Invention vs. Innovation

Invention vs. Innovation

• Invention is the discovery of a new principle or the formulation of a novel idea.
• Two forms of invention:
  • Conceptual/discovery invention: Driven by curiosity about the world and how it works, without necessarily aiming for practical application. Examples include electricity and the moons of Jupiter.
  • Practical invention: Identifies and/or solves a problem or need. Examples include Harrison's chronometer and Archimedes' screw. Many practical inventions lack a known inventor or are credited to serendipity. This includes inventions like logarithms, the discovery of America, or penicillin.
• Discovery inventions often lead to principles explaining natural or social phenomena (e.g., the "invisible hand") or revealing previously unknown phenomena (new species, planets).
• Discovery inventions may not have immediate applications, and can even be "false" (suggesting a plausible but incorrect explanation).
• Newton's law of universal gravitation is an example of a discovery that is accurate at planetary scales but needs refinement for larger scales (like relativistic physics).
• Discoveries provide more precise statements and lead to more accurate observations about a greater number of objects.
• Applying discoveries to real-world applications, be it technical or social, is a complex process.
• Examples of discovered concepts with no initial applications: water vapor's mechanical force in ancient Egypt and India.

Innovation

• Innovation is the implementation of a new practice, potentially based on a pre-existing invention.
• Five forms of innovation (according to Schumpeter):
  • Product innovation: Introducing new goods and services, like vulcanized rubber by Charles Goodyear. Differentiate from "principle innovation": a new principle within a known framework (e.g., the diesel engine within internal combustion engines).
  • Resource innovation: Utilizing new resources or raw materials. Examples include petroleum at the end of the 19th century or antarctic mining.
  • Process innovation: Developing new production methods. Examples include Solvay's process to create soda from salt and lime.
  • Organizational innovation: Implementing new task management methods. Examples include Taylor's time and motion studies.
  • Market innovation: Targeting new markets. Examples include the 17th-century European market for Indian cotton textiles and the extension of the comic book market to adult audiences in 1970s Europe.
• OECD's Manual (2005) definition: Implementing a new or significantly improved product/process, a new method of marketing, or new organizational practice within a business, work organization, or external relations.
• Innovation's core aspect: Economic motivation (changing or creating market demand).

Types of Innovation

• Incremental innovation: Improving an existing product/market segment. (e.g., anti-lock brakes)
• Adjacent innovation: Expanding the applicability of a previous innovation. (e.g., aspirin for heart conditions)
• Disruptive innovation: Creating a new market segment and demand. (e.g., low-cost automobiles)
• Radical innovation: Creating a new market and demand that previously didn't exist. (e.g., the iPhone)