2.1 Innovation Concepts
Innovation, as a term, is rather ambivalent and this, as we will see later, is one of the
root causes of different understandings of Social Innovation. Based on the work of
Schumpeter, Innovation can focus on the types of Innovation (Product, Process,
Market), the dimensions (objective or subjective), the scope of change (radical,
incremental, reapplied), or how it was created (closed or open Innovation)
(Stummer, Guenther and Ko¨ck 2010). All of these differentiations are highly
relevant to concepts of Social Innovation as well.
Types of Innovation – Product and Service Innovations are certainly a major
area to focus on for companies, as these Innovations typically are very visible and
shape the reputation of the firm. However, process Innovation (i.e. a new form of
production that saves emissions and resources) or market Innovation (i.e. creating
new markets for social solutions) is often as important as product Innovations.
Scope of Change – In common understanding, Innovation always needs to be
something big and ground-breaking. However, most Innovations are not that. The
radical or disruptive Innovation fundamentally changes the markets and daily lives
of people. Often, they are closely related to the inventor and bear high opportunities
but also high risks. Incremental Innovations rather build on constant improvement
of disruptive Innovations; they are more related to the organisation and less to the
inventor. In general, they offer a high potential for economic success. A third area
to look at is reapplied Innovation. Those are often existing concepts that are
successfully implemented in a new area (Baldwin and Curley 2007).
Sources of Innovation – Closed Innovation processes strongly focus on the
Intellectual capacity and property of the organization; inventions and Innovations
are developed in-house and then results are shared with external stakeholders. Open
Innovation, on the contrary, is “. . .the use of purposive inflows and outflows of
knowledge to accelerate Innovation. With knowledge now widely distributed,
companies cannot rely entirely on their own research, but should acquire inventions
or intellectual property from other companies when it advances the business
model . . .” (Chesbrough 2003).
The above dimensions of Innovation can be grouped into an InnovationCube
which is helpful to look at when later discussing possibilities of Social Innovations
(Fig. 1).