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Innovation Definition


What is innovation? Definition

Different authors, specialized in this subject, have defined the concept of innovation, Innovation.there are multiple definitions about a concept that seems to be simple but it is also ambiguous, the vast majority of definitions become from the definition given by the Austrian economist Schumpter. This definition involves the following 5 cases:

  1. Introduction to the market of a new product or service, which clients are not still familiarized with it.
  2. Introduction of a new methodology of production or an organized methodology.
  3. Creation of a new source of supply of row material or semi-elaborated products.
  4. Open a new market in a county.
  5. Put a new structure in a market.

There are two main points in which all the authors agree:

  1. If the new products, processes or services are not accepted in the market, there is no innovation.
  2. The innovation is the key element of the competitive

Innovate is to create or the modification of a product and introduce it in the market.

About the second point Michael porter assets that :

Michael Porter. Author of the competitive advantage of nations.
" Competitiveness of a nation depends on the capacity of its industry to innovate and improve. Companies get advantages if they can innovate"
Michael Porter. Author of the competitive advantage of nations.

There are two types of innovation, all of them are classified according to their application or their originality:

Types of innovation :

According to their application:

  • Innovation of the product: Commercialese of a product which is technically different, the innovation is made when the characteristics of the products change.
  • Innovation of the process: It occurs when there is a meaningful change in the technology of its production; it can also happen when there are important changes in the direction system and in its methods of organization.

According to their grade originality:

  • Radical innovation: new applications of a technology or combination of the original ones.
  • Increase innovation: improvements that are realized about a product, service or existent method.

Therefore any kind of innovation can be defined depending of the application as well its originality; we will see it better with the following example:

Let us imagine that the Machine of the time has been discovered which allows us to travel in the time, we could define the innovation like:

Depending on their application: Innovation of the product, because the innovation is defined by a possession.

Depending on the originality: Radical innovation, because before there was not any way to allow us travel over the time, is a product completely new.

Product and Radical Innovation.

Coming back to the real world: analysing the case of the outcome recordered CD's in the market, which kind of innovation supposed?

Depending on the application: Innovation of the product, because the innovation is defined by a possession.

Depending on the originality : Increase innovation, these CD's existed before but the innovation has offered to us a new services which is record the CD, and then erase it and record it again.

Product and Increase Innovation.

By this way we can define every innovation attending to the before steps :


Strategically the final objective of radical innovations is to obtain something completely new, while the increase innovations are orientated to reduce the costs.

Japanese people defend the continuously introduction of increase (known as Kaizen), however some of them think that nowadays the increase innovations are not enough.

Many actual companies uses the strategy of developing the radical innovations, for this they have specific machines and qualificate people, so, if they get a new product in the market they start with the increase innovation where they make massive productions. The main objective here is the reduction of costs.

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Next Chapter : I+D+i - Investigation + Development + innovation.



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