Many managers and policy-makers have misconceptions about innovation that can lead to all kinds of mistakes being made. The first thing to say is that innovation is not invention. Invention is the creation of a new idea and its reduction to practice. Innovation is the commercialisation of inventions. Innovation is, furthermore, often mistaken for research and development.
Innovation is really about economically valuable novelty.
It is about new products, processes and services and all the scientific, technological, organisational, financial and business activities that produce them. Innovation is complex and risky. Huge amounts of money are invested in innovations, with companies like IBM sometimes betting the company in their belief in new products. Investments like this are risky because innovations fail more often than not. Worldwide, only one in ten new products succeed in the market.