Defining Innovation


Researchers at Bangor University (UK) and Manchester Metropolitan University (UK) collected more than 60 definitions of innovation found in the literature from 1953 to 2008. They examined these definitions according to six attributes: nature of innovation, type of innovation, stages of innovation, social context, means of innovation, and aim of innovation.

Following their research, they came up with the following definition:

Innovation is the multi-stage process whereby organizations transform ideas into new/improved products, services, or processes, in order to advance, compete and differentiate themselves successfully in their marketplace.

Source: Baregheh, Anahita, Jennifer Rowley, and Sally Sambrook. “Towards a multidisciplinary definition of innovation.” Management decision (2009)

This definition reflects the attributes of innovation mentioned earlier and provides a good starting point for organizations that want to foster a culture of innovation. To put things in perspective, let’s hear what a few leading experts think about innovation.

Innovation, Defined by Clayton Christensen

One of the greatest innovation experts, Clayton Christensen, and his colleagues define innovation as “a change in the processes by which an organization transforms labor, capital, materials, and information into products and services of greater value.”

Let’s examine this a step further. These processes (by which an organization transforms labor, capital, materials, and information) can be understood as technologies. This definition of technology extends well beyond IT, engineering, and manufacturing. It refers to a broad range of organizational processes, including product development, marketing, resource allocation, R&D, HR, operations management, and many others. Different organizations use different processes to get things done; therefore, all have certain technologies that they use to operate. According to Christensen, innovation refers to a change in one of these technologies.

Note that innovation is not the same thing as invention. Inventing is the act of creating something new that does not already exist. Innovation can, however, be borrowed from one country to another or from one firm to another. Many innovators borrow concepts from different fields and improve or modify them to fit their own purposes.

Change is a cornerstone of organizational success. To be successful, organizations must always be on the lookout for new ways to improve their processes. Those who fail to do so will eventually fall behind.

A Definition by Joseph Schumpeter

As a matter of fact, Christensen’s definition of innovation is consistent with the theory of Austrian-born economics professor Joseph Schumpeter. According to him, innovation is synonymous with change.

According to his theory, the key to innovation is producing a variety of combinations that didn’t exist before. He writes: “To produce means to combine materials and forces within our reach. To produce other things, or the same things by a different method, means to combine these materials and forces differently.”

**However, there is a caveat here. Innovation does not necessarily mean improvement, and it doesn’t need to be a novelty. In the sense, innovation is simply a departure from current practice. Schumpeter writes: “In so far as the “new combination” may in time grow out of the old by continuous adjustment in small steps, there is certainly change, possibly growth, but neither a new phenomenon nor development in our sense.”

Peter Drucker’s Perspective

Entrepreneurship and innovation go hand in hand, according to the great management guru Peter Drucker. Entrepreneurs are often lauded for their innovation and creativity. They are not afraid of taking risks if it leads to the creation of greater value for consumers or a new level of satisfaction. On the other hand, innovation is a tool by which entrepreneurs can harness change and use it to their benefit. In a rapidly changing world, innovation can give entrepreneurs a competitive edge. It can also lead to new products and services that solve problems and meet needs in the marketplace. By definition, innovation is the act of introducing something new. This can be a new product, process, or service. It can also be a new way of doing things that delivers improved results. Ultimately, innovation is about creating value. It is about finding better ways to do things that result in more efficient processes, higher quality products, and greater customer satisfaction.

Drucker writes: “Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service.

The main attribute of innovation is that it creates resources. To quote Drucker again, “there is no such thing as a “resource” until man finds a use for something in nature and thus endows it with economic value. Until then, every plant is a weed and every mineral just another rock.”

Innovation is a process that can be learned by all. It is possible to identify entrepreneurial behaviors and actions, and to understand the sources of innovation. Drucker writes: “It is capable of being presented as a discipline, capable of being learned, capable of being practiced.”

Read Drucker’s insightful book, Innovation, and Entrepreneurship, for more on the “Seven Sources for Innovative Opportunity.” It’s definitely worth the time and effort.

Eugene Fitzgerald’s Thoughts

In their book, Inside Real Innovation, Eugene Fitzgerald and his colleagues argue that innovation is a much broader concept than invention or ground-breaking research. R&D and invention are merely parts of a larger system.

They write: “We are using “innovation” to mean the entire process of moving new and valuable ideas into the marketplace, where benefits accrue to the users and where return is extracted for investment in the process. In short, we define innovation as useful embodiments of ideas in the marketplace.”

Innovation can be understood as a system that includes discovery, invention, development, the finished product, a market or receptive audience, and the act of capturing profit. Innovation is messy and iterative, non-linear process. In many cases, the “storyline” becomes apparent only after the fact has occurred.

For successful innovation, we need to focus on three different factors.

1. Technology

In order to create products and services, we have to follow through on our plans. An idea is worthless unless it can be turned into reality.

2. Market

We need a set of new or existing customers who have a need or desire for our product. This may seem like a no-brainer, but it’s important to understand that not just any customer will do. Businesses need a set of customers who have a need or desire for their product.

3. Implementation

Implementation is critical to the success of any innovation. Without the right processes and knowledge in place, even the best-laid plans will fail. We need the right processes and knowledge to execute our plans and make innovation happen.

Source: Wankerl, Andreas, et al. Inside Real Innovation: How the Right Approach Can Move Ideas from R&D to Market– and Get the Economy Moving. Singapore, World Scientific, 2011.

Innovation is a complex and multi-faceted concept. To be successful, we need to focus on the technology, the market, and the implementation simultaneously. Without all three of these factors in place, innovation will fail.

Tim Brown — A Design Thinking Approach

Design thinker Tim Brown also defines innovation as a system rather than just a single act or event of discovery. He writes, “(…) the continuum of innovation is best thought of as a system of overlapping spaces rather than a sequence of orderly steps.”

He refers to this process as a system of three overlapping spaces.

  1. Inspiration, “the problem or opportunity that motivates the search for solutions.”
  2. Ideation, “the process of generating, developing, and testing ideas.”
  3. Implementation, “the path that leads from the project room to the market.”


Again, it is a non-linear, highly iterative, evolving process. We might discover something fundamentally new or unexpected as we “travel” through these three spaces. We often need to revisit some of our most basic assumptions as new insights emerge.

We can also think about the three overlapping spaces of innovation in terms of boundaries or constraints. Resources constrain even the largest and most profitable companies. To avoid wasting precious resources, we must be clear about what we are trying to accomplish. (As Clayton Cristiensen put it, resource allocation and innovation are the two sides of the same coin.)

From a design thinking, perspective constraints can best be understood as three overlapping criteria for successful ideas.

Feasibility —> what is functionally possible within the foreseeable future

Viability —> what is likely to become part of a sustainable business model

Desirability —> what makes sense to people and for people


This is often referred to as the “Desirability-Viability-Feasibility Triad” of design thinking. It humanizes the process of innovation, making it more customer-centric. Design thinking acknowledges that successful innovation depends as much on the needs, wants, and desires of the end-users as it does on the technical feasibility of the project or the viability of the business model.

“Without constraints, design cannot happen, and the best design (…) is often carried out within quite severe constraints.”—Tim Brown

Key Ideas

  • Innovation is a system, not an event. It’s a messy, iterative, non-linear process.
  • Innovation equals change. Look for new ways of doing things, and opportunities to improve the status quo.
  • Implementation, market, and technology are all aspects of successful innovation. Make sure your revolutionary idea is technically feasible, financially viable, and deeply desirable for customers.
  • Entrepreneurship and innovation go hand in hand. Encourage risk-taking and experimentation, and embrace failure as part of the process. Don’t be afraid to challenge the status quo or push boundaries.

So what does all this mean for you and your organization? How can you foster a culture of innovation?


  • Baregheh, Anahita, Jennifer Rowley, and Sally Sambrook. “Towards a multidisciplinary definition of innovation.” Management decision (2009). Link here
  • Ojomo, Efosa, et al. The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty. United States, HarperCollins, 2019.
  • Christensen, Clayton M.. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. United States, Harvard Business Review Press, 2013.
  • McCraw, Thomas K.. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. United Kingdom, Harvard University Press, 2010.
  • Schumpeter, Joseph A.. The theory of economic development: an inquiry into profits, capital, credit, interest, and the business cycle. United Kingdom, Transaction Books, 1983., Originally published: 1911
  • Drucker, Peter. Innovation and Entrepreneurship. United Kingdom, Taylor & Francis, 2014., Originally published: 1985
  • Wankerl, Andreas, et al. Inside Real Innovation: How the Right Approach Can Move Ideas from R&D to Market — and Get the Economy Moving. Singapore, World Scientific Publishing Company, 2010.
  • Brown, Tim. Change by Design: How Design Thinking Transforms Organizations and Inspires Innovation. United States, HarperCollins, 2009.