Policymakers place great emphasis on innovation as the way for companies, and the economy, to grow and thrive.

Indeed, innovation has become a sort of catch all term for ‘improvement’. But without at least a common understanding of what we all mean by innovation, we will struggle to find a way to discuss it in a meaningful way.

Personally my preferred definition of innovation is “doing something different that has an impact”.

You may notice that I don’t stipulate it has to be a positive impact.

Some innovations turn out to be harmful to businesses (remember ‘New Coke’?). Others can be great for business but aren’t necessarily deemed positive by the larger population. Take, for example, highly innovative banking products such as CDOs (Credit Derivative Options). These were great for the financial services business, but they almost destroyed the global economy!

Innovation does not always turn out for the better, even if that was the original intention.

The main thing to note from my definition of innovation is the deliberate inclusion of the phrase ‘that has an impact’.

For me this is a vital element of innovation. There needs to be some sort of execution of an original idea to the point at which it has an effect, otherwise what we end up talking about is invention, not innovation and the two are very different things.

A lot of people fail to differentiate innovation from invention.

Invention is that creative ‘light bulb moment of a sudden idea. This is by default the act of an individual (Google might have figured out how to let us share documents simultaneously, but our brains still remain stubbornly individual).

The confusion between invention and innovation is compounded by the stereotype of a solution just popping into the head of the lucky inventor.

Although the idea may be ‘sudden‘(because that is how neurons work), it is usually the result of a significant gestation period. Einstein once said “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions”.

Most inventors spend weeks, months, years even thinking about problems before having their sudden epiphanies. Much of this time is taken up with refining – finding better ways to frame the question, and failing – finding ways to not solve the problem.

Innovation is not a moment of creativity but rather a process. One which generates ideas, then refines and tests them, before finally converting the ideas into reality. It can be unpredictable, challenging and frustrating. But it can also be immensely satisfying. Solving a problem, and occasionally creating something that is financially rewarding!


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