Conceptualizing innovation

Fortunately, however, a consistent theme may be identified: innovation is typically understood as the introduction of something new and useful, for example introducing new methods, techniques, or practices or new or altered products and services.

The term innovation may refer to both radical and incremental changes to products, processes or services. The often unspoken goal of innovation is to solve a problem. Innovation is an important topic in the study of economics, business, technology, sociology, and engineering. Since innovation is also considered a major driver of the economy, the factors that lead to innovation are also considered to be critical to policy makers.

Innovation has been studied in a variety of contexts, including in relation to technology, commerce, social systems, economic development, and policy construction. There are, therefore, naturally a wide range of approaches to conceptualising innovation in the scholarly literature.

Types of Innovation

Incremental innovation - most innovations are incremental innovations. A value-added business process, this involves making minor changes over time to sustain the growth of a company without making sweeping changes to product lines, services, or markets in which competition currently exists.

Breakthrough, disruptive or radicalinnovation - Launching an entirely novel product or service rather than providing improved products & services along the same lines as currently. The uncertainty of breakthrough innovations means that seldom do companies achieve their breakthrough goals this way, but those times that breakthrough innovation does work, the rewards can be tremendous.

Substantial Innovation - Introducing a different product or service within the same line, such as the movement of a candle company into marketing the electric light bulb.

Business Model innovation

Involves changing the way business is done in terms of capturing value.

Marketing innovationis the development of new marketing methods with improvement in product design or packaging, product promotion or pricing.

Organizational innovationinvolves the creation or alteration of business structures, practices, and models, and may therefore include process, marketing and business model innovation.

Process innovationinvolves the implementation of a new or significantly improved production or delivery method.

Product innovation, involves the introduction of a new good or service that is new or substantially improved. This might include improvements in functional characteristics, technical abilities, ease of use, or any other dimension.

Supply chain innovationwhere innovations occur in the sourcing of input products from suppliers and the delivery of output products to customers.

Source : Wikipedia.org