Invention and Innovation -Buse Solmaz

Invention and Innovation

Invention if the formulation of new ideas for products or processes.

Innovation is all about the practical application of new inventions into marketable products or services.

Most of us have visions of mad inventors who come up with ideas with no practical use! Like everything else in Business Studies, we are interested in activities that actually help a firm meet its objectives, such as growth, profitability, increased market share or stability – so it is Innovation, rather than Invention, that really counts

http://www.pnas.org/content/93/23/12709.short  <----- an article.

Product (or service) Innovation

Advantages might include (note links to marketing)

• ‘First mover advantage’ – which can include some of the following;
• Higher prices and profitability
• Added value
• Opportunity to build early customer loyalty
• Enhanced reputation as an innovative company
• Public Relations – e.g. news coverage
• Increased market share

Process Innovation

This has to do with finding better or more efficient ways of

• producing existing products, or
• delivering existing services.

Advantages might include:

• Reduced costs
• Improved quality
• More responsive customer service
• Greater flexibility

Possible drawbacks

• Loss of jobs, especially if work is outsourced
• Need for re-training of workers