How to Define Innovation

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by: Matt Rhodes

The UK Department of Innovation and Skills (DIUS) has recently released a White Paper on how it could and should invest in innovation (see here). This got me thinking about innovation and what it means.

The official government definition of innovation is “the successful exploitation of new ideas”. As with many definitions, this just throws up as many queries as it helps to solve. In particular the meaning of the word ‘new’ and why ’successful’ has to be in there. The former can be got round by saying it just has to be new in some way to the industry or organisation, or indeed that is could be a new application of an something older. It’s a bit of a fudge but let’s run with that. However, ’successful’ is less easily explained – whilst I can understand that the best innovations are successful, not all of them are. Success is often a subjective measure and may not be obvious for many years after the innovation has occurred. I’d rather leave this out.

A few years ago I ran a large survey across more than 700 London SMEs to try to get an understanding of what innovation was. The results were interesting, if not a little concerning. We approached a definition from three angles:

  1. In isolation how would a business owner define innovation
  2. What examples could they give of other innovations they have seen and been impressed by
  3. Could they give an example of an innovation in their own business in the previous twelve months

The first question brought back the usual definitions. Words like ‘new’ and ‘different’ were matched with ‘idea’ and ‘technology’ in most definitions. The examples from other businesses, however, was more revealing. Every respondent gave an example that was both tangible (a definite product not service) and from a technology business – in fact most people mentioned the iPod. This was surprising to me and when we explored why people mentioned this it became clear that they associated innovation with something that was either “not an idea I could come up with” or was “a cool bit of kit that lets me do something I couldn’t before”. In both cases the assumption is that innovation is something people don’t do themselves.

For a cross-section of London’s most active SMEs this was worrying. And their own examples only underlined this concern. few were able to mention an innovation that they had done in the previous year and those that could again mentioned new products.

We decided to probe a little further to get beneath this and it was then that I understood more about what was going on. It wasn’t that none of these businesses were innovating – in fact some were highly innovative – but that they just didn’t see it as this. They saw innovation, with it’s definitions and theories, as something that didn’t involve them, whereas in fact it was what they were doing day in and day out. They thought they were just focusing on the bottom line and growing their business rather than on some ‘innovation’. Based on this we came up with our own definition to add to the mix: Doing things differently to make more money. It seemed to capture the mood nicely.

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