Asian Development Foundation College
Tacloban City
College of Business and Accountancy
EC4 – Innovation Management
Lesson 1: Introduction to Innovation Management
Lesson Objectives:
At the end of the lesson, students are expected to:
1. Define Innovation;
2. Differentiate innovation from invention; and
3. Determine the goals of innovation.
Lesson Material
“Innovation" comes from the Latin word "innovare" and stands for renewal.
From an economic point of view, innovation is something new that brings
benefits for an organization or / and for society.
Innovation is both a necessary means and a desirable end for businesses in
a fast-moving global economy.
It is about managing a process that delivers either new products and services
to the customers, efficiently, effectively and faster than the competition, or about
enhancing the delivery of existing products and services by process
improvement.
It may be the search for and the discovery, developed, improvement, adoption
and commercialization of new processes, new products and new organization
structures and procedures.
Generally, innovation involves managing a complex mix of procedures in a
context that often conditions the way the end result will be achieved.
Definition of innovation
The New Oxford Dictionary of English, 1998, p. 942: “Making changes to
something established by introducing something new.”
Innovation is defined as, “the application of practical tools and techniques
that make changes, large and small, to products, processes, and services that
results in the introduction of something new for the organization that adds value
to customers and contributes to the knowledge store of the organization.”
Difference between innovation and invention
“Innovation,” occurs if someone improves on or makes a significant
contribution to an existing product, process or service. “Invention” on the other
hand can be defined as the creation of a product or introduction of a process for
the first time.
Innovation follows invention.
Innovation Invention
It is the introduction of new product,
It is the creation of new product, service or
service or process into the marketplace by
process for the first time
making improvement to existing one
It requires a broad set of marketing,
It requires scientific skills
technical and strategic skills
Innovation focuses on the combination of Invention is concerned with a single product
various products and services of service
Results into commercialization May not be commercialized
Usually induced It can be autonomous or induced
Economic motive Can be for economic or noneconomic motive
Spread across the organization Usually restricted to R&D centered.
Brings organizational change. May bring few changes in organization
Succeeds invention. Precedes innovation
Innovation = Invention + creativity + exploitation
The smartphone, the car, the desktop computer these are inventions.
Innovation is the continual upgrade of inventions. So, moving a desktop from an
Intel 286 to a 386, changing the size of a smartphone screen, making changes
in the old-aged format of car to its modern version, these are innovations.
Goals of innovation
• Improving quality
• Creation of new markets
• Extension of the product range
• Reducing labor cost
• Improving production process
• Reducing materials
• Reducing environmental damage
• Replacement of products/services
• Reducing energy consumption
• Conformance to regulations
