What is innovation?

Innovation is more than just creativity; it is the whole process from a new idea until this new idea has been put to use. Innovation means implementing something new – introducing new inputs in a process, new products or services, new production processes, approaching new markets, or new forms of organization that contribute to value creation, economic or otherwise, both in the public and private sector (see figure 11).

Schumpeter (1934, 1983) ties innovation both to increased value creation and to qualitative changes. The economic definition of value creation is earnings and personnel costs. Operating income are earnings before deducting taxes, interest and disposal of surplus. Innovation may be studied within a business, an industry or a network. The value creation in a business, or in a network during a period of time, shows how much money is passed on to stakeholders such as employees, investors, lenders and political authorities (cfr. Jakobsen et al., 2012). Carlson & Wilmot (2006) ties Innovation to five disciplines for creating what customers want: Important customer and market needs, Value creation, Innovation champions, Innovation teams, Organizational alignment. Each of these disciplines describes a set of concepts and best practices that increase the probability of innovative success.