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[[Image:Edison and phonograph edit2.jpg|thumb|190px|[[Thomas Edison]] with [[phonograph]]. Edison was one of the most prolific inventors in history, holding [[List of Edison patents|1,093 U.S. patents in his name]].]]
 
'''Innovation''' is the practical implementation of [[ideas]] that result in the introduction of new [[goods]] or [[service (economics)|services]] or improvement in offering goods or services.<ref>{{Cite book|last=Schumpeter, Joseph A., 1883–1950|url=https://www.worldcat.org/oclc/8493721|title=The theory of economic development : an inquiry into profits, capital, credit, interest, and the business cycle|others=Opie, Redvers,, Elliott, John E.|year=1983|isbn=0-87855-698-2|location=New Brunswick, New Jersey|oclc=8493721}}</ref> [[ISO TC 279]] in the standard ISO 56000:2020 <ref>{{cite web | url = https://www.iso.org/obp/ui/#iso:std:iso:56000:ed-1:v1:en:term:3.1.1| title = ISO 56000:2020(en)Innovation management — Fundamentals and vocabulary | date = 2020| work = ISO }}</ref> defines innovation as "a new or changed entity realizing or redistributing [[value (economics)|value]]". Others have different definitions; a common element in the definitions is a focus on newness, improvement, and spread of ideas or technologies.
 
Innovation often takes place through the development of more-effective [[product (business)|product]]s, processes, [[Service (economics)|service]]s, [[technologies]], [[art work]]s<ref>
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| publisher = Valiz
| date = 2018
| isbn = {{Format ISBN|9789492095589}}
| access-date = 10 September 2020
}}
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Surveys of the literature on innovation have found a variety of definitions. In 2009, Baregheh et al. found around 60 definitions in different scientific papers, while a 2014 survey found over 40.<ref name="Henry2014" /> Based on their survey, Baragheh et al. attempted to formulate a multidisciplinary definition and arrived at the following:<blockquote>"Innovation is the multi-stage process whereby organizations transform ideas into new/improved products, service or processes, in order to advance, compete and differentiate themselves successfully in their marketplace"<ref>{{Cite journal|last1=Baregheh|first1=Anahita|last2=Rowley|first2=Jennifer|last3=Sambrook|first3=Sally|date=2009-09-04|title=Towards a multidisciplinary definition of innovation|url=https://www.emerald.com/insight/content/doi/10.1108/00251740910984578/full/html|journal=Management Decision|language=en|volume=47|issue=8|pages=1323–1339|doi=10.1108/00251740910984578|issn=0025-1747}}</ref></blockquote>
In a study of how the [[software industry]] considers innovation, the following definition given by Crossan and Apaydin was considered to be the most complete. Crossan and Apaydin built on the definition given in the [[Organisation for Economic Co-operation and Development|Organisation for Economic Co-operation and Development (OECD)]] Oslo Manual:<ref name="Henry2014">Edison, H., Ali, N.B., & Torkar, R. (2014). [https://torkar.github.io/pdfs/jss-edisonNT13.pdf Towards innovation measurement in the software industry]. ''Journal of Systems and Software'' 86(5), 1390–407.</ref> {{blockquote|Innovation is production or adoption, assimilation, and exploitation of a value-added novelty in economic and social spheres; renewal and enlargement of products, services, and markets; development of new methods of production; and the establishment of new management systems. It is both a process and an outcome.|title=|source=}}
American sociologist [[Everett Rogers]], defined it as follows:<blockquote>"An idea, practice, or object that is perceived as new by an individual or other unit of adoption"<ref>{{Cite book|last=Rogers, Everett M.|url=https://www.worldcat.org/oclc/52030797|title=Diffusion of innovations|date=2003|publisher=Free Press|isbn=0-7432-2209-1|edition=5th|location=New York|oclc=52030797}}</ref></blockquote>
According to Alan Altshuler and Robert D. Behn, innovation includes original invention and creative use. These writers define innovation as generation, admission and realization of new ideas, products, services and processes.<ref>{{Cite book|title=Innovation in American Government: Challenges, Opportunities, and Dilemmas|publisher=Brookings Inst Pr|isbn={{Format ISBN|9780815703587}}|date=1 June 1997|url-access=registration|url=https://archive.org/details/innovationinamer0000unse}}</ref>
 
Two main dimensions of innovation are degree of [[novelty]] (i.e. whether an innovation is new to the firm, new to the market, new to the industry, or new to the world) and kind of innovation (i.e. whether it is process or [[product-service system]] innovation).<ref name="Henry2014" /> Organizational researchers have also distinguished innovation separately from creativity, by providing an updated definition of these two related constructs:{{blockquote|Workplace creativity concerns the cognitive and behavioral processes applied when attempting to generate novel ideas. Workplace innovation concerns the processes applied when attempting to implement new ideas. Specifically, innovation involves some combination of problem/opportunity identification, the introduction, adoption or modification of new ideas germane to organizational needs, the promotion of these ideas, and the practical implementation of these ideas.<ref>{{Cite journal|last1=Hughes|first1=D. J.|last2=Lee|first2=A.|last3=Tian|first3=A. W.|last4=Newman|first4=A.|last5=Legood|first5=A.|year=2018|title=Leadership, creativity, and innovation: A critical review and practical recommendations|journal=The Leadership Quarterly|volume=29|issue=5|pages=549–569|doi=10.1016/j.leaqua.2018.03.001|hdl=10871/32289|s2cid=149671044|url=https://publications.aston.ac.uk/id/eprint/33129/1/LQfinalversionR2_2018.02.22.pdf |archive-url=https://web.archive.org/web/20191224045013/https://publications.aston.ac.uk/id/eprint/33129/1/LQfinalversionR2_2018.02.22.pdf |archive-date=2019-12-24 |url-status=live|hdl-access=free}}</ref>|title=|source=}}
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Another framework was suggested by Henderson and Clark. They divide innovation into four types;
 
* '''Radical innovation''': "establishes a new dominant design and, hence, a new set of core design concepts embodied in components that are linked together in a new architecture." (p.&nbsp;11)<ref name=":1">{{Cite journal|last1=Henderson|first1=Rebecca M.|last2=Clark|first2=Kim B.|date=March 1990|title=Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms|url=http://dx.doi.org/10.2307/2393549|journal=Administrative Science Quarterly|volume=35|issue=1|pagespage=9|doi=10.2307/2393549|jstor=2393549|s2cid=6255046 |issn=0001-8392}}</ref>
* '''Incremental innovation''': "refines and extends an established design. Improvement occurs in individual components, but the underlying core design concepts, and the links between them, remain the same." (p.&nbsp;11)<ref name=":1" />
* '''Architectural innovation''': "innovation that changes only the relationships between them [the core design concepts]" (p.&nbsp;12)<ref name=":1" />
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===Non-economic innovation===
The classical definition of innovation being limited to the primary goal of generating profit for a firm, has led others to define other types of innovation such as: [[social innovation]], [[sustainable innovation]] (or green innovation), and [[responsible innovation]].<ref name=":2">{{Cite journal|last1=Schiederig|first1=Tim|last2=Tietze|first2=Frank|last3=Herstatt|first3=Cornelius|date=22 February 2012|title=Green innovation in technology and innovation management – an exploratory literature review|url=http://dx.doi.org/10.1111/j.1467-9310.2011.00672.x|journal=R&D Management|volume=42|issue=2|pages=180–192|doi=10.1111/j.1467-9310.2011.00672.x|s2cid=153958119|issn=0033-6807}}</ref><ref>{{Citation|last1=Blok|first1=Vincent|title=The Emerging Concept of Responsible Innovation. Three Reasons Why It Is Questionable and Calls for a Radical Transformation of the Concept of Innovation|year=2015|url=http://dx.doi.org/10.1007/978-3-319-17308-5_2|work=Responsible Innovation 2|pages=19–35|place=Cham|publisher=Springer International Publishing|isbn=978-3-319-17307-8|access-date=17 September 2020|last2=Lemmens|first2=Pieter|doi=10.1007/978-3-319-17308-5_2}}</ref>
 
=== Open innovation ===
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==History==
{{See also|Innovation economics}}
The word "innovation" once had a quite different meaning. The first full-length discussion about innovation is the account{{which?|date=February 2022}} by the Greek philosopher and historian [[Xenophon]] (430–355 BCE). He viewed the concept as multifaceted and connected it to political action. The word for innovation that he uses, 'kainotomia', had previously occurred in two plays by [[Aristophanes]] ({{circa |446}} – {{circa | 386}} BCE). [[Plato]] (died {{circa | 348}} BCE) discussed innovation in his [[Laws (dialogue) | ''Laws'']] dialogue and was not very fond of the concept. He was skeptical to it both in culture (dancing and art) and in education (he did not believe in introducing new games and toys to the kids).<ref name=":0">{{Cite book|last=Godin, Benoit|url= https://www.worldcat.org/oclc/903958473|title=Innovation contested : the idea of innovation over the centuries |year= 2015|isbn= 978-1-315-85560-8|location= New York, New York|oclc= 903958473}}</ref> [[Aristotle]] (384–322 BCE) did not like organizational innovations: he believed that all possible forms of organization had been discovered.<ref>Politics II as cited by [[Benoît Godin]] 2015).</ref>
 
Before the 4th century in Rome, the words ''novitas'' and ''res nova / nova res'' were used with either negative or positive judgment on the innovator. This concept meant "renewing" and was incorporated into the new Latin verb word ''innovo'' ("I renew" or "I restore") in the centuries that followed. The ''[[Vulgate]]'' version of the Bible (late 4th century CE) used the word in spiritual as well as political contexts. It also appeared in poetry, mainly with spiritual connotations, but was also connected to political, material and cultural aspects.<ref name=":0" />
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</ref> In the 1800s{{Timeframe|date=February 2022}} people promoting [[capitalism]] saw [[socialism]] as an innovation and spent a lot of energy working against it. For instance, [[Goldwin Smith]] (1823-1910) saw the spread of social innovations as an attack on money and banks. These social innovations were socialism, communism, nationalization, cooperative associations.<ref name=":0" />
 
In the 20th century the concept of innovation did not become popular until after the Second World War of 1939-1945. This is the point in time when people started to talk about ''technological'' product innovation and tie it to the idea of economic growth and competitive advantage.<ref>{{Cite book|last=Godin, Benoit|url= https://www.worldcat.org/oclc/1125747489|title= The invention of technological innovation : languages, discourses and ideology in historical perspective|others=Edward Elgar Publishing|year=2019|isbn=978-1-78990-334-8|location= Cheltenham, UK|oclc=1125747489}}</ref> [[Joseph Schumpeter]] (1883–1950) is often{{quantify|date=February 2022}} credited as the one who made the term popular - he contributed greatly to the study of [[innovation economics]],
 
In [[commerce |business]] and in [[economics]], innovation can provide a catalyst for growth in an enterprise or even in an industry. With rapid advances in [[transportation]] and [[communications]] over the past few decades, the old concepts of [[factor endowment]]s and [[comparative advantage]] which focused on an area's unique inputs are outmoded in today's [[globalization|global economy]].{{cn|date=February 2022}} Schumpeter argued that industries must incessantly revolutionize the economic structure from within, that is: innovate with better or more effective processes and products, as well as with market distribution (such as the transition from the craft shop to factory). He famously asserted that "[[creative destruction]] is the essential fact about [[capitalism]]".<ref name="capsocdem">{{cite book | author = Schumpeter, J. A. | author-link = Joseph Schumpeter | year = 1943 | title = Capitalism, Socialism, and Democracy | publisher = Routledge | edition = 6 | pages = 81–84 | isbn = 978-0-415-10762-4}}</ref> [[Entrepreneur]]s continuously search for better ways to satisfy their [[consumer demand| consumer base]] with improved quality, durability, service and price - searches which may come to fruition in innovation with advanced technologies and organizational strategies.<ref>Heyne, P., Boettke, P. J., and Prychitko, D. L. (2010). ''The Economic Way of Thinking''. Prentice Hall, 12th ed. pp. 163, 317–18.</ref>
 
A prime example of innovation involved the boom of [[Silicon Valley]] start-ups out of the [[Stanford Industrial Park]]. In 1957, dissatisfied employees of [[Shockley Semiconductor]], the company of [[Nobel laureate]] and co-inventor of the [[transistor]] [[William Shockley]], left to form an independent firm, [[Fairchild Semiconductor]]. After several years, Fairchild developed into a formidable presence in the sector.{{which?|date=February 2022}} Eventually, these founders left to start their own companies based on their own unique ideas, and then leading employees started their own firms. Over the next 20 years this process resulted in the momentous [[startup company| startup-company]] explosion of [[information technology|information-technology]] firms.{{cn|date=February 2022}} Silicon Valley began as 65 new enterprises born out of Shockley's eight former employees.<ref>{{cite web |url= http://www.netvalley.com/svhistory.html |title= Silicon Valley History & Future |website= Netvalley.com |access-date= 14 March 2016 | quote = [...] over the course of just 20 years, a mere eight of Shockley’sShockley's former employees gave forth 65 new enterprises, which then went on to do the same. The process is still going [...].}}</ref>
 
Another example involves [[business incubator]]s – a phenomenon introduced in 1959 and subsequently nurtured by governments around the world. Such "incubators", located close to knowledge clusters (mostly research-based) like universities or other government [[Center of excellence | excellence centre]]s – aim primarily to channel generated knowledge to applied innovation outcomes in order to stimulate regional or national [[economic growth]].<ref>
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|last1 = Hashim
|first1 = Ahmed S.
|author-link1 =
|title = The Caliphate at War: The Ideological, Organisational and Military Innovations of Islamic State
|year = 2018
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|publication-date = 2018
|page = 7
|isbn = {{Format ISBN|9781849046435}}
|access-date = 8 February 2022
|quote = Though IS is not unique as an example of a violent nonstate actor, I argue that IS has innovated in the fields of ideology, organization, war-fighting, and strategies of state-formation.
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|last2 = Derrick
|first2 = Douglas C.
|author-link2 =
|last3 = Harms
|first3 = Mackenzie
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|publisher = Oxford University Press
|publication-date = 2017
|isbn = {{Format ISBN|9780190695323}}
|access-date = 8 February 2022
|quote = As seen in recent advancements by the Islamic State in Iraq and Syria (ISIS), innovation from VEOs [violent extremist organisations] can also occur in recruiting/marketing campaigns and fundraising efforts.
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== Process of innovation ==
An early model included only three phases of innovation. According to Utterback (1971), these phases were: 1) idea generation, 2) problem solving, and 3) implementation.<ref>{{Cite journal|last=Utterback|first=James|year=1971|title=The Process of Technological Innovation Within the Firm|journal=Academy of Management Journal|volume=14|issue=1|pagespage=78|doi=10.2307/254712 |jstor=254712 }}</ref> By the time one completed phase 2, one had an invention, but until one got it to the point of having an economic impact, one did not have an innovation. Diffusion was not considered a phase of innovation. Focus at this point in time was on manufacturing.
 
All organizations can innovate, including for example hospitals, universities, and local governments.<ref>{{cite journal|pmid=19104264|year=2009|last1=Salge|first1=T. O.|title=Hospital innovativeness and organizational performance: Evidence from English public acute care|journal=Health Care Management Review|volume=34|issue=1|pages=54–67|last2=Vera|first2=A.|doi=10.1097/01.HMR.0000342978.84307.80}}</ref> The organization requires a proper structure in order to retain competitive advantage. Organizations can also improve profits and performance by providing work groups opportunities and resources to innovate, in addition to employee's core job tasks.<ref>{{cite journal|last1=West|first1=Michael A.|year=2002|title=Sparkling Fountains or Stagnant Ponds: An Integrative Model of Creativity and Innovation Implementation in Work Groups|journal=Applied Psychology|volume=51|issue=3|pages=355–387|doi=10.1111/1464-0597.00951}}</ref> Executives and managers have been advised to break away from traditional ways of thinking and use change to their advantage.<ref>''MIT Sloan Management Review'' Spring 2002. "How to identify and build New Businesses"</ref> The world of work is changing with the increased use of technology and companies are becoming increasingly competitive. Companies will have to downsize or reengineer their operations to remain competitive. This will affect employment as businesses will be forced to reduce the number of people employed while accomplishing the same amount of work if not more.<ref>Anthony, Scott D.; Johnson, Mark W.; Sinfield, Joseph V.; Altman, Elizabeth J. (2008). ''Innovator's Guide to Growth''. "Putting Disruptive Innovation to Work". Harvard Business School Press. {{ISBN|978-1-59139-846-2}}.</ref>
 
For instance, former Mayor [[Martin O’MalleyO'Malley]] pushed the [[City of Baltimore]] to use [[CitiStat]], a [[Performance measurement|performance-measurement]] data and management system that allows city officials to maintain statistics on several areas from crime trends to the conditions of [[pothole]]s. This system aided in better evaluation of policies and procedures with accountability and efficiency in terms of time and money. In its first year, CitiStat saved the city $13.2 million.<ref>Perez, T. and Rushing R. (2007). [https://www.americanprogress.org/issues/general/reports/2007/04/23/2911/the-citistat-model-how-data-driven-government-can-increase-efficiency-and-effectiveness/ "The CitiStat Model: How Data-Driven Government Can Increase Efficiency and Effectiveness"]. ''Center for American Progress Report''. pp. 1–18.</ref> Even [[mass transit]] systems have innovated with [[hybrid vehicle|hybrid]] bus fleets to [[Real-time locating system|real-time tracking]] at bus stands. In addition, the growing use of [[mobile data terminal]]s in vehicles, that serve as communication hubs between vehicles and a control center, automatically send data on location, passenger counts, engine performance, mileage and other information. This tool helps to deliver and manage transportation systems.<ref>Transportation Research Board (2007). "Transit Cooperative Research Program (TCRP) Synthesis 70: Mobile Data Terminals". pp. 1–5. [http://onlinepubs.trb.org/onlinepubs/tcrp/tcrp_syn_70.pdf TCRP (PDF)].</ref>
 
Still other innovative strategies include [[hospital]]s digitizing medical information in [[electronic medical records]]. For example, the [[United States Department of Housing and Urban Development|U.S. Department of Housing and Urban Development]]'s [[HOPE VI]] initiatives turned severely distressed [[public housing]] in urban areas into [[Urban renewal|revitalized]], mixed-income environments; the [[Harlem Children’sChildren's Zone]] used a community-based approach to educate local area children; and the [[U.S. Environmental Protection Agency|Environmental Protection Agency]]'s [[Brownfield regulation and development|brownfield grants]] facilitates turning over [[brownfield]]s for [[environmental protection]], [[Open space reserve|green spaces]], [[Community development|community]] and [[Commerce|commercial development]].
{{Further|Demand articulation}}
 
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In the simplest [[linear model of innovation]] the traditionally recognized source is ''manufacturer innovation''. This is where a person or business innovates in order to sell the innovation.
 
Another source of innovation is ''end-user innovation''. This is where a person or company develops an innovation for their own (personal or in-house) use because existing products do not meet their needs. [[Massachusetts Institute of Technology|MIT]] economist [[Eric von Hippel]] identified end-user innovation as the most important source in his classic book on the subject, ''"The Sources of Innovation"''.<ref>{{cite book |url=http://web.mit.edu/evhippel/www/books/sources/SofI.pdf |title=The Sources of Innovation |last=Von Hippel |first=Eric |author-link=Eric von Hippel |publisher=[[Oxford University Press]] |year=1988 |url-status=dead |archive-url=https://web.archive.org/web/20061012160410/http://web.mit.edu/evhippel/www/books/sources/SofI.pdf |archive-date=12 October 2006 |access-date=3 December 2015}}</ref>
 
The robotics engineer [[Joseph F. Engelberger]] asserts that innovations require only three things:
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[[Information technology]] and changing business processes and management style can produce a work climate favorable to innovation.<ref>{{cite web|url=http://forbesindia.com/article/ie/new-trends-in-innovation-management/33905/1 |website=Forbesindia.com |publisher=Forbes India Magazine |title= New Trends in Innovation Management |access-date=14 March 2016}}</ref> For example, the software tool company [[Atlassian]] conducts quarterly "ShipIt Days" in which employees may work on anything related to the company's products.<ref>{{cite web|url=https://www.atlassian.com/company/about/shipit |title=ShipIt Days |publisher=Atlassian |access-date=14 March 2016}}</ref> Google employees work on self-directed projects for 20% of their time (known as [[Innovation Time Off]]). Both companies cite these bottom-up processes as major sources for new products and features.
 
An important innovation factor includes customers buying products or using services. As a result, organizations may incorporate users in [[focus group]]s (user centered approach), work closely with so-called [[lead users]] (lead user approach), or users might adapt their products themselves. The lead user method focuses on idea generation based on leading users to develop breakthrough innovations. U-STIR, a project to innovate [[Europe]]'s surface [[transportation]] system, employs such workshops.<ref>{{cite web |url=http://www.u-stir.eu/index.phtml?id=2537&ID1=2537&sprache=en |title=U-STIR |publisher=U-stir.eu |access-date=7 September 2011 |url-status=dead |archive-url=https://web.archive.org/web/20110918055455/http://www.u-stir.eu/index.phtml?id=2537&ID1=2537&sprache=en |archive-date=18 September 2011}}</ref> Regarding this [[user innovation]], a great deal of innovation is done by those actually implementing and using technologies and products as part of their normal activities. Sometimes user-innovators may become [[entrepreneur]]s, selling their product, they may choose to trade their innovation in exchange for other innovations, or they may be adopted by their suppliers. Nowadays, they may also choose to freely reveal their innovations, using methods like [[Open-source model|open source]]. In such networks of innovation the users or communities of users can further develop technologies and reinvent their social meaning.<ref>Tuomi, I. (2002). ''Networks of Innovation''. Oxford University Press. [http://www.oup.com/uk/catalogue/?ci=9780199256983 Networks of Innovation] {{webarchive|url=https://web.archive.org/web/20071105071932/http://www.oup.com/uk/catalogue/?ci=9780199256983 |date=5 November 2007 }}</ref><ref>Siltala, R. (2010). [https://www.linkedin.com/pulse/innovativity-cooperative-learning-business-life-teaching-siltala ''Innovativity and cooperative learning in business life and teaching'']. PhD thesis. University of Turku.</ref>
 
One technique for innovating a solution to an identified problem is to actually attempt an experiment with many possible solutions.<ref>[https://medium.com/the-mission/forget-about-the-10-000-hour-rule-7b7a39343523 Forget The 10,000-Hour Rule; Edison, Bezos, & Zuckerberg Follow The 10,000-Experiment Rule]. Medium.com (26 October 2017). Retrieved 16 October 2018.</ref> This technique was famously used by [[Thomas Edison|Thomas Edison's]] laboratory to find a version of the [[incandescent light bulb]] economically viable for home use, which involved searching through thousands of possible [[electrical filament|filament]] designs before settling on carbonized bamboo.
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==Measures==
Measuring innovation is inherently difficult as it implies commensurability so that comparisons can be made in quantitative terms. Innovation, however, is by definition novelty. Comparisons are thus often meaningless across products or service.<ref>{{Cite book|title=The Oxford handbook of innovation|date=2005|publisher=Oxford University Press|others=Fagerberg, Jan., Mowery, David C., Nelson, Richard R.|isbn={{Format ISBN|9780199264551}}|location=Oxford|oclc=56655392}}</ref> Nevertheless, Edison et al.<ref name="Henry2013">{{cite journal|last1=Edison|first1=H.|last2=Ali|first2=N.B.|last3=Torkar|first3=R.|year=2013|title=Towards innovation measurement in the software industry|url=https://www.researchgate.net/publication/256991991|journal=Journal of Systems and Software|volume=86|issue=5|pages=1390–1407|doi=10.1016/j.jss.2013.01.013|via=ResearchGate}}</ref> in their review of literature on [[innovation management]] found 232 innovation metrics. They categorized these measures along five dimensions; i.e. inputs to the innovation process, output from the innovation process, effect of the innovation output, measures to access the activities in an innovation process and availability of factors that facilitate such a process.<ref name="Henry2013" />
 
There are two different types of measures for innovation: the organizational level and the political level.
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:For the political level, measures of innovation are more focused on a country or region [[competitive advantage]] through innovation. In this context, organizational capabilities can be evaluated through various evaluation frameworks, such as those of the European Foundation for Quality Management. The [[OECD]] Oslo Manual (1992) suggests standard guidelines on measuring technological product and process innovation. Some people consider the [[Oslo Manual]] complementary to the [[Frascati Manual]] from 1963. The new Oslo Manual from 2018 takes a wider perspective to innovation, and includes marketing and organizational innovation. These standards are used for example in the European [[Community Innovation Survey]]s.<ref>OECD The Measurement of Scientific and Technological Activities. Proposed Guidelines for Collecting and Interpreting Technological Innovation Data. Oslo Manual. 2nd edition, DSTI, OECD / European Commission Eurostat, Paris 31 December 1995.</ref>
 
Other ways of measuring innovation have traditionally been expenditure, for example, investment in R&D (Research and Development) as percentage of GNP (Gross National Product). Whether this is a good measurement of innovation has been widely discussed and the Oslo Manual has incorporated some of the critique against earlier methods of measuring. The traditional methods of measuring still inform many policy decisions. The EU [[Lisbon Strategy]] has set as a goal that their average expenditure on R&D should be 3% of GDP.<ref>{{cite web |url=http://ec.europa.eu/enterprise/policies/innovation/ |title=Industrial innovation – Enterprise and Industry |publisher=European Commission |access-date=7 September 2011 |url-status=dead |archive-url=https://web.archive.org/web/20110827125633/http://ec.europa.eu/enterprise/policies/innovation/ |archive-date=27 August 2011}}</ref>
 
===Indicators===
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Some academics claim cost-effectiveness research is a valuable value-based measure of innovation which accords "truly significant" therapeutic advances (i.e. providing "health gain") higher prices than free market mechanisms.<ref>{{cite journal |last1=Roughead |first1=E. |last2=Lopert |first2=R. |last3=Sansom |first3=L. |title=Prices for innovative pharmaceutical products that provide health gain: a comparison between Australia and the United States |journal=Value in Health |year=2007 |volume=10 |issue=6 |pages=514–20 |doi=10.1111/j.1524-4733.2007.00206.x |pmid=17970935 |doi-access=free }}</ref> Such [[value-based pricing]] has been viewed as a means of indicating to industry the type of innovation that should be rewarded from the public purse.<ref>{{cite journal |last=Hughes |first=B. |title=Payers Growing Influence on R&D Decision Making |journal=Nature Reviews Drug Discovery |year=2008 |volume=7 |issue= 11|pages=876–78 |doi=10.1038/nrd2749 |pmid=18974741 |s2cid=10217053 }}</ref>
 
An Australian academic developed the case that national comparative [[cost-effectiveness analysis]] systems should be viewed as measuring "health innovation" as an [[evidence-based policy]] concept for valuing innovation distinct from valuing through competitive markets, a method which requires strong [[anti-trust]] laws to be effective, on the basis that both methods of assessing [[pharmaceutical innovations]] are mentioned in annex 2C.1 of the [[AUSFTA|Australia-United States Free Trade Agreement]].<ref>{{cite journal |last1=Faunce |first1=T. |last2=Bai |first2=J. |last3=Nguyen |first3=D. |title=Impact of the Australia-US Free Trade Agreement on Australian medicines regulation and prices |journal=[[Journal of Generic Medicines]] |year=2010 |volume=7 |issue=1 |pages=18–29 |doi=10.1057/jgm.2009.40 |s2cid=154433476 |url=https://openresearch-repository.anu.edu.au/bitstream/1885/51254/9/Faunce_Journal_Evidence_JGM.pdf.jpg |archive-url=https://web.archive.org/web/20210416220209/https://openresearch-repository.anu.edu.au/bitstream/1885/51254/9/Faunce_Journal_Evidence_JGM.pdf.jpg |archive-date=2021-04-16 |url-status=live }}</ref><ref>{{cite web|author=Faunce TA|title=Global intellectual property protection of 'innovative' pharmaceuticals: Challenges for bioethics and health law in B Bennett and G Tomossy|website=Law.anu.edu.au|publisher=Globalization and Health Springer|year=2006|url=http://law.anu.edu.au/StaffUploads/236-Ch%20Globalisation%20and%20Health%20Fau.pdf|access-date=18 June 2009|url-status=dead|archive-url=https://web.archive.org/web/20110414040804/http://law.anu.edu.au/StaffUploads/236-Ch%20Globalisation%20and%20Health%20Fau.pdf|archive-date=14 April 2011}}</ref><ref>{{cite journal |last=Faunce |first=T. A. |title=Reference pricing for pharmaceuticals: is the Australia-United States Free Trade Agreement affecting Australia's Pharmaceutical Benefits Scheme? |journal=Medical Journal of Australia |year=2007 |volume=187 |issue=4 |pages=240–42|pmid=17564579 |doi=10.5694/j.1326-5377.2007.tb01209.x |s2cid=578533 }}</ref>
 
===Indices===
Several indices attempt to measure innovation and rank entities based on these measures, such as:
*[[Bloomberg Innovation Index]]
*"Bogota Manual"<ref>{{cite web |url=http://www.ricyt.org/index.php?option=com_docman&task=doc_download&gid=149&Itemid=2 |title=Bogota Manual. Standardisation of Indicators of Technological Innovation in Latin American and Caribbean Countries |authorsauthor=Hernán Jaramillo, |author2=Gustavo Lugones, |author3=Mónica Salazar |date=March 2001 |publisher=Iberoamerican Network of Science and Technology Indicators (RICYT) Organisation of American States (OAS) / CYTED PROGRAM COLCIENCIAS/OCYT |page=87 |language=en}}</ref> similar to the Oslo Manual, is focused on Latin America and the Caribbean countries.{{citation needed|date=February 2016}}
*"Creative Class" developed by [[Richard Florida]]{{citation needed|date=February 2016}}
*[[EIU Innovation Ranking]]<ref>{{Cite news|title=Social Innovation Index 2016|url=https://eiuperspectives.economist.com/technology-innovation/old-problems-new-solutions-measuring-capacity-social-innovation-across-world-0|access-date=2021-04-07|newspaper=Economist Impact &#124; Perspectives|language=en}}</ref>
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===Rankings===
Common areas of focus include: [[high-tech]] companies, [[manufacturing]], [[patent]]s, [[post secondary education]], [[research and development]], and research personnel. The left ranking of the top 10 countries below is based on the 2020 [[Bloomberg Innovation Index]].<ref>{{Cite news|title=Germany Breaks Korea's Six-Year Streak as Most Innovative Nation|publisher=Bloomberg L.P.|url=https://www.bloomberg.com/news/articles/2020-01-18/germany-breaks-korea-s-six-year-streak-as-most-innovative-nation|url-status=live|access-date=17 March 2021}}</ref> However, studies may vary widely; for example the [[Global Innovation Index]] 2016 ranks [[Switzerland]] as number one wherein countries like [[South Korea]], [[Japan]], and [[China]] do not even make the top ten.<ref>{{cite web|url=https://de.statista.com/infografik/5509/die-10-innovativsten-laender-weltweit-nach-dem-global-innovation-index/|title=Infografik: Schweiz bleibt globaler Innovationsführer|website=Statista Infografiken|publisher=Statista (In German)|access-date=25 November 2016}}</ref>
 
{{Columns-start|width=50%}}
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=== Rate of innovation ===
In 2005 [[Jonathan Huebner]], a [[physicist]] working at the [[Pentagon Building|Pentagon]]'s [[Naval Air Weapons Station China Lake|Naval Air Warfare Center]], argued on the basis of both U.S. [[patent]]s and world technological breakthroughs, per capita, that the rate of human technological innovation peaked in 1873 and has been slowing ever since.<ref name=Huebner>{{Cite journal | last1 = Huebner | first1 = J. | title = A possible declining trend for worldwide innovation | doi = 10.1016/j.techfore.2005.01.003 | journal = [[Technological Forecasting and Social Change]] | volume = 72 | issue = 8 | pages = 980–986 | year = 2005 | url = https://zenodo.org/record/1259385 }}</ref><ref>{{cite news|url=https://www.usnews.com/usnews/culture/articles/050707/7inventor.htm|title=Science: Wanna be an inventor? Don't bother|last=Hayden|first=Thomas|date=7 July 2005|work=U.S. News & World Report|access-date=10 June 2013|archive-url=https://web.archive.org/web/20131101195406/http://www.usnews.com/usnews/culture/articles/050707/7inventor.htm|archive-date=1 November 2013|url-status=dead}}</ref> In his article, he asked "Will the level of technology reach a maximum and then decline as in the Dark Ages?"<ref name=Huebner/> In later comments to ''[[New Scientist]]'' magazine, Huebner clarified that while he believed that we will reach a rate of innovation in 2024 equivalent to that of the [[Dark Ages (historiography)|Dark Ages]], he was not predicting the reoccurrence of the Dark Ages themselves.<ref>{{cite news|last=Adler|first=Robert|title=Entering a dark age of innovation|url=https://www.newscientist.com/article/dn7616-entering-a-dark-age-of-innovation.html|access-date=30 May 2013|newspaper=New Scientist|date=2 July 2005}}</ref>
 
John Smart criticized the claim and asserted that [[technological singularity]] researcher [[Ray Kurzweil]] and others showed a "clear trend of acceleration, not deceleration" when it came to innovations.<ref>{{Cite journal | last1 = Smart | first1 = J. | title = Discussion of Huebner article | doi = 10.1016/j.techfore.2005.07.001 | journal = [[Technological Forecasting and Social Change]] | volume = 72 | issue = 8 | pages = 988–995 | year = 2005 }}</ref> The foundation replied to Huebner the journal his article was published in, citing [[Second Life]] and [[eHarmony]] as proof of accelerating innovation; to which Huebner replied.<ref>{{cite journal|last1=Huebner|first1=Jonathan|title=Response by the Authors|journal=[[Technological Forecasting and Social Change]]|volume=72|issue=8|pages=995–1000|doi=10.1016/j.techfore.2005.05.008|year=2005}}</ref>
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===Innovation and development===
The theme of innovation as a tool to disrupting patterns of poverty has gained momentum since the mid-2000s among major [[international development]] actors such as [[DFID]],<ref>{{cite web|url=https://dfid.blog.gov.uk/author/jonathan-wong-head-of-dfids-innovation-hub/ |title=Jonathan Wong, Head of DFID's Innovation Hub &#124; DFID bloggers |publisher=Government of the United Kingdom |date=24 September 2014 |access-date=14 March 2016}}</ref> [[Gates Foundation]]'s use of the [[Grand Challenge]] funding model,<ref>{{cite web|url=http://www.gatesfoundation.org/Media-Center/Press-Releases/2014/10/Gates-Foundation-Grand-Challenges-Breakthrough-Science |title=Bill & Melinda Gates Foundation and Grand Challenge Partners Commit to Innovation with New Investments in Breakthrough Science – Bill & Melinda Gates Foundation |website=Gatesfoundation.org |date=7 October 2014 |access-date=14 March 2016}}</ref> and [[USAID]]'s Global Development Lab.<ref>{{cite web|url=http://www.usaid.gov/GlobalDevLab |title=Global Development Lab &#124; U.S. Agency for International Development |website=Usaid.gov |date=5 August 2015 |access-date=14 March 2016}}</ref> Networks have been established to support innovation in development, such as D-Lab at [[MIT]].<ref>{{cite web|url=http://d-lab.mit.edu/idin |title=International Development Innovation Network (IDIN) &#124; D-Lab |website=D-lab.mit.edu |access-date=14 March 2016}}</ref> Investment funds have been established to identify and catalyze innovations in [[developing countries]], such as DFID's Global Innovation Fund,<ref>{{cite web|url=https://www.gov.uk/international-development-funding/global-innovation-fund |title=Global Innovation Fund International development funding |publisher=Government of the United Kingdom |access-date=14 March 2016}}</ref> [[Human Development Innovation Fund]],<ref>{{cite web|url=http://www.hdif-tz.org |title=Human Development Innovation Fund (HDIF) |website=Hdif-tz.org |date=14 August 2015 |access-date=14 March 2016}}</ref> and (in partnership with USAID) the Global Development Innovation Ventures.<ref>{{cite web |url=http://www.usaid.gov/news-information/press-releases/usaid-and-dfid-announce-global-development-innovation-ventures |title=USAID and DFID Announce Global Development Innovation Ventures to Invest in Breakthrough Solutions to World Poverty &#124; U.S. Agency for International Development |website=Usaid.gov |date=6 June 2013 |access-date=14 March 2016 |archive-url=https://web.archive.org/web/20170504030509/https://www.usaid.gov/news-information/press-releases/usaid-and-dfid-announce-global-development-innovation-ventures |archive-date=4 May 2017 |url-status=dead }}</ref>
 
The United States has to continue to play on the same level of playing field as its competitors in federal research. This can be achieved being strategically innovative through investment in basic research and science".<ref>{{Cite web|url=https://www.industryweek.com/the-economy/public-policy/article/21121160/declining-federal-research-undercuts-the-us-strategy-of-innovation|title=StackPath|website=industryweek.com|access-date=28 April 2020}}</ref>
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Given its effects on [[efficiency]], [[quality of life]], and [[productivity|productive growth]], innovation is a key driver in improving society and economy. Consequently, policymakers have worked to develop environments that will foster innovation, from funding [[research and development]] to establishing regulations that do not inhibit innovation, funding the development of innovation clusters, and using public purchasing and standardisation to 'pull' innovation through.
 
For instance, experts are advocating that the U.S. federal government launch a National Infrastructure Foundation, a nimble, collaborative strategic intervention organization that will house innovations programs from fragmented silos under one entity, inform federal officials on innovation [[performance measurement|performance metrics]], strengthen industry-university partnerships, and support innovation [[economic development]] initiatives, especially to strengthen [[business cluster|regional clusters]]. Because clusters are the geographic incubators of innovative products and processes, a cluster development grant program would also be targeted for implementation. By focusing on innovating in such areas as precision [[manufacturing]], [[information technology]], and [[clean energy]], other areas of national concern would be tackled including [[government debt]], [[carbon footprint]], and [[oil dependence]].<ref name="MetroPolicy"/> The U.S. [[Economic Development Administration]] understand this reality in their continued Regional Innovation Clusters initiative.<ref>{{cite web|url=http://www.eda.gov/PDF/EDA_FY_2010_Annual_Report.pdf |archive-url=https://web.archive.org/web/20110922001813/http://www.eda.gov/PDF/EDA_FY_2010_Annual_Report.pdf |archive-date=2011-09-22 |url-status=live |title=U.S. Economic Development Administration : Fiscal Year 2010 Annual Report |website=Eda.gov |access-date=14 March 2016}}</ref> The United States also has to integrate her supply-chain and improve her applies research capability and downstream process innovation.<ref>{{Cite web|url=https://americanaffairsjournal.org/2018/05/the-american-way-of-innovation-and-its-deficiencies/|title=The American Way of Innovation and Its Deficiencies|date=20 May 2018|website=American Affairs Journal|language=en-US|access-date=28 April 2020}}</ref>
 
Many countries recognize the importance of innovation including Japan's [[Ministry of Education, Culture, Sports, Science and Technology]] (MEXT);<ref>{{cite web |url=http://www.mext.go.jp/english/a06.htm |title=Science and Technology |publisher=MEXT |access-date=7 September 2011 |url-status=dead |archive-url=https://web.archive.org/web/20110905171421/http://www.mext.go.jp/english/a06.htm |archive-date=5 September 2011}}</ref> Germany's [[Federal Ministry of Education and Research]];<ref>{{cite web|url=http://www.bmbf.de/en/Ministry.php |title=BMBF " Ministry |publisher=Bmbf.de |access-date=7 September 2011}}</ref> and the [[Ministry of Science and Technology of the People's Republic of China|Ministry of Science and Technology]] in the People's Republic of China. Russia's innovation programme is the [[Medvedev modernisation programme]] which aims to create a diversified economy based on high technology and innovation. The [[Government of Western Australia]] has established a number of innovation incentives for government departments. [[Landgate]] was the first Western Australian government agency to establish its Innovation Program.<ref>{{cite web|url=http://www.landgate.wa.gov.au/innovation |title=Home |website=Landgate.wa.gov.au |publisher=Landgate Innovation Program |access-date=14 March 2016}}</ref>
 
Some [[regions]] have taken a proactive role in supporting innovation. Many regional governments are setting up innovation agencies to strengthen regional capabilities.<ref>Morisson, A. & Doussineau, M. (2019). Regional innovation governance and place-based policies: design, implementation and implications. Regional Studies, Regional Science,6(1),101–116. https://rsa.tandfonline.com/doi/full/10.1080/21681376.2019.1578257.</ref> In 2009, the municipality of [[Medellin]], [[Colombia]] created [[Ruta N]] to transform the city into a knowledge city.<ref>{{Cite journal | doi=10.1080/23792949.2018.1538702|title = Knowledge Gatekeepers and Path Development on the Knowledge Periphery: The Case of Ruta N in Medellin, Colombia| journal=Area Development and Policy|volume = 4| pages=98–115|year = 2018|last1 = Morisson|first1 = Arnault|s2cid = 169689111}}</ref>
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==Further reading==
* Bloom, Nicholas, Charles I. Jones, John Van Reenen, and Michael Webb. 2020. "[https://www.aeaweb.org/articles?id=10.1257/aer.20180338 Are Ideas Getting Harder to Find?]", ''[[American Economic Review]]'', 110 (4): 1104–44.
* {{cite book |title=Where Good Ideas Come From |author=Steven Johnson |publisher=Riverhead Books |isbn={{Format ISBN|9781594485381}} |year=2011}}
* {{cite book| title=Stretch: Unlock the Power of Less and Achieve More Than You Ever Imagined |year=2017 |first=Scott |last=Sonenshein |publisher=Harper Business |isbn={{Format ISBN|978-0062457226}}}}
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