What is Innovation?

The term innovation refers to the change that introduce some or several novelties on an ambit, a context, or a product.

 

 

The process of innovation consists in the transformation of an idea into a product or a service. The innovation concludes when the products or services are market. It is also possible to improve the products or services that already exist, resulting in an incremental innovation. Regarding to the innovation in the production process, it is made when the added value in the production is reflexed on the market.

Some Standards

On the Innovation language, it is necessary to make some clarification on a general manner due to the use of some concepts that can create confusion in their meanings, making us to classify in discrete categories what in reality is continuous.

In the process of Innovation, which begins from the idea conception, until we market it, there is a series of necessary activities, which seen from the business world, are continuous stages.

The Royal Spanish Academia, defines Innovation as: action and effect of innovate, and/or creation or modification of a product, and its introduction in a market.

Oslo Manual remarks the work of Schumpeter regarding to the Innovation Theories (OCED, 2005), who claimed that economic development it is move by innovation.  This process of dynamic innovation where some technologies are substituted, he called it: creative destruction. Schumpeter classified the innovations as radicals when they create big changes and progressive, when they feed in a continuous way the process of a change.

The Oslo Manual also defines innovation as follows:

An innovation is the introduction of a new, or significantly improved, product (good or service), a process, or a new method of marketing, or a new organizational method, into the internal ways of the business, the organization of the work place, or the external relationships (OCDE, 2005, p. 56).

About the innovative activities, the Oslo Manual defines them as:

Innovative activities correspond with every scientific, technologic, organizational, financial, and commercial operations, which effectively lead, or has the objective of lead, to the introduction of innovations. Some of this activities are innovative by them self, others are not new but necessary for the introduction of innovations. Activities of innovation include also I+D ones, which are not directly linked to the introduction of a particular innovation (OCED, 2005, p. 57).

The Novelty Concept in the Innovation

By definition, every innovation has to have a new element. The concept of novelty is configured under three forms described next: new for the business, new for the market, and new for the entire world.

Scope of the Innovation

Oslo Manual distinguish four areas for innovation: production, process, organization, and marketing.

Types of Innovation

Innovation can be described from three different perspectives, the first is the grade or intensity of the innovation, the second from its nature or origin, and the third one from its application.

Innovation according to its Nature

This kind of innovation can be classified in three ways:

Technological innovation. Is where the technology serves the purpose of introducing changes, for example, with industrial applications using the scientific and technological knowledge.

Commercial Innovation. This kind of innovation is made by influencing directly in any of the marketing variables.

This new types of marketing can play a determinant role on the business results. Marketing methods are also important on the success of new products, meanwhile the market studies and contact with the clients can perform a crucial role in the products and process development through the induced innovation by the demand.

Organizational Innovation. This kind of innovation is oriented to the productive activity, either business, government sector or in the academic field, research centers or universities. It is characterized mainly by the possibility of having more access to the knowledge and also to a better exploitation of the resources as can be the financial and materials.

Exist countless classifications of innovation, regarding the perspective it is give. Therefore, we have other way to classify the types of innovation:

Technological innovation: It covers the changes in the products and process.

Social innovation: proposes solutions especially to social problems without interfere in the business activities and effectiveness.

Management innovation: practically gather the innovations that cannot be include in the prior categories, as long as are respected the guides of the Oslo Manual.

References.

OCDE. (2005) Oslo Manual. Spain: Grupo Trasga.

Excerption from the book Management of the Innovation, the first piece of the puzzle. Héctor Alvarado Gamas.