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I have added findings from recent academic research on the context in which innovation is taking place. I have done that as the former version was a bit biased in the way innovation was framed in a very positive way. I have added some criticisms and a non-hegemonic account in the end. I have also restructured the history part and moved the non-history related content elsewhere.
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In 1957 the economist [[Robert Solow]] was able to demonstrate that [[economic growth]] had two components. The first component could be attributed to growth in [[Production (economics)|production]] including [[wage labour]] and [[Capital (economics)|capital]]. The second component was found to be [[productivity]]. Ever since, economic historians have tried to explain the process of innovation itself, rather than assuming that technological inventions and technological progress result in productivity growth.<ref>{{cite book | author1=Leonard Dudley |title=Mothers of Innovation: How Expanding Social Networks Gave Birth to the Industrial Revolution |publisher= Cambridge Scholars Publishing |year=2012 |page=4 |isbn=9781443843126 }}</ref>
 
The concept of innovation emerged after the Second World War, mostly thanks to the works of [[Joseph Schumpeter]] (1883–1950) who described the economic effects of innovation processes as ''[[Creative destruction|Constructive destruction]]''. Today, consistent neo-Schumpeterian scholars see innovation not as neutral or apolitical processes.<ref>{{Cite book |lastlast1=Jasanoff |firstfirst1=Sheila |url=http://dx.doi.org/10.7208/chicago/9780226276663.001.0001 |title=Dreamscapes of Modernity |last2=Kim |first2=Sang-Hyun |date=2015 |publisher=University of Chicago Press |doi=10.7208/chicago/9780226276663.001.0001 |isbn=978-0-226-27652-6}}</ref><ref>{{Cite journal |last=Papaioannou |first=Theo |date=2020-05-03 |title=Innovation, value-neutrality and the question of politics: unmasking the rhetorical and ideological abuse of evolutionary theory |url=https://www.tandfonline.com/doi/full/10.1080/23299460.2019.1605484 |journal=Journal of Responsible Innovation |language=en |volume=7 |issue=2 |pages=238–255 |doi=10.1080/23299460.2019.1605484 |s2cid=159275720 |issn=2329-9460}}</ref> Rather, innovation can be seen as socially constructed processes. Therefore, its conception depends on the political and societal context in which innovation is taking place.<ref>{{Cite journal |lastlast1=Robra |firstfirst1=Ben |last2=Pazaitis |first2=Alex |last3=Giotitsas |first3=Chris |last4=Pansera |first4=Mario |date=2023-07-01 |title=From creative destruction to convivial innovation - A post-growth perspective |url=https://www.sciencedirect.com/science/article/pii/S0166497223000718 |journal=Technovation |volume=125 |pages=102760 |doi=10.1016/j.technovation.2023.102760 |issn=0166-4972}}</ref> According to Shannon Walsh, “innovation today is best understood as innovation under capital” (p. 346).<ref name=":5">{{Cite journal |last=Walsh |first=Shannon |date=2021-05-21 |title=Marx, subsumption and the critique of innovation |url=http://dx.doi.org/10.1177/13505084211015377 |journal=Organization |volume=30 |issue=2 |pages=345–360 |doi=10.1177/13505084211015377 |s2cid=236375680 |issn=1350-5084}}</ref> This means that the current hegemonic purpose for innovation is capital valorisation and profit maximization, exemplified by the appropriation of knowledge (e.g., through [[Patent|patenting]]), the widespread practice of [[Planned obsolescence]] (incl. lack of [[Repairability|repairability by design]]), and the [[Jevons paradox]], that describes negative consequences of eco-efficiency as energy-reducing effects tend to trigger mechanisms leading to energy-increasing effects.<ref>{{Cite journal |lastlast1=Lange |firstfirst1=Steffen |last2=Pohl |first2=Johanna |last3=Santarius |first3=Tilman |date=2020-10-01 |title=Digitalization and energy consumption. Does ICT reduce energy demand? |url=https://www.sciencedirect.com/science/article/pii/S0921800919320622 |journal=Ecological Economics |volume=176 |pages=106760 |doi=10.1016/j.ecolecon.2020.106760 |s2cid=224947774 |issn=0921-8009}}</ref>
 
== Types ==
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==History==
{{See also|Innovation economics}}
Innovation must be understood in the historical setting in which its processes were and are taking place. <ref>{{Cite journal |lastlast1=Robra |firstfirst1=Ben |last2=Pazaitis |first2=Alex |last3=Giotitsas |first3=Chris |last4=Pansera |first4=Mario |date=2023-07-01 |title=From creative destruction to convivial innovation - A post-growth perspective |url=https://www.sciencedirect.com/science/article/pii/S0166497223000718 |journal=Technovation |volume=125 |pages=102760 |doi=10.1016/j.technovation.2023.102760 |issn=0166-4972}}</ref> The first full-length discussion about innovation was published 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 |title=Innovation contested: the idea of innovation over the centuries |year= 2015 |publisher=Routledge |isbn= 9781315855608 |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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[[Niccolò Machiavelli| Machiavelli]]'s ''[[The Prince]]'' (1513) discusses innovation in a political setting. Machiavelli portrays it as a strategy a Prince may employ in order to cope with a constantly changing world as well as the corruption within it. Here innovation is described as introducing change in government (new laws and institutions); Machiavelli's later book ''The Discourses'' (1528) characterises innovation as imitation, as a return to the original that has been corrupted by people and by time.{{cn|date=February 2022}} Thus for Machiavelli innovation came with positive connotations. This is however an exception in the usage of the concept of innovation from the 16th century and onward. No innovator from the renaissance until the late 19th century ever thought of applying the word innovator upon themselves, it was a word used to attack enemies.<ref name=":0" />
 
From the 1400s{{citation needed|date=September 2020}} through the 1600s, the concept of innovation was pejorative – the term was an [[Early Modern English| early-modern]] synonym for "rebellion", "revolt" and "[[heresy]]".<ref name="Mazzaferro">{{cite journal| last1= Mazzaferro|first1= Alexander| year= 2018| title= Such a Murmur": Innovation, Rebellion, and Sovereignty in William Strachey's "True Reportory| journal=Early American Literature|volume= 53 |issue= 1| pages=3-323–32| doi=10.1353/eal.2018.0001| s2cid=166005186}}</ref><ref name="Diss">{{cite thesis| last1= Mazzaferro| first1=Alexander McLean| url=https://rucore.libraries.rutgers.edu/rutgers-lib/55583/| title="No newe enterprize" (Doctoral dissertation)| date=2017| publisher=Rutgers University| doi= 10.7282/T38W3HFQ| access-date=19 February 2019}}</ref><ref name="Lepore">{{cite magazine| last1= Lepore| first1= Jill | date= 23 June 2014 | title=The Disruption Machine: What the gospel of innovation gets wrong | magazine=The New Yorker |url= https://www.newyorker.com/magazine/2014/06/23/the-disruption-machine | access-date=19 February 2019 }}</ref><ref name="Green">{{cite news| last1= Green |first1= Emma |date= 20 June 2013 | title=Innovation: The History of a Buzzword | publisher=The Atlantic | url= https://www.theatlantic.com/business/archive/2013/06/innovation-the-history-of-a-buzzword/277067/ | access-date=19 February 2019}}
</ref><ref>{{oed|innovation}}
</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| author1=Benoit Godin| title= The invention of technological innovation: languages, discourses and ideology in historical perspective| publisher=Edward Elgar Publishing| year=2019| isbn=9781789903348| oclc=1125747489}}</ref> [[Joseph Schumpeter]] (1883–1950), who contributed greatly to the study of [[innovation economics]], is seen as the one who made the term popular. 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. |title=Capitalism, Socialism, and Democracy |publisher=Routledge |year=1943 |isbn=9780415107624 |edition=6 |pages=81–84 |author-link=Joseph Schumpeter}}</ref> In [[commerce |business]] and in [[economics]], innovation can provide a catalyst for growth when [[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> Schumpeter's findings coincided with rapid advances in [[transportation]] and [[communications]] in the beginning of the 20th century, which had huge impacts for the economic concepts of [[factor endowment]]s and [[comparative advantage]] as new combinations of resources or production techniques constantly transform markets to satisfy consumer needs. Hence, innovative behaviour becomes relevant for economic success.<ref>{{Citation |last=Swedberg |first=Richard |title=Rebuilding Schumpeter’sSchumpeter's Theory of Entrepreneurship |date=2009-01-30 |url=http://dx.doi.org/10.4337/9781848446168.00018 |work=Marshall and Schumpeter on Evolution |access-date=2023-12-25 |publisher=Edward Elgar Publishing |doi=10.4337/9781848446168.00018 |isbn=978-1-84844-616-8}}</ref>
 
== Process of innovation ==
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== Goals and failures of innovation ==
Scholars have argued that the main purpose for innovation today is [[profit maximization]] and [[Valorisation|capital valorisation]].<ref>{{Cite journal |last=MacKenzie |first=Donald |date=1984 |title=Marx and the Machine |url=https://www.jstor.org/stable/3104202 |journal=Technology and Culture |volume=25 |issue=3 |pages=473–502 |doi=10.2307/3104202 |jstor=3104202 |s2cid=113106929 |issn=0040-165X}}</ref><ref>{{Cite journal |lastlast1=Robra |firstfirst1=Ben |last2=Pazaitis |first2=Alex |last3=Giotitsas |first3=Chris |last4=Pansera |first4=Mario |date=2023-07-01 |title=From creative destruction to convivial innovation - A post-growth perspective |url=https://www.sciencedirect.com/science/article/pii/S0166497223000718 |journal=Technovation |volume=125 |pages=102760 |doi=10.1016/j.technovation.2023.102760 |issn=0166-4972}}</ref> Consequently, programs of organizational innovation are typically tightly linked to organizational goals and growth objectives, to the [[business plan]], and to [[Market (economics)|market]] [[Competition (companies)|competitive positioning]]. Davila et al. (2006) note, "Companies cannot grow through cost reduction and reengineering alone... Innovation is the key element in providing aggressive top-line growth, and for increasing bottom-line results".<ref name="Making Innovation Work">Davila, T., Epstein, M. J., and Shelton, R. (2006). "Making Innovation Work: How to Manage It, Measure It, and Profit from It." Upper Saddle River: Wharton School Publishing.</ref> One survey across a large number of manufacturing and services organizations found that systematic programs of organizational innovation are most frequently driven by: improved [[quality (business)|quality]], creation of new [[Market (economics)|market]]s, extension of the [[product (business)|product]] range, reduced [[labor cost]]s, improved [[production process]]es, reduced materials cost, reduced [[environmental damage]], replacement of [[product (business)|product]]s/[[Service (economics)|services]], reduced [[energy]] consumption, and conformance to [[regulation]]s.<ref name="Making Innovation Work" />
 
Different goals are appropriate for different products, processes, and services. According to Andrea Vaona and Mario Pianta, some example goals of innovation could stem from two different types of technological strategies: ''technological competitiveness'' and ''active price competitiveness''. ''Technological competitiveness'' may have a tendency to be pursued by smaller firms and can be characterized as "efforts for market-oriented innovation, such as a strategy of market expansion and patenting activity."<ref name=":3">{{Cite journal|last1=Vaona|first1=Andrea|last2=Pianta|first2=Mario|date=March 2008|title=Firm Size and Innovation in European Manufacturing|url=http://link.springer.com/10.1007/s11187-006-9043-9|journal=Small Business Economics|language=en|volume=30|issue=3|pages=283–299|doi=10.1007/s11187-006-9043-9|issn=0921-898X|hdl=10419/3843|s2cid=153525567|hdl-access=free}}</ref> On the other hand, ''active price competitiveness'' is geared toward process innovations that lead to efficiency and flexibility, which tend to be pursued by large, established firms as they seek to expand their market foothold.<ref name=":3" /> Whether innovation goals are successfully achieved or otherwise depends greatly on the environment prevailing in the organization.<ref>{{cite journal|doi=10.1287/mnsc.35.5.597|title=Innovative and Noninnovative Small Firms: Types and Characteristics|journal=Management Science|volume=35|issue=5|pages=597–606|year=1989|last1=Khan|first1=Arshad M.|last2=Manopichetwattana|first2=V.}}</ref>
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=== Environmental and social innovation failures ===
Innovation is generally framed as an inherently positive force, delivering growth and prosperity for all, and is often deemed as both inevitable and unstoppable.<ref>{{Cite journal |lastlast1=Robra |firstfirst1=Ben |last2=Pazaitis |first2=Alex |last3=Giotitsas |first3=Chris |last4=Pansera |first4=Mario |date=2023-07-01 |title=From creative destruction to convivial innovation - A post-growth perspective |url=https://www.sciencedirect.com/science/article/pii/S0166497223000718 |journal=Technovation |volume=125 |pages=102760 |doi=10.1016/j.technovation.2023.102760 |issn=0166-4972}}</ref> In this sense, future innovations are often hailed as solutions to current problems, such as [[climate change]]. This business-as-usual approach would mean continued and increased [[globalization]] as well as quick innovation cycles which supposedly will maximize the competitiveness of processes, in the end leading to [[Eco-economic decoupling]] or [[Green growth]]. Yet, it is unclear whether innovative solutions will be capable of solving the climate crisis: According to Mario Giampietro and [[Silvio Funtowicz]] (2020), this positive framing of innovation "demonstrates [a] lack of understanding of the biophysical roots of the economic process and the seriousness of the sustainability crisis".<ref>{{Cite journal |lastlast1=Giampietro |firstfirst1=Mario |last2=Funtowicz |first2=Silvio O. |date=2020-07-01 |title=From elite folk science to the policy legend of the circular economy |url=https://www.sciencedirect.com/science/article/pii/S1462901120302033 |journal=Environmental Science & Policy |volume=109 |pages=64–72 |doi=10.1016/j.envsci.2020.04.012 |issn=1462-9011}}</ref> This is due to the fact that innovation can be understood in its specific historic and cultural context: The prevailing hegemonic view on innovation, as emphasized by Ben Robra et al. (2023), aligns closely with capitalist mode of production, shown by the mantra of 'innovate or die.'<ref name=":6">{{Cite journal |lastlast1=Robra |firstfirst1=Ben |last2=Pazaitis |first2=Alex |last3=Giotitsas |first3=Chris |last4=Pansera |first4=Mario |date=2023-07-01 |title=From creative destruction to convivial innovation - A post-growth perspective |url=https://www.sciencedirect.com/science/article/pii/S0166497223000718 |journal=Technovation |volume=125 |pages=102760 |doi=10.1016/j.technovation.2023.102760 |issn=0166-4972}}</ref> From this viewpoint, innovation is primarily driven by the imperative of capital accumulation, serving the sole purpose of increasing returns, neglecting societal needs such as a clean environment or [[social equality]] and in general the biophysical limits of our planet.<ref>{{Cite journal |lastlast1=Hoekstra |firstfirst1=Arjen Y. |last2=Wiedmann |first2=Thomas O. |date=2014-06-06 |title=Humanity’sHumanity's unsustainable environmental footprint |url=https://www.science.org/doi/10.1126/science.1248365 |journal=Science |language=en |volume=344 |issue=6188 |pages=1114–1117 |doi=10.1126/science.1248365 |pmid=24904155 |bibcode=2014Sci...344.1114H |s2cid=206553617 |issn=0036-8075}}</ref><ref>{{Cite journal |lastlast1=Rockström |firstfirst1=Johan |last2=Steffen |first2=Will |last3=Noone |first3=Kevin |last4=Persson |first4=Åsa |last5=Chapin |first5=F. Stuart |last6=Lambin |first6=Eric F. |last7=Lenton |first7=Timothy M. |last8=Scheffer |first8=Marten |last9=Folke |first9=Carl |last10=Schellnhuber |first10=Hans Joachim |last11=Nykvist |first11=Björn |last12=de Wit |first12=Cynthia A. |last13=Hughes |first13=Terry |last14=van der Leeuw |first14=Sander |last15=Rodhe |first15=Henning |date=September 2009-09 |title=A safe operating space for humanity |url=https://www.nature.com/articles/461472a |journal=Nature |language=en |volume=461 |issue=7263 |pages=472–475 |doi=10.1038/461472a |pmid=19779433 |bibcode=2009Natur.461..472R |issn=0028-0836}}</ref>
 
==Diffusion==
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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 }}</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|date=22 January 2020 |access-date=28 April 2020}}</ref>
 
==Government policies==
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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> [[Business incubator]]s were first 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>
{{Cite journal |last1=Rubin |first1=Tzameret H. |last2=Aas |first2=Tor Helge |last3=Stead |first3=Andrew |date=1 July 2015 |title=Knowledge flow in Technological Business Incubators: Evidence from Australia and Israel |journal=Technovation |volume=41-42 |pages=11-2411–24 |doi=10.1016/j.technovation.2015.03.002}}</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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