Introduction
Innovation in itself is a broad concept utilised in different disciplines and across multiple levels. The frequency of the utilisation of the term as well as its implication for economic, social and environmental purposes has caused confusion in what innovation means at present (Hall and Williams 2008). Even though the focus of this study is in particular on social innovation it is of importance to clarify the meaning of innovation in general for the purpose of this research and to provide a general understanding of the field.
A typical challenge in providing a concise overview of the literature is the identification of the core publications since there is no consensus on it across disciplines (Cooper 1998; Adams et al. 2006; Hall and Williams 2008; Hjalager 2010; Shafique 2013). The publications discussed here are chosen due to representing seminal ideas and their number of citations.
The attributes of innovation
Whilst the term innovation may not have explicitly been used, activities and processes associated with innovation are as old as humankind (Fagerberg and Verspagen 2009). However, it was not until the beginning of the 20th century before the Austrian American economist Joseph Schumpeter officially coined the term innovation. Since then a proliferation of research on innovation can be identified. Whilst innovation has been at the focus of attention to both practitioners and academics for more than a century, a general consensus on a single definition is still absent from the current literature (Wolfe 1994; Adams et al. 2006; Shafique 2013). Baregheh et al. (2009) posit the differences in perspectives across disciplines demands discipline-specific definitions. However, this also results in a variety of ontological and epistemological perspectives complicating the development of an all-encompassing definition of the complex and multidimensional term (Wolfe 1994). While gaining an understanding of innovation is of importance to this research, proving a definition of innovation is not at the focus of attention. Therefore, the following section solely discusses the most prominent definitions of innovation while the table presents an outline of alternative understandings, sorted by date and academic discipline.
The word innovation finds its origin in the Latin word innovat - renewed or altered - and from the verb innovare from in - into, and novare - make new (Oxford Dictionaries 2010) and is thus related to making something new (Weiermair 2006). This comes forward in the seminal definition of innovation by Schumpeter (1939, p.87) defining it
“as a new combination of means of production, that is, as a change in the factors of production (inputs) to produce products (outcomes)”
that continually interfere with the equilibrium (Nelson and Winter 1982). Novelty, newness and doing things different to achieve creative destruction (i.e. new production units replace the outdated ones) are what Schumpeter (1939) considered as essential to capitalism. However, Schumpeter (1939) also emphasised innovation does not equal invention and therefore a distinction should be made. Whereas invention refers to the first occurrence of the idea, innovation is concerned with the first attempt to put it into practise (Hjalager 1997). While invention and innovation can be closely linked, a considerable time span between the two in not uncommon (Rogers 2010). The work of Schumpeter on innovation has been revolutionary, and the Schumpeterian approach towards it is still widely used (Hjalager 2010; Shafique 2013). Even though numerous alternative definitions of the term are currently available, Baregheh et al. (2009), in an extensive literature review, illustrate new is an across disciplines agreed upon key distinguishing feature of innovation (Slappendel 1996). Thus, in its simplest form innovation relates to newness. A more compelling definition often used within the tourism discourse is provided by Kanter (1984, p.20) stating:
“Innovation refers to the process of bringing any new, problem solving idea into use. Ideas for reorganizing, cutting cost, putting in new budgetary systems improving communication or assembling products in teams are also innovations. Innovation is the generation, acceptance and implementation of new ideas, processes, products or services.”
While Kanter (1984) incorporates the newness indicator of innovation, she modifies the definition of Schumpeter (1939) by discussion innovation as a process that contains different stages. From an organisational perspective the much-quoted definition by Damanpour (1996, p.694) supports this view and introduces innovation as “a process that includes the generation, development, and implementation of new ideas or behaviors.” Further, also a closer look at the overview of definitions provided in the table indicates innovation is across disciplines defined as a process. Newness and process are thus two key distinguishing attributes of innovation (Baregheh et al. 2009). The questions what should be new and how the stages of the process are identified is further discussed below.
| Author (year) | Definition | Discipline |
|---|---|---|
| Thompson (1965) | Innovation is the generation, acceptance and implementation of new ideas, processes, products or services | Political Science |
| Knight (1967) | An innovation is the adoption of a change which is new to on organization and to the relevant environment | Organzational Studies |
| Drucker (1985) | Innovation is the act that endows resources with a new capacity to create wealth. | Management |
| Van de Ven (1986) | Innovation is defined as the development and implementation of new ideas by people who over time engage in transactions with others within an institutional order. | Management |
| West and Farr (1990) | Recently, innovation has been defined as the introduction and application, within a group, organization, or wider society, of processes, products, or procedures new to the relevant unit of adoption and intended to benefit the group, individual, or wider society | Psychology |
| OECD (1991) | Innovation is an iterative process initiated by the perception of a new market and/or new service opportunity for a technology based invention which leads to development, production, and marketing tasks striving for the commercial success of the invention. | |
| Damanpour (1996) | A process that includes the generation, development, and implementation of new ideas or behaviors. Further, innovation is conceived as a means of changing an organization, either as a responce to changes in the external environment or as a preemptive action to influence the environment. Hence innocation is here broadly defined to encompass a range of types, including new products or services, new process technologies, new organizational structures or administrative systems, or new plans or programs pertaining to organizational members. | Organizational Studies |
| Harkema (2003) | Innovation is a process wherein knowledge is acquired, shared and assimilated with the aim to create new knowledge. | Oranizational Studies |
| OECD (2005) | An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method inbusiness practices, workplace organisation or external relations. | |
| Plessis (2007) | Innovation as the creation of new knowledge and ideas to facilitate new business outcomes, aimed at improving internal business processes and structures and to create market driven products and services. Innovation encompasses both radical and incremental innovation. | Knowledge Management |
| Baregheh, Rowley and Sambrook (2009) | Innovation is the multi-stage process whereby organitations transform ideas into new/improved products, service or process, in order to advance, compete and differentiate themselves successfully in their marketplace. | Management & Organizational Studies |
| Shafique (2013) | Innovation essentially involves the creation of new knowledge based on existing knowledge | Strategic Management |
| Vaughan (2014) | At its heart, an idea or concept; fulfilled, it's the idea realized, the end result, an effected change meant to make something - or introduced something - better. Bettter could mean more efficient, more enjoyable, more appealing, more useful, more ..."wow". |
Source: Boes (2015, unpublished PhD)
Multidimensionality of innovation
Whilst a general consensus regarding the importance of innovation for growth and development can be identified (Schumpeter 1939; Porter 1990), an agreement on the typology of innovation is to date absent from the literature (Rowley et al. 2011). Still, differentiating between the types of innovation is essential to the development of theories of innovations (Damanpour 1987; Kelley and Littman 2006). Whereas a variety of publications discussing the typology of innovation can be identified, only the most essential frameworks and models are reviewed in the following sections.
Differentiating between four types Knight (1967, p.482) was one of the first to provide categorisations of innovation.
- Product or service innovations – focusing on the introduction of new products and services.
- Production-process innovation – concerned with changes in organisational production and operation; frequently initiated by technological developments.
- Organisational-structure innovation - concentrating on the introduction of changes in internal organisational structures or policies.
- People innovation – directly changing people within the organisation by either altering personnel or changing behaviour.
While this typology early on recognised four categories, the majority of the innovation studies between the 60’s and 80’s had a binary focus; the administrative/technological innovation combination (Evan 1966). Within this typology technological innovations were tangible, had a direct effect on the general outcome of the organisation and were directly noticeable by the relevant unit of adoption (i.e. the user). Due to the importance of the user, technological innovation was in general represented as a bottom-up innovation process (Daft 1978). On the other hand, administrative innovations were intabgible, commonly connected to internal organisational changes (OECD 2015a) and originated mostly at the top of the hierarchy from where they followed their way down along the organisational structure (Daft 1978).
In line with the tangible technological innovation, the product/process binary categorisation was formed by scholars such as Utterback and Abernathy (1975). Along the lines of Knight (1967) product innovation focussed on the development of new outcomes directly aimed towards the customers, whereas process innovation was concerned with new ways of production and development of products (Cooper 1998). Whilst administrative/technological and product/process innovations were aimed at identifying different outcomes, the concept of radical and incremental innovation was implemented to classify the degree of newness (Rowley et al. 2011). Dewar and Dutton (1986, p.1423) differentiated between to two by stating
“the labels radical and incremental is the degree of novel technological process content embodied in the innovation and hence, the degree of new knowledge embedded in the innovation”.
Where incremental innovation is connected to doing things better and improvement (Ettlie et al. 1984), radical innovation implies discontinuity with the past (Garcia and Calantone 2002) and doing what has not been done before (Norman and Verganti 2014). While the radical/incremental dichotomy has been of importance to the adoption of innovation literature (Dewar and Dutton 1986; Rogers 2010), it has also been perceived as an attribute of innovation rather than a particular type (Rowley et al. 2011). Administrative/technological and product/process innovation represent types of innovation whereas incremental/radical represent the level of differentiation within the typology. Still, distinquishing between the two is vital since both ask for distinct methods (Ettlie et al. 1984; Norman and Verganti 2014). Whilst radical innovation is often sought for, incremental innovation is mostly achieved (Hjalager 2010). The difficulty in proceeding radical innovation has been connected to the requirement for a combination of internal and external heterogeneous knowledge perceived as a challenging practise in organisations (Slater et al. 2014).
While the dualities of the innovation types results in the multidimensionality of the field (Cooper 1998), contemporary studies increasingly focus on broader categorisations such as for instance the one proposed by Knight (1967). A generally accepted categorisation in line with Knight (1967) is provided by the OECD (2015a) differentiating between product, process, marketing and organisational innovation. In a similar vein, Francis and Bessant (2005, p.172) posit the “4Ps” including products, processes, positioning and paradigm. From a tourism perspective Hjalager (2010) slightly modifies the typology and proposes product/service, process, managerial, marketing and organisational innovations. Even though different disciplines provide diverse typologies of innovation, a general consensus on the understanding of the different categories can be identified. Overall, the majority of the publications agree on the differentiation between product and/or service, and process innovation (Baregheh et al. 2009; Rowley et al. 2011; OECD 2015a). Further, whilst the term might differ across publications, internal managerial innovations and external institutional innovations are recognised by different scholars (Schumpeter 1934; Francis and Bessant 2005; Hjalager 2010). Due to its relevance to the tourism context the typology developed by Hjalager (2010) provides the foundation for this research.
However, the typology of innovation does not consist of tight categories and have rather fuzzy boundaries (Damanpour 1996). Additionally, they are neither alternatives since multiple innovations can be pursued at the same time (Francis and Bessant 2005). Frequently, the outcome is a combination of different innovations (Hjalager 2015) or are administrative innovations effecting technological innovation (Knight 1967; Damanpour 1987; Francis and Bessant 2005). Still, in tourism the typology of innovation presented by Hjalager (2010) provides a structure to explore different innovation and examine their opportunities.
Product or service innovation
New product or service developments are the most prominent options for innovation. Product and/or service innovation generally refers to
“changes directly observed by the customer and regarded as new; either in the sense of never seen before, or new to the particular enterprise or destination” (Hjalager 2010, p.2).
Over a long period of time innovation research was greatly influenced by the manufacturing industry reflecting the Schumpetarian notion that product innovation was the main driver for economic growth (Hall and Williams 2008). Similar, identifying technology as a driver of change has increased the emphasis on a goods-dominated innovation process (Vargo and Lusch 2004). However, a shift can be detected where innovation research has recently increasingly focussed on service innovation (Maglio and Spohrer 2008; Lusch and Nambisan 2015). This has been of particular interest to the tourism industry generally recognised as a service industry (Leiper 2003). While product innovations such as the car or the mobile phone have transformed the tourism industry, they are externally developed innovations solely applied by tourism practitioners (Hall and Williams 2008; Hjalager 2015). Many digital technological innovations are typically developed outside of tourism (Buhalis and Law 2008). Still, their implementation could result in service innovations. All in all, product and service innovations are typically directly noticed by the relevant unit of adoption and hold the potential to influence the purchase decision (Schumpeter 1939; Hjalager 2010).
Process innovation
According to the OECD (2015a) process innovation can be defined as
“a new or significantly improved production or delivery method. This includes significant changes in techniques equipment and/or software.”
Hence, process innovations are mainly related to enhancing efficiency and productivity of backstage initiatives (Hjalager 2010). In order to enhance processes, ICT in particular has been the backbone for innovation within this category. Especially within tourism process innovation has gained significant attention (Buhalis and Law 2008), oftentimes enabled by externally developed digital technology innovations (Hjalager 2015). However, as previously discussed different types of innovation can be closely connected. Especially in the case of tourism a prominent example is the impact of the Internet, a radical innovation in itself, on for instance radical innovation regarding information dissemination processes in tourism (Hjalager 2015). Consequently, scholars often connect product to process innovation since one frequently impacts the other (Francis and Bessant 2005).
Managerial innovation
Whereas Hjalager (2010) makes a distinction between managerial and institutional innovations, the OECD (2015a) prefers referring to organisational innovations as a combination of the previous two. In comparison to institutional innovation, managerial innovations have an endogenous nature. They commonly relate to a change in internal practises such as empowerment and inter-organisational collaboration (Knight 1967). Further, managerial innovations could also be connected to the organisation of internal knowledge transfer or workplace satisfaction (Hjalager 2015). One particular managerial innovation in the tourism industry is the provision of internal eduction, traineeships and employee development programmes in for instance hotels (Goldstein 2003).
Marketing innovation
Marketing innovations typically relate to changes in marketing methods (Schumpeter 1934; Hjalager 2010). According to the OECD (2015a) this innovation is concerned with
“a new marketing method involving significant changed in product design or packaging, product placement, product promotion or pricing.”
Over the last decades marketing innovations have been significantly influenced by the development of the Internet, Web 2.0, the semantic web, as well as search engines such as Google (Hall and Williams 2008; Hjalager 2015). Apart from the digital marketing revolution, increasingly the marketing of tourism destinations is interlinked with the marketing of other products such as food and beverages (Hjalager 2010). Also journalists reporting in relation to specific events are integrated in subtle marketing campaigns for tourism destinations.
Institutional innovation
In comparison to managerial innovation, institutional innovation is focussed around the development and change in external relationships (OECD 2015a). Partnerships, alliances, the development of clusters and the shift towards open innovation are examples of institutional innovations (Porter 1990; Baron 2013). Especially with developments such as open access, open innovation and open data people are increasingly empowered to participate in innovation processes (Chesbrough 2003). Also companies and organisations have come to embrace the collective intelligence of people and are increasingly enabling environments where collaborations and cooperation are empowered (Galanakis 2006). Creating such ecosystems where heterogeneous actors can come together to co-create innovations and value for all, are a particular contemporary example of institutional innovation (Hjalager 2010). However, also institutional innovations such as EU transnational cooperation and airline deregulation have had significant implications for the tourism industry (Hjalager 2015).
Final thought
While it is of importance to understand newness can be connected to different innovation categories (Damanpour 1987; Francis and Bessant 2005), it is also of prominence to comprehend the essence of innovation. Whereas innovation concentrates on the process of creating something
“that is perceived as new by an individual or other unit of adoption” (Rogers 2010, p.10)
it is the created and added value of the particular innovation which is at the centre of attention (Vargo and Lusch 2008; Vargo et al. 2008), whilst newness should be reflected in the innovation at hand, it is the new value of this that is focal to innovation. Hence, innovation may be perceived as a process where new value is created and embodied in the various categories of innovation (Dewar and Dutton 1986). However, while innovations may embody value the added value is always determined by the beneficiary in the use context and thus subjective to every individual unit of adoption (Vargo and Lusch 2008). Comprehending value creation is thus a complex concept.
Innovation
Formele omschrijving
Critical discussion of the literature on innovation. Extracted from the chapter on social innovation of the unpublished PhD from Kim Boes. Fields: Business, technology, tourism, management
Schema: ZHDSM scheme,
Context: ZHDSM context