Innovation and Invention – Similar Words, Different Concepts

They have evolved – look at them differently

Innovation vs. Invention

Consonant with the etymological origin of the word, “innovation” implies the creation of something new. In this regard, innovation is often equated with invention. However, the two definitions – innovation and invention – have been evolving.

It has been recently appreciated that these two should in fact be regarded differently. As Jan Fagerberg wrote in his 2004 article:

An important distinction is normally made between invention and innovation. Invention is the first occurrence of an idea for a new product or process while innovation is the first attempt to carry it out into practice.

What is captured in this definition is the concept of innovation being the actualization or realization of an invention whether it be a societal benefit, commercialization, market entry or monetization.

One critique and failing of the dot-com boom was that while some of the software developed may have been quite inventive, this was not balanced by sustainable business models by which such inventions could be made commercially viable.

Clinical medicine is replete with inventions that failed market entry for any number of reasons including a lack of physician adoption, complexity, safety concerns and non-interoperability. Just like art for art’s sake, invention for invention’s sake may be intellectually and aesthetically pleasing but making a substantial societal impact is entirely another thing.

That is the job of innovation. There is another crucial distinction between invention and innovation that is not often appreciated.

Unlike invention, which often concerns a single product or process, innovation often involves a combination of products and processes that allow the successful translation of “new ideas into tangible societal impact,” as USC Stevens Institute for Innovation executive director Krisztina Holly once put it.

One example is the iPod, which as a standalone product is really not very inventive. MP3 players had been around for several years before the iPod. While there may be unique hardware and software aspects to the device, the fundamental invention of having a handheld MP3 player was not at all new.

What made the iPod truly innovative was its combination of aesthetic design, elegant ergonomics and ease of use. Also, there was the creation of the iTunes software and Web site that enabled listeners to actually use their fancy iPod. It is the combination of all these elements that made the iPod truly innovative.

Examples of Innovation

One of the greatest examples of innovation and a case study for how to foster innovation and accelerate development was the IBM PC. As an innovation that changed the nature of the computer industry and society, most will not doubt the innovation and significance of the IBM PC. The history of this is nicely summarized by Tom Hormby.

However, it may not surprise you that the IBM PC at that time did not contain any new inventions. What may surprise you is that the IBM team – under pressure to complete the project in less than 18 months – was under explicit instructions not to invent anything new.

The goal of this code-named “Project Chess” was to take off-the-shelf components and bring them together in a way that was user friendly (at least by the standards of those days), inexpensive and powerful enough for “home use”.

To some extent, the process by which IBM (which is ordinarily quite bureaucratic) created the IBM PC was an innovation in its own right.

IBM innovated around its own processes by creating a small team composed of people from multiple disciplines. IBM cut out much of the bureaucracy and blinkered focus that would have been otherwise applicable by licensing technologies from outside companies (i.e. Microsoft and Intel) and a completely new marketing model of advertising

About Ogan Gurel, MD MPhil (2 Articles)

Dr. Ogan Gurel is chairman of the Aesis Group, which provides consulting services to companies and investment firms in the life sciences and health care sectors.