In the first half of the 20th century, Joseph Schumpeter proposed 5 types of innovation. These were:
- The launch of a new product, or a newly differentiated product offering
- Applying new methods to manufacturing or selling of a product
- Opening a new market
- Acquiring new sources of supply (either
- New industry structure such as the creation or destruction of a monopoly (although there are now some disputes that this no longer counts as a type of innovation)
This is still one of the most referenced lists for types of innovation. However, there are a few other important ways to classify innovation that
Types of Ideas
Ideas fall on a scale that looks like this:
Depending on the type of innovation, the scale will be balanced differently.
Where do ideas come from?
Ideas can come from two sources – internal and external. Internally sourced ideas come from employees within an organization. Externally sourced ideas can come from customers, suppliers or subject matter experts. It’s easier to get value from internally sourced ideas because employees are naturally vested in helping to improve the organization they work at. However, there are notable examples of companies sourcing ideas externally as well.
Who is included in the innovation process?
Microsoft has a small innovation team that works on researching new ideas. Google also uses small
How long is the innovation process intended to last?
Sometimes, innovation needs to occur within a specific timeframe. Continuous innovation isn’t time constrained and allows an organization to seek ideas all the time. A great example of this is Toyota, who implements ideas from employees throughout the year.
What do you want to innovate?
This falls into Schumpeter’s list of 5 types of innovation, but you can break this down much further. For example, in this structure, they list 10 different types. We believe that specificity is important and so the more detailed you can be for your
Types of Innovation
At SoapBox, when we talk with customers about types of innovation, we look at all of these dimensions, types of ideas, where they come from, participants, duration of innovation, and the subject of innovation altogether. This dictates the right tools and approaches, and whether the platform will be a good fit or not.
Using some of these dimensions, here’s a breakdown of a few types of innovation that we see:
Incremental innovation focuses on
Here’s an example of how you can use the dimensions we talked about earlier to
The most distinguishing feature of Open Innovation is that it is sourced externally by the community or by customers. Many companies use open innovation to create new products but also to help improve their existing products. Typically, open innovation programs are time-bound, where the community can submit their idea within a certain period of time. There are ongoing Open Innovations programs, like P&G’s Open Innovation Program, where individuals can partner with P&G to bring their idea to life.
Frugal innovation focuses on ideas that make a greater impact with fewer resources, usually around removing parts of complex machinery so that a lower-budget version can be sold to developing countries. The size and impact of an idea in frugal innovation can range, but the essential premise is to cut out non-essential parts of more complex products to sell into developing companies. One example of a result from frugal innovation is Lifestraw, a straw that can make contaminated water drinkable.
Disruptive innovation involves ideas that could transform a society. Examples of this include the internet and electricity that have changed the way we operate in the society. It’s hard to say who or how long it lasts because disruptive innovation has such a huge impact on society. Generally, they are resource intensive, particularly in research and development standpoint, and it’s often the type of innovation most people think about when they hear the word innovation. Radical innovation, breakthrough innovation, and transformative innovation are other terms that describe the same type of innovation.
However you decide to build your innovation program, think about the different dimensions to categorize your innovation and whether you have more than one type of innovation you’re building a program around. Here are some questions to help you get started:
- Do I want big ideas or small ideas?
- Who is going to share their ideas? My employees or customers?
- What should the ideas be about?
- How long do I want to run an innovation program for?
Depending on your answers, you’ll need different tools and processes to successfully support your program.