Innovation Types
...definition of the process. He argued that economic development is driven by innovation. He described innovation as a process of new technologies replacing old technologies, which he called “creative destruction”. He was also the founder of the terms: “radical” and “incremental” innovations, which entail major sudden changes and continuously changing processes, respectively. Schumpeter set out a list of types of innovations which form the basis of today’s definitions and strategic choices. For example, the four most important aspects of nowadays’ innovation, namely product, process, marketing and organizational innovation.
Innovation may occur due to several reasons, according to Tirole (1995), innovation is a way of staying ahead of competitors. Adapting or developing ones products may help a company to protect or conquer market share from competitors.
According to Rosenberg (1994), innovation goes together with uncertainty. Often, innovation is neglected or postponed due to the uncertainty of the outcomes. This may lead to the company not being able to obtain funding for their projects.
Lam (2005) believes that organisational innovation aids a firm in its efficiency of its innovations. Properly adapted firms, that is organisationally wise, will enjoy higher yields from newly implemented innovations.
Marketing theories as those from Hunt (1983) helped innovations in a way that it offered companies a way to matching their products to their customers. Hunt’s theory assumes namely, that buyers and sellers are heterogeneous (not a-like). It offers companies a possibility to easier match their products by the use of marketing tools like the “4 P’s” (product, price, promotion and placement).
Evolutionary approaches (Nelson and Winter, 1982) helped to develop the systems of innovation approach (Lundvall, 1992; Nelson 1993). These explain how external...
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