation programme was an initiative launched by President of Russia Dmitry Medvedev in 2009, which aimed at modernising Russia's economy and society, decreasing the country's dependency on oil and gas revenues and creating a ...
which aims to create a diversified economy based on high technology and innovation. The Government of Western Australia
The Government of Western Australia, formally referred to as His Majesty's Government of Western Australia, is the Australian state democratic administrative authority of Western Australia. It is also commonly referred to as the WA Government o ...
has established a number of innovation incentives for government departments. Landgate
The Western Australian Land Information Authority operates under the business name of Landgate.
Formerly known as the Department of Land Information (DLI), the Department of Land Administration (DOLA) and the Department of Lands and Surveys ( ...
was the first Western Australian government agency to establish its Innovation Program.
Some regions
In geography, regions, otherwise referred to as zones, lands or territories, are areas that are broadly divided by physical characteristics (physical geography), human impact characteristics (human geography), and the interaction of humanity and t ...
have taken a proactive role in supporting innovation. Many regional governments are setting up innovation agencies to strengthen regional capabilities. In 2009, the municipality of Medellin, Colombia
Colombia (, ; ), officially the Republic of Colombia, is a country in South America with insular regions in North America—near Nicaragua's Caribbean coast—as well as in the Pacific Ocean. The Colombian mainland is bordered by the Car ...
created Ruta N Corporation Ruta N (better known as Ruta N) is a public joint venture between the mayor's office of Medellín, UNE y EPM. Founded in 2009, Ruta-N was created in order to inspire and encourage innovation in the city and create favorable condition ...
to transform the city into a knowledge city.
See also
* Communities of innovation Communities that support innovation have been referred to as communities of innovation (CoI),Grimaldi, M., and F. Rogo. 2009. Mindsh@re in Fimmecanica: An organizational model based on communities of innovation. Proceedings of the European Conferen ...
* Creative problem solving
Creative problem-solving (CPS) is the mental process of searching for an original and previously unknown solution to a problem. To qualify, the solution must be novel and reached independently. The creative problem-solving process was originally de ...
* Diffusion (anthropology)
In cultural anthropology and cultural geography, cultural diffusion, as conceptualized by Leo Frobenius in his 1897/98 publication ''Der westafrikanische Kulturkreis'', is the spread of cultural items—such as ideas, styles, religions, technolo ...
* Ecoinnovation Eco-innovation is the development of products and processes that contribute to sustainable development, applying the commercial application of knowledge to elicit direct or indirect ecological improvements. This includes a range of related ideas, f ...
* Hype cycle
The Gartner hype cycle is a graphical presentation developed, used and branded by the American research, advisory and information technology firm Gartner to represent the maturity, adoption, and social application of specific technologies. The hy ...
* Induced innovation Induced innovation is a microeconomic hypothesis first proposed in 1932 by John Hicks in his work ''The Theory of Wages''. He proposed that "a change in the relative prices of the factors of production is itself a spur to invention, and to inventi ...
* Information revolution
The term information revolution describes current economic, social and technological trends beyond the Industrial Revolution.
Many competing terms have been proposed that focus on different aspects of this societal development.
The British polymat ...
* Innovation leadership Innovation leadership is a philosophy and technique that combines different leadership styles to influence employees to produce creative ideas, products, and services. The key role in the practice of innovation leadership is the innovation leader. D ...
* Innovation system The concept of the innovation system stresses that the flow of technology and information among people, enterprises, and institutions is key to an innovative process. It contains the interactions between the actors needed in order to turn an idea in ...
* International Association of Innovation Professionals
* ISO 56000
The ISO 56000 is a family of standards designed to provide a framework for organizations to implement, maintain and improve innovation management systems.Ullberg, Eskil, Leif Edvinsson, and Carol Yeh-Yun Lin. "Discussions of Further Dimensions." In ...
* Knowledge economy
The knowledge economy (or the knowledge-based economy) is an economic system in which the production of goods and services is based principally on knowledge-intensive activities that contribute to advancement in technical and scientific inno ...
* Obsolescence
Obsolescence is the state of being which occurs when an object, service, or practice is no longer maintained or required even though it may still be in good working order. It usually happens when something that is more efficient or less risky r ...
* Open Innovation
Open innovation is a term used to promote an information age mindset toward innovation that runs counter to the secrecy and silo mentality of traditional corporate research labs. The benefits and driving forces behind increased openness have bee ...
* Open Innovations (Forum and Technology Show)
Open Innovations (Forum and Technology Show) is an annual international forum that focuses on new technologies and perspectives of the international cooperation on innovations.
The focus of Forum is to provide a platform for discussions, inter ...
* Outcome-Driven Innovation Outcome-Driven Innovation (ODI) is a strategy and innovation process developed by Anthony W. Ulwick. It is built around the theory that people buy products and services to get jobs done.Anthony Ulwick, ''What Customers Want: Using Outcome-Driven In ...
* Participatory design
Participatory design (originally co-operative design, now often co-design) is an approach to design attempting to actively involve all stakeholders (e.g. employees, partners, customers, citizens, end users) in the design process to help ensure t ...
* Product innovation
Product innovation is the creation and subsequent introduction of a good or service that is either new, or an improved version of previous goods or services. This is broader than the normally accepted definition of innovation that includes the i ...
* Pro-innovation bias In diffusion of innovation theory, a pro-innovation bias is the belief that an innovation should be adopted by whole society without the need of its alteration. The innovation's "champion" has such strong bias in favor of the innovation, that they m ...
* Sustainable Development Goals
The Sustainable Development Goals (SDGs) or Global Goals are a collection of 17 interlinked objectives designed to serve as a "shared blueprint for peace and prosperity for people and the planet, now and into the future".United Nations (2017) R ...
(Agenda 9)
* Technology Life Cycle
The technology life-cycle (TLC) describes the commercial gain of a product through the expense of research and development phase, and the financial return during its "vital life". Some technologies, such as steel, paper or cement manufacturing, ...
* Technological innovation system The technological innovation system is a concept developed within the scientific field of innovation studies which serves to explain the nature and rate of technological change. A Technological Innovation System can be defined as ‘a dynamic networ ...
* Theories of technology
Theories of technological change and innovation attempt to explain the factors that shape technological innovation as well as the impact of technology on society and culture. Some of the most contemporary theories of technological change reject ...
* Timeline of historic inventions
The timeline of historic inventions is a chronological list of particularly important or significant technological inventions and their inventors, where known.
Paleolithic
The dates listed in this section refer to the earliest evidence of an i ...
* Toolkits for User Innovation
* UNDP Innovation Facility
* User Innovation
__NOTOC__
User innovation refers to innovation by intermediate users (e.g. user firms) or consumer users (individual end-users or user communities), rather than by suppliers (producers or manufacturers). This is a concept closely aligned to co-des ...
* Virtual product development
References
Further reading
* Bloom, Nicholas, Charles I. Jones, John Van Reenen, and Michael Webb. 2020.
Are Ideas Getting Harder to Find?
, ''American Economic Review
The ''American Economic Review'' is a monthly peer-reviewed academic journal published by the American Economic Association. First published in 1911, it is considered one of the most prestigious and highly distinguished journals in the field of ec ...
'', 110 (4): 1104–44.
*
*
{{Authority control
Design
Innovation economics
Product management
Science and technology studies