Organisations, environmental management and innovation

# 1.6 Categories of innovation

So far, you have had an opportunity to reflect on some examples of innovation and explored some writing that suggests innovation is not simply a focus on technology, although much of the focus on innovation remains very centred on technology as innovation. You have also seen that some care is needed about who is judging innovation and over what timescale.

Returning to our dictionary definition, it is not always easy to distinguish whether something is completely new or has been simply altered. To help make the distinction clearer, innovation is often divided into three categories:

- Incremental innovation is focused on iteration and modification of existing technologies or processes, usually to improve efficiency or costs, or reduce use of materials. This type of innovation is still reliant on the same ‘model’ of practice or existing technology. An example might be improved fuel efficiency of an engine design.
- Disruptive innovation is still based on the existing technology, but changes how things are done and what is achieved as a result. An example might be a move from a diesel engine system to a hybrid engine system for cars.
- Radical innovation marks a break with previous technologies, processes, ideas and ways of doing things. Often referred to as ‘breakthrough’ in relation to technologies, radical innovation can also apply to organisations in the way they are restructured to increase efficiencies and improve use of resources. Examples of radical innovation might be designing a car that is completely recyclable or an organisation taking control of its supply chain to ensure environmental standards are met.

## Activity 8 Incremental, disruptive or radical?

Allow about 10 minutes

Bearing in mind these categorisations, from your perspective, do you consider a wholly electric car to be an example of incremental, disruptive or radical environmental management innovation?

Provide your answer...

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## Discussion

The technology for the engine is not new, in that electric engines have been in existence for decades. But it may be significantly improved, perhaps by enhancing the longevity of the battery and range of the car. In which case, it might be categorised as disruptive because it marks a shift away from traditional and even hybrid (petrol/electric) cars. But it is still a car. And while the engine system may reduce emissions at the point of use, it still requires materials for manufacturing and energy for use, requires roads to be built and maintained, and whatever engine technology is used contributes to traffic congestion problems – perhaps leading to more emissions from non-electric cars. In which case, the wholly electric car itself might be considered incremental innovation – it is just an ‘improvement’ on the existing model of private, car-based transport.

People with different perspectives will have differing views of what constitutes incremental, disruptive or radical innovation. You may have disagreed with the examples provided above for each category of innovation or with the answer to the activity. Your own perspectives, experiences and knowledge will shape how you categorise innovation. When trying to determine which category of innovation to assign to a product, process or idea, there are also other factors to consider.

Over time, a technology or process can move between the categories of innovation. For example, the way Google worked as a search engine was a radical innovation when first developed, but the organisation has since engaged in mostly incremental and occasionally disruptive innovation to make ongoing improvements to its performance as a search engine. However, you could argue it has engaged in radical innovation in the way it runs its server farms to reduce its energy use and emissions.

The categorisations above also do not distinguish between the innovation involved in developing a new product or process and the impact that an innovation has in use. In other words, incremental innovation may have a radical impact on the way things are done or a new technology. Conversely, a radical innovation may have incremental changes depending on the context.

Examples of the former might be the energy-efficient light bulb – a largely incremental innovation that has led to a radical change in lighting in domestic contexts in the UK following EU policy ending the sale of incandescent light bulbs. In this case, the EU policy might be considered the more radical innovation rather than the energy-saving light bulb itself.

Examples of the latter might include solar panels – a radical way of generating domestic electricity, but currently only having incremental impacts because of costs, energy pricing policies and time lag of adoption in the UK.

The different categories of innovation are often represented using ‘S’-curves.

OpenLearn - Organisations, environmental management and innovation
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