Innovation

Innovation is the implementation of a new or significantly improved idea, good, service, process or practice which is intended to be useful. Scholars who have studied innovation generally differentiate among four main types of innovation: product innovation, process innovation, organizational innovation, and marketing innovation.

Types of innovation

In business and economics, innovation is often divided into four types:

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• Product innovation, which involves the introduction of a new good or service that is substantially improved. This might include improvements in functional characteristics, technical abilities, ease of use, or any other dimension
• Process innovation involves the implementation of a new or significantly improved production or delivery method.
• Marketing innovation is the development of new marketing methods with improvement in product design or packaging, product promotion or pricing.
• Organizational innovation involves the creation of new organizations, business practices, or ways of running organizations.

In addition to dividing innovations into types, innovation is often characterized by its impact on existing markets or businesses. Sustaining innovations allows organizations to continue to approach markets the same way, such as the development of a faster or more fuel efficient car. Disruptive innovations on the other hand, significantly change a market or product category, such as the invention of a cheap, safe personal flying machine that could replace cars.

Related Topics:
Sustaining innovation - Disruptive innovations

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Similarly, incremental innovation is evolutionary innovation, a step forward along a technology trajectory, with a high chance of success and low uncertainty about outcomes. Radical innovation, on the other hand, involves larger leaps in the advancement of a technology or process, and the chance of success in pursuing such innovation is usually much less.

Related Topics:
Incremental innovation - Technology trajectory - Radical innovation

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