Define: Innovation

Business, Legal & Accounting Glossary

Definition: Innovation


Quick Summary of Innovation


The process of translating an idea or invention into a good or service that creates value or for which customers will pay.



What is the dictionary definition of Innovation?

Dictionary Definition


a creation (a new device or process) resulting from study and experimentation

  1. The act of innovating; the introduction of something new, in customs, rites, etc.
  2. A change effected by innovating; a change in customs;
  3. Something new, and contrary to established customs, manners, or rites.

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Full Definition of Innovation


To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products. In business, innovation often results when ideas are applied by the company in order to further satisfy the needs and expectations of the customers.

In a social context, innovation helps create new methods for alliance creation, joint venturing, flexible work hours, and the creation of buyers’ purchasing power. Innovations are divided into two broad categories:

  • Evolutionary innovations (continuous or dynamic evolutionary innovation) that are brought about by many incremental advances in technology or processes and
  • Revolutionary innovations (also known as discontinuous innovations) which are often disruptive and new.

Innovation is synonymous with risk-taking and organizations that create revolutionary products or technologies take on the greatest risk because they create new markets.

Imitators take less risk because they will start with an innovator’s product and make a more effective approach. Examples are IBM with its PC against Apple Computer, Compaq with its cheaper PC’s against IBM, and Dell with its still-cheaper clones against Compaq.


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Synonyms For Innovation


invention, novelty, change, alteration, creation


Cite Term


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https://payrollheaven.com/define/innovation/
Modern Language Association (MLA):
Innovation. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 05, 2020 https://payrollheaven.com/define/innovation/.
Chicago Manual of Style (CMS):
Innovation. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/innovation/ (accessed: April 05, 2020).
American Psychological Association (APA):
Innovation. PayrollHeaven.com. Retrieved April 05, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/innovation/

Definition Sources


Definitions for Innovation are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 2nd April, 2020