Understanding Innovation

In order to more systematically understand innovation, scholars of innovation studies researched its varieties and types. The most difficult question in this regard is: What can be considered as an innovation and what is the object of innovation?

Innovation studies deal with these questions intensely: On a very general level, we can distinguish between process and product innovation (Braun-Thürmann, 2005). Process innovation can be conceived of as the introduction of a set of measures that allow for an industry or service process in a company or agency to be more efficiently or effectively organized and implmented.

Product innovation on the other hand means the actual introduction and placement of a novel product in the market, such as new kind of washing powder or a vegan substitute for barbecue. Both of them are considered a novelty and may lead to a change of social and business practice.

Yet, these are only the final destinations of what can be regarded as a longer process of innovation. Interest in opening the “black box” of innovation fueled the conceptualization of several models of the innovation process (Dosi, 1988; Kline & Rosenberg, 1986; Pavitt, 1984). Where does this process start? Which activities lead to innovation? What are its central drivers, the market or the state?

While current models of the innovation process are more dynamic, the so called linear model of innovation appeared to be particularly successful. A specific characteristic of this model is that scientific knowledge production is perceived to be closely intertwined with innovation, while the process can be difficult to direct. Three different stages of the innovation process were distinguished:

• Basic research: The quantitative and qualitative exploration of a phenomenon conducted without the goal of a direct application. Basic research is typically performed by public research organizations (PROs), but large enterprises can also afford to engage in basic research.
• Applied research occurs when a context of application is already defined and organizational entities using the research outcomes can be identified.
• Product development is the stage of research and innovation activities leading to the introduction of a product or service innovation in the market.

These different types of research and innovation activity can also be perceived as different stages within the innovation process. Behind the distinction was a linear understanding of the innovation process that has been critized by various scholars, arguing that there is multiple feedback between different innovation types and that applied research may also lead to questions for fundamental basic research (Kline & Rosenberg, 1986).

Moreover, it has been argued that most innovation activities emerge as a response to problems at the organizational level. Nevertheless, the linear model proved to be very successful and the aforementioned different types of activities in R & D have been taken up by various OECD classifications, which technically defined the aforementioned stages by relating them to very concrete activities such as data gathering (OECD, 1980, 2005). As a transnational organization, the OECD aimed at enabling transnational comparisons, especially among the different OECD countries.