Innovations in business

Innovation is the successful application of a new idea: invention is the idea itself, innovation is the idea put to profitable use. A laboratory prototype nobody buys is an invention; the same idea sold to customers is an innovation. Types of innovation: product innovation (new or improved goods and services), process innovation (new or improved ways of making or delivering), marketing innovation (new packaging, pricing, placement or promotion) and organisational innovation (new structures, practices or business models). Worked example: a dairy firm that invents a longer-life milk process (process innovation), launches flavoured milk (product innovation), sells it in small affordable pouches (marketing innovation) and organises farmer collection through an app (organisational innovation) has innovated on all four fronts — and any one alone would have earned less.