Technological innovation: a resource-based view

# 1 Introducing innovation

We inhabit a world where there is widespread agreement that the history of technological and organisational innovation and change has been remarkable. Indeed, approaching this issue from entirely different ideological perspectives, Karl Marx in the 19th century and Joseph Schumpeter in the early to mid 20th century both recognised technological and organisational innovation as a fundamental feature of the ‘creative-destructive’ tendencies of capitalism, although the extent to which the costs of the destructive aspect of this phenomenon are considered acceptable is a subject that divides opinion to this day. As Godin (2008) notes, Schumpeter (1912, 1934) provides us with an early characterisation of innovation as any of five phenomena:

- the introduction of a new good
- the introduction of a new method of production
- the opening of a new market
- access to (‘conquest of’) new sources of raw materials or components
- or the introduction of new forms of organisation.

The term ‘innovation’ has since been extensively debated, and used in a wide range of ways. One study (Baregheh et al., 2009) identified 60 definitions of innovation in organisations alone. In part, at least, these differences are a result of the differing concerns of different academic disciplines, the perspectives of different stakeholders in the innovation process and the different contexts in which innovation is considered. Thus, for example, an economist may be concerned with the contribution of innovation to the performance of a national economy and so be interested in the generation of entirely new products or processes, while a social scientist may be concerned with how individuals decide whether or not to adopt an innovation, and therefore less interested in whether a product is new to an individual or organisation or not. Alternatively, managers may be concerned with how to prepare their organisation to generate innovations that are new to their industries and markets, or with how their organisation might most effectively adopt or configure innovations generated elsewhere to use within their own organisation. What the term ‘innovation’ means, then, appears to depend on who is using the term and the context in which it is used.

A contemporary definition widely used by governments and institutions, such as the Organisation for Economic Co-operation and Development (OECD) and the European Commission (EC), to inform innovation policy sets out four main types of innovation (OECD/Eurostat, 2005):

- Product innovation – a good or service that is new or significantly improved. This is perhaps what we think of most often when we think of an innovation.
- Process innovation – a new or significantly improved production or delivery method. Innovations in the way things are made can critically effect, for example, how widely accessible they are.
- Marketing innovation – a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing.
- Organisational innovation – a new organisational method in business practices, workplace organisation or external relations.

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