Innovation comes from the Latin innovationem, noun of action from innovare. The Etymology Dictionary further explains innovare as dating back to 1540 and stemming from the Latin innovatus, pp. of innovare "to renew or change," from in- "into" + novus "new".
Innovation can therefore be seen as the process that renews something that exists and not, as is commonly assumed, the introduction of something new. Furthermore this makes clear innovation is not an economic term by origin, but dates back to the Middle Ages at least. Possibly even earlier.
The central meaning of innovation thus relates to renewal. For this renewal to take place it is necessary for people to change the way they make decisions, they must choose to do things differently, make choices outside of their norm. Schumpeter c.s. (~1930) seems to have stated that innovation changes the values onto which the system is based. So when people change their value (system) the old (economic) system will tumble over to make room for the new one. When that happens innovation has occurred. So innovation must be seen as something that does not something that is
On a lower level, innovation can be seen as a change in the thought process for doing something, or the useful application of new inventions or discoveries. It may refer to incremental, emergent, or radical and revolutionary changes in thinking, products, processes, or organizations. Following Schumpeter (1934), contributors to the scholarly literature on innovation typically distinguish between invention, an idea made manifest, and innovation, ideas applied successfully in practice. In many fields, such as the arts, economics and government policy, something new must be substantially different to be innovative. In economics the change must increase value, customer value, or producer value. The goal of invention is positive change, to make someone or something better. Invention and introduction of it that leads to increased productivity is the fundamental source of increasing wealth in an economy.
Innovation is an important topic in the study of economics, business, entrepreneurship, design, technology, sociology, and engineering. Colloquially, the word "innovation" is often synonymous with the output of the process. However, economists tend to focus on the process itself, from the origination of an idea to its transformation into something useful, to its implementation; and on the system within which the process of innovation unfolds. Since innovation is also considered a major driver of the economy, especially when it leads to new product categories or increasing productivity, the factors that lead to innovation are also considered to be critical to policy makers. In particular, followers of innovation economics stress using public policy to spur innovation and growth.
Those who are directly responsible for application of inventions are often called pioneers in their field, whether they are individuals or organizations. When pioneers are followed by many other the dominant value system may be replaced by the new one. When this happens innovation has occurred a posteriori.
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