For many clients innovation can be a scary concept, often it is not clearly defined and may be thought to imply the development of ground breaking technological changes or invention. This can seem intimidating as inevitably it involves a degree of risk-taking.
It’s very important that Business Advisors understand what innovation is. The understanding of such conceptual framework is the basis to take the necessary steps towards the implementation of successful innovations within your client business or even your own.
A clear unified definition of innovation does not exist, but there are however several definitions either representing individual opinions or even international organizations. Such is the case of the official definition of innovation taken from the Green Paper of Innovation, developed by European Commission:
“Innovation has a variety of roles. As a driving force, it points firms towards ambitious long term objectives. It also leads to the renewal of industrial structures and is behind the emergence of new sectors of economic activity.
In brief, innovation is:
- the renewal and enlargement of the range of products and services and the associated markets;
- the establishment of new methods of production, supply and distribution;
- the introduction of changes in management, work organization, and the working conditions and skills of the workforce.”
There are other definitions that you should also consider and explore. For example, the definition taken from The New Oxford Dictionary of English is:
- “Making changes to something established by introducing something new”.
Or for example, take a look at the definition provided by APCER:
“Innovation is the implementation of a new or significantly improved product (good or service) or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations.”
Or take a look at the following video with individual opinions on what innovation is gathered at the Lisbon Council.
There are many definitions of what innovation is. It does not mean one definition is necessarily more correct than other, it means one might be more complete or based on a different perspective and/or personal experience. And this is a very important point to remember. Understanding the conceptual framework of what innovation is, is not only important for business strategic and operational thinking but it also has other implications as obtaining funding (i.e. European funding) that might be targeted at projects with an innovative character.
Innovation should not be mistaken with Research and Development, two different concepts for which a definition can be found on the Frascati Manual, a reference document to understand how to measure R&D activities. Even though Research and Development is not within the scope of this module, it is important to understand their meaning as Research, Development and Innovation are closely related. As such please consider the following definitions.
“The term R&D covers three activities: basic research, applied research and experimental development (…). Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomena and observable facts, without any particular application or use in view. Applied research is also original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific practical aim or objective. Experimental development is systematic work, drawing on existing knowledge gained from research and/or practical experience, which is directed to producing new materials, products or devices, to installing new processes, systems and services, or to improving substantially those already produced or installed”
– From the Frascati Manual – http://www.uis.unesco.org/Library/Documents/OECDFrascatiManual02_en.pdf
Therefore, innovation is the final stage of this RDI cycle, namely the implementation of a new or significantly improved solution that could be achieved through the results of Research and Development activities.
For a different perspective on what innovation is please check the following:
 The New Oxford Dictionary of English, 1998, p.942