We tend to confuse innovation with invention.  Creativity is essential to both activities.

Invention is the creation of a novel device, process, or technique that significantly changes the application of technology. 

Innovation, on the other hand, is the practical application of an invention into a marketable product or service. In other words, invention is the formulation of new ideas, while innovation is the practical application of those ideas. 

Innovation, therefore, is largely about bringing some idea or invention (technology, process, configuration, etc.) to the market. It is fundamentally about entrepreneurship.  Having good ideas is great creativity, but it is not innovation on its own.

Entrepreneurship is a human characteristic that combines structure and passion, planning and vision, and the judgment to take risks to bring good ideas into reality.  The skill to spot opportunities and create new ways to exploit them is at the heart of the innovation process.  However, ultimately, various disciplines and skills are required to successfully bring the product, or service, to the market.  This is a management and organisational endeavour.

Entrepreneurship drives innovation to create value across the life cycle of organizations, whilst the organisation itself needs to be adept at turning the idea into a successful product or service on the market.   

A board of directors’ risk appetite and support of organisational structuring for innovation is therefore key. 

Consider the following ‘new product’ research1:

·       27.3% of sales are from new products introduced the previous 3 years.

·       67% of managers expect this dependence on new products to increase.

·       25.2% of profit contributions are from new products introduced the previous 3 years.  This increases in some sectors, such as for IT, consumer durables, etc.

·       80% of the products we will be buying over the next 10 years have not been invented or conceived yet.

1Cooper, Robert & Edgett, Scott. (2012). Best Practices in the Idea-to-Launch Process and Its Governance. Research-Technology Management. 55. 10.5437/08956308X5502022.