What is Innovation?

Innovation. A word that moves the world. Literally. Because without innovations, there would be neither progress nor change. Big, drastic changes in the world would not have been possible without innovation. Industrialization needed the invention of the steam engine, digital transformation the internet. Humans always strive for further improvement and change. With this, humankind is the origin of innovation.

But what is innovation? What exactly does this word mean? One definition of innovation that we think is one of the best comes from Jürgen Hauschildt (2016):

“Innovations are qualitatively new products or processes, which differ “noticeably” – however that is to be determined – compared to a comparison state.”

For us at innosabi, innovation means change, reform, introducing something new, and often realizing a novel, advanced solution to a specific problem.

There seems to be a fair amount of meanings for this one word. Even science appears to be disunited on this: These are the two opposing sides: 

  • Innovation is a novelty or renewal of an object or a course of action
  • Innovation is change and application, which means innovation must be invented, introduced, used, and applied.

This is precisely where the crucial difference between innovation and invention lies. Especially in English-speaking countries, “innovation” and “invention” are often used interchangeably. However, looking more closely at the meanings, it becomes clear that an invention can only be the basis for innovation. Inventions begin with an idea and the development of a prototype. The prototype must become a product brought to the market and used for innovation to emerge.


Different Types of Innovation

Without innovation, no company can survive longer than a few years. Just because a corporation is big does not mean it is undisruptable.

In addition to the object of innovation, it is also useful to distinguish which scope an innovation. Product, service, and business model innovations can be divided by their market impact. These two attributes can be used to differentiate the following types of innovations:

  • Performance innovations are new ideas for an already well-known market. Often an improvement of the existing offer is made possible by new technologies.
  • Application innovations open up a new market for an already existing idea. New and additional customers can now use a current offer.
  • Incremental innovations are advancements/ the optimization of existing products, services, or business models. The adjustments often reduce costs, optimize customer benefit or reposition the market.
  • Radical innovation means that completely new ideas are translated into never seen products, services, or business models. Their impact on hole markets can be extreme. 
  • Sustaining innovations help companies defend their market position and remain competitive. Therefore, any innovation that enhances a supply is a sustaining innovation, whether radical or incremental.
  • Disruptive innovations are those that shape new markets or disrupt established ones. Frequently, disruptive innovations are possible through new technologies. The car, for example, was a disruptive innovation regarding transportation 100 years ago. Whether an innovation is disruptive often depends on the perspective. While the electric car is a radical but sustainable innovation for the automotive industry, it can be disruptive to the petrol industry because their product is no longer needed.
  • Agile innovation means implementing ideas through collaboration and iterative prototype circles/ loops. With the adaptability of agile innovation processes, innovations can be brought to market faster and implemented more seamlessly.

In addition, the trigger for innovation can be distinguished. So what triggered the innovation? Two main possibilities: Market-pull, where innovations are initiated by customer request, and technology-push, where new technologies enable new applications or products marketed accordingly.


How to Implement Innovation Processes?

Agile innovation management is key to innovation success. This is where the different types of innovation come together. There are differences in the people and resources with which ideas are collected and implemented. In Closed Innovation, organizations only involve internal resources in the innovation process. This can be done in classic idea management or via internal innovation projects and knowledge sharing using innosabi Idea. If a company also opens its innovation processes to external partners, this approach is called open innovation. With innosabi software, customers (innosabi Community) or suppliers and research institutes (innosabi Partner) can be involved in developing innovations that way. Interested?