Defining innovation – part 1: why the definitions of innovation that you know might be flawed

We need to think beyond commercialisation and wealth creation to embrace concepts such as utility and wellbeing. But do we require so much complexity to define innovation? Dave Richards Investigates

Many organisations are talking about innovation, without any real clarity or common definition, leading some people to conclude that innovation is just a buzzword that we should stop trying to have serious conversations about.

But that naïve conclusion misses a vital truth. Deeply understanding what innovation is all about enables global industry leaders to establish and maintain superior performance, competitive advantage, and winning strategies for long-term value creation.

Members of the MIT Innovation Lab (which I cofounded in 1993 and codirected until 1996) clearly demonstrate this understanding in everything they do.

3M is a great example – a company with a mission of innovation, an unparalleled infrastructure of technology platforms upon which to build new solutions, and a consistent track record of delivering superior customer value, which of course translates into value for other stakeholders. Some people might choose to ignore conversations about innovation – and do so at their peril. Phrases such as ‘innovate or die’ come to mind.

Do you know the ‘official’ definition of innovation, mainly used (not very well) by governments to measure and monitor national and regional levels of innovation?

The Organisation for Economic Cooperation and Development wined and dined hundreds of academics and civil servants in one of the world’s most expensive cities, Oslo, for weeks to come up with it. The resulting ‘Oslo Manual’ definition of innovation is ‘a firm connecting something new to a marketplace’. This definition is fatally flawed for three reasons:

1 Only ‘firms’ can innovate, such that innovation within public or ‘third’ (charitable) sectors is (by definition) impossible – which hopefully we all agree would be a bad thing.

2 Anything ‘new’ to a marketplace is viewed as innovative. But should we really accept that anything ‘new’ is ‘innovation’? What about a new strain of flu, accidentally unleashed by a company trying to create a vaccine? What about the Edsel – a very new car design introduced by Ford in 1958 – a spectacular market flop? And what about RentMyChest.com, or InmatesForYou.com? Come on now!

3 Again, because only ‘firms’ can be the authors of innovation, users are precluded from driving or contributing to innovation, even though a considerable body of research (see von Hippel, at MIT) shows that users are often the first to come up with ideas for innovation, and that they frequently modify the products provided by firms to make them more useful and fit for purpose (e.g., surgeons modifying surgical instruments).

Luckily for us, there are many far cleverer definitions of innovation offered by various experts, none of which resulted from expensive boondoggles at taxpayer expense:

  • ‘Innovation is the specific instrument of entrepreneurship. It is the act that endows resources with a new capacity to create wealth’ (Drucker, 1985).
  • ‘Innovation = Invention + Exploitation’ (Roberts, 1987).
  • ‘The starting point for innovation is the generation of creative ideas. Innovation is the process of taking those ideas to market or to usefulness’ (Ijuri and Kuhn, 1988).
  • ‘New ideas – plus action and implementation – which result in an improvement, a gain or a profit’ (3M’s definition, according to Kelley and Littman, 2006).
  • ‘People creating value through the implementation of ideas’ (attributed to the Innovation Network, by Kelley and Littman, 2006).
  • ‘New products, business processes, and organic changes that create wealth or social welfare’ (attributed to the OECD, by Vaitheeswaran, 2007).
  • ‘Fresh thinking that creates value’ (Lyons, of Goldman Sachs, attributed by Vaitheeswaran, 2007).
  • ‘Innovation is new stuff that is made useful’ (McKeown, 2008).
  • ‘Innovation is the conversion of knowledge and ideas into a benefit, which may be for commercial use or for the public good; the benefit may be new or improved products, processes or services’ (attributed to Smallwood by Waschke, 2011).
  • ‘Note the difference between invention and innovation: invention is the creation of a new idea or concept – innovation is taking that idea, reducing it to practice, and making it a commercial success’ (THECIS, 2014).
  • ‘Executing an idea which addresses a specific challenge and achieves value for both the company and customer’ (Skillicorn, 2016).
  • ‘Something new or different that delivers value to the world, with the key criteria that I’m not innovating if I’m not bettering people’s lives’ (Barba, 2019).

Is innovation the successful commercialisation of ideas?

That’s a measure of innovation success for commercial enterprises. But again, what about non-commercial enterprises, and what about users adapting products to better meet their needs, perhaps without commercial motivations?

Clearly, we need to think beyond commercialisation and wealth creation to embrace concepts such as utility and wellbeing. But do we require so much complexity to define innovation?

Isn’t there a single concept that embraces commercialisation, commercial success, wealth, utility, adoption and wellbeing?

Look out for part two of this series, next week, to find out.

Dave Richards is Co-Founder of the MIT Innovation Lab, and a highly acclaimed author, speaker and consultant on strategic innovation leadership. He is the author of The Seven Sins of Innovation: A Strategic Model for Entrepreneurship  and holds a PhD in mathematical psychology and neuroscience from the University of Toronto.

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