We will now define innovation more rigorously by means of the production function previously introduced. This function describes the way in which quantity of product varies if quantities of factors vary. If, instead of quantities of factors, we vary the form of the function, we have an innovation. We will simply define innovation as the setting up of a new production function. This covers the case of a new commodity, as well as those of a new form of organization.
Innovation combines factors in a new way.
Schumpeter, however, does not seem to be so crystal clear on this matter. It consists in getting things done. For, on the one hand, it is much easier now than it has been in the past to do things that lie outside familiar routine - innovation itself is being reduced to routine. Technological progress is increasingly becoming the business of teams of trained specialists who turn out what is required and make it work in predictable ways. There is no necessary connection between the two functions.