Within the ventures there can be various types of innovation, that is, those ways in which companies can improve their products, processes and services to increase their competitiveness, according to the definition of Economipedia.
Innovation has been classified into different types according to certain parameters. Here we share some of the best known.
Types of innovation according to the Oslo Manual
According to the Oslo Manual, which is a guide for the management of innovation statistics and was first published in 1992, the types of innovation that can be found and applied in a company include:
- Product innovation. It refers to significant changes, although not radical, in the characteristics of goods and services. This type of innovation also implies the introduction of a new good or service or one with a high level of improvement, with respect to its characteristics or its desired use. Within these improvements can be included those made in the technical specifications, components and materials, embedded software, ergonomics or other functional characteristics.
- Process innovation. Improvements to the techniques, equipment or software used by a company are examples of this type of innovation, which basically consists of the implementation of a new or highly improved production or distribution method.
- Organization innovation. This type of innovation is linked to the practice of new work methodologies, which can range from corporate business practices in the organization of the workplace to the company’s external relations.
- Marketing innovation. This kind of innovation is manifested through the implementation of new marketing methods that involve considerable improvements in product design or presentation, or in its positioning policy (in a certain segment or market), promotion or price.
Types of innovation according to the Frascasti Manual
Other parameters to classify innovation are found in the Frascasti Manual, prepared in 2015 by the Organization for Economic Cooperation and Development, OECD. It is a reference methodological manual to measure science, technology and innovation activities, which internationally governs the production and treatment of these Innovation and Development, R&D indicators.
Among the types of innovation that the Frascasti Manual lists are:
radical innovation
- It requires experimentation.
- It represents the pioneering schemes that have been launched (computers, post-it notes, disposable diapers).
- It produces great changes in the world, according to the definition of the economist Joseph Alois Schumpeter.
- It implies a change in the ability of companies to offer new products.
- It focuses on solving problems that clients can barely articulate.
- May result in superior products (lower cost, better or new features).
- The technological knowledge required to develop and exploit it is very different from the existing knowledge in the organization, so it becomes obsolete. In this case, this type of innovation becomes “competition destroyer”.
- It requires new skills and knowledge to implement them in the processes or in the development of products, which causes changes in structure and power in organizations.
Incremental, gradual or evolutionary innovation
- Contribute continuously to the change process.
- It fully adjusts to the low availability of resources and the requirements of the market, which makes it one of the most ingenious.
- The consumer perceives them but they do not essentially change the original concept.
- Although they may contain a new technological element, they do not basically represent a transcendental change.
- They don’t have high barriers to copying, so they tend to be quickly imitated and overtaken by the competition.
- Incremental innovation often follows the introduction of a radical innovation.
- These types of innovations include changes to the brand image, process innovations and design innovation.
architectural innovation
- It contemplates the impact of the components in the system, which causes significant changes in the interaction of the components of a product.
- It is based on architectural knowledge, which is tacit and embedded in the routines and procedures of an organization.
concept innovation
- It refers to the ability to come up with radically different business concepts, or new ways to differentiate existing ones.
- It is the key to creating new wealth.
- It is based on avoiding, not attacking.
- What is not different is not strategic.
- The competition is not between products or companies, but between business models.
- Its goal is to introduce strategic variety into a competitive industry or field.
- Sometimes it requires the organization to form alliances with competitors who have similar interests.
Now that you know the types of innovation that exist, we share 10 innovations to conquer your customers.
With information from the research article Business Innovation. Diffusion, definitions and typology. A literature review. published in the magazine Business Dimension.
Rocio Reyes Communicologist specialized in science journalism and digital marketing. Curiosity leads this being with a cat personality to find links where there seem to be none. Whenever I can, I like to contribute even a grain of what I have learned. Fan of the world of entrepreneurship and MMA.
