What is innovation?

We explain what innovation is and what things are required for an innovation. In addition, its relationship with research and development.

  1. What is innovation?

Innovation is defined according to the Dictionary of the Royal Spanish Academy in two ways:

  • It is considered to innovate to alter anything by introducing novelties. The people are constantly innovating and trying out alternatives for work, study or in any walk of life .
  • However, the most important meaning is that it has in the economic field : action to modify a product for its introduction in the market. The fundamental thing about innovation is that it takes everything that already exists and rebuilds it, reorganizes it or moves it by adding something new.

The economic use of the term begins with the contribution of Schumpeter . An innovation –he said- “ corresponds to an introduction of a new product , of a new method of production (not consistent with a scientific discovery), of a new market, of a source of supply of raw materials or of a new organization of the production”.

He proposed a distinction between invention and innovation , differentiating inventions (which may not be commercialized and remain unknown) from innovations, which have already been socialized. The difference is brought by the market, since the invention will not necessarily have acceptance in the public.

  1. What does innovation depend on?

To innovate creativity and teamwork is essential.

The requirements for innovation are given by the creative capacity of the mind , by experience and by the complement and teamwork of the different areas: marketing , science , development , advertising .

However, there are other factors that may exceed the work team , whether internal factors of the company (dedication of resources, investments) or external factors (socio-economic status of countries, regional strategies).

There are other conceptions of innovation understood from the place of the company.

  • World Economic Forum It considers innovation among the strengths that make a company’s competitiveness , as it is the only means to improve people’s long-term living standards.
  • Boston Consulting Group. It extends the idea of ​​innovation to the business structure , to the value chain, to the services , to the customer experience , and considers that almost all the introductions made in any area of ​​the company are innovations. It is because of this ambiguity that they decided to classify the results among tangibles (such as products or formulas) against intangibles (such as the advantage of the elements mentioned).
  1. Investigation and development

Around the world a world has been developed that investigates and analyzes it. Surely the companies (and countries) that have the greatest capacity for innovation are those with the latest technology and products, so that it is effective to create an innovation indicator, to compare the dynamics of innovation according to where it comes from . On the other hand, a variety of software has been developed that encourages innovation, digitizing and simplifying part of the process .

The importance it has for countries is such that a political dimension has developed behind innovation . Countries that are capable of developing an industry with high capacity for innovation will have greater competitiveness, and will be able to greatly improve the standard of living of society . The European Union considers that, and that is why it tries to analyze and understand it to design better policies.

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