Related Concepts
Innovation is often used in conjunction with terms such as creativity, design, invention, and exploitation. It is also closely associated with terms such as growth and change. Let’s explore these relationships in more detail in order to get a deeper understanding of what we mean by innovation. Related concepts include invention, growth, creativity, design, exploita- tion, change, failure, entrepreneurship, customers, knowledge, and society.
INNOVATION AND INVENTION
Invention is a term often used in the context of innovation. Invention has its own separate entry in the dictionary and is defined as follows (The New Oxford Dictionary of English, 1998, p. 960):
Creating something new that has never existed before.
Invention need not fulfill any useful customer need and need not include the exploitation of the concept in the marketplace. Innovation dif- fers from invention in that it is more than the creation of something novel; it also includes the exploitation for benefit by adding value to customers. Invention is often measured as the ability to patent an idea. If this can be achieved, then it is an invention. The success or failure of an invention depends not only on the ideas chosen by the organization but also on how well their implementation is managed. Invention is often about creating something that has yet to be desired by a customer. Numerous inventions never lead to innovation because they are never brought to the market- place. If an invention can be exploited and transformed into change that adds value to a customer, then it becomes an innovation. On the other hand, there are many innovations that do not require invention in terms of originality. Process and service innovations often involve applying well- established techniques and technology. Although it can be argued that this does not encompass invention because it already exists, it is still a legitimate form of innovation because it is novel to the organization applying it.
INNOVATION AND GROWTH
Innovation is about developing growth. According to Drucker (1988), innovation can be viewed as a purposeful and focused effort to achieve change in (an organization’s) economic or social potential. Bottom-line growth can occur in a number of ways, such as better service quality and shorter lead times in nonprofit organizations and cost reduction, cost avoidance, and increased turnover in profit-focused organizations.
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Chapter 1