Whilst innovation often relies on scientific research and new technological developments, it is much more than the sum of these parts. Innovation is concerned with the creative, economic exploitation of research, science and technology. Some have defined innovation as 'profitable change', others as 'economic exploitation of new ideas'. Innovation is about taking risks and managing change. Thus, it is clear that innovation applies to all aspects of economic activity and it must be active in every stage of economic life - markets, products, processes and services.
Innovation embraces scientific research and development and technology.
But it also includes training, marketing, design and quality, finance, logistics as well as the business management methods that mesh these various functions together efficiently. In this way, European support for innovation will continue to recognise the wide-ranging applicability of innovation and seek to support projects across all areas where economic benefits can be found. Lagging Regions Whilst innovation is vital in the 'traditional' economy, it is even more important as part of the response to the challenges posed by the 'new' economy. The new economy responds to globalisation and accelerated technological change including information and communications technologies and the Internet. This demands new kinds of policy responses that are more subtle and intangible than ever before.