How to Distinguish Innovation From Idea

Would you like to know how to turn your ideas into groundbreaking innovations? We'll show you what types of innovations there are and what you need to bear in mind.

How is innovation defined?

The term innovation is on everyone's lips these days and has almost become a buzzword. It is derived from the Latin verb "innovare" and literally means innovation or renewal. In the economic context, innovation is understood as the successful realisation and implementation of innovations, inventions and ideas. The development of new ideas alone is not called innovation. In addition to novelty, success on the market plays a central role. For example, a new product alone is not enough. There must also be a market and customers who are willing to pay money for the benefit that the innovation offers. 

What does the degree of innovation mean?

The degree of innovation can be used to define how "new" an innovation is. It makes it possible to classify innovations in terms of their technical progress and novelty on the market. The degree of innovation is one of the most important parameters in innovation management. It makes it possible to present innovations in a differentiated way and to compare them with other innovations. There are numerous different approaches for differentiating between innovations with a low and high degree of innovation. One of the most common models is to distinguish between incremental and radical or disruptive innovations. 

Incremental innovations have a low degree of novelty and thus a low degree of innovation. They are changes to existing products, services and processes that remain essentially the same. The further development, development of new features or expansion of existing product lines offer the customer an improved benefit. They imply neither new knowledge nor new technology. We speak of improvement, adaptation and follow-on innovations.

Radical or disruptive innovations, on the other hand, represent something completely new and thus have a high degree of novelty and a high degree of innovation. The innovation brings about fundamental changes in the company, creates new benefits for the customer and transforms existing or creates new markets. It is based on new knowledge and requires a break with familiar routines. One also speaks of so-called basic innovations. 

What types of innovations are there?

Innovations can arise in the most diverse areas and can be clustered into numerous categories. Often they cannot simply be assigned to a single category, but fall into several categories at once. The three most common types of innovation are briefly explained below:

• Product innovation: The development of a new product as well as the relevant further development of an existing product is defined as product innovation. The condition is that the new product or the further development changes the behaviour of the market or other companies or our lives. 
  
  
• Service innovation: The development of a new service or a new service offer as well as its relevant further development is called service innovation. Here, too, the condition applies that the new service/the new service offer or its further development changes the behaviour of the market or other companies or our lives.
  
  
• Process innovation: The new development and change of processes and procedures within a company is understood as process innovation. The aim is to optimise existing processes and procedures, for example by using new raw materials to make a product more cost-effective or of higher quality. The aim is usually to reduce internal costs. 

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Author: Julia Mai