In 1911, the notable Austrian economist Joseph Schumpeter said that innovation is the industrial exploitation of inventions, their development and economic scope. Still valuable today, this definition clearly shows that while the invention is necessary in the innovation process, it is not the innovation.
Firstly, to become innovation, the invention must be put into action, where it must be more than an idea, model or prototype and exploited in an industrial method. Even industrial production is insufficient - the invention must be part of a larger plan where it is implemented and disseminated. Last but certainly not the least, the invention’s value must be significant enough and monetised as economic success to be deemed as innovation. This success cannot be measured by a company’s turnover, but rather, by generated profit, the key to economic survival.
Consequentially, it is crucial to distinguish three phases in the life of a product or service. The first phase, upstream, concerns its elaboration. The second and third phases, both downstream, are when the product launches on the market, attracts buyers, generates sales; then the pivotal moment when the number of consumers drastically increases so as to compensate the investments made. The juncture from the second and third phase is characteristically called “Moore’s chasm”, which is an essential step in any innovation process. Before this gap, the product or service is only what we call a “candidate for innovation” as it does not contribute to a company’s economic survival in any way. When the new offer crosses the chasm due to new clients generating more profits than investments, the “candidate for innovation” then rightly becomes an innovation.
Consequently, innovation is clearly uncertain as no one can predict when any product or service will cross the chasm. While the organisation will do its utmost to communicate, implement, and market its offer, clients are the determining factor turning an invention into an innovation.
With this uncertainty in mind, any innovation must first be seen as a failure. This unknown, uncertain gap makes it necessary for the company to focus on the upstream phase and development of ideas. The more inventions an organization produces, the more chances there are that one will evolve into an innovation. In other words, if an organisation only has one idea or invention, the risk of failure is certain.
To conclude, we can see that innovation and action cannot be separated. The role of innovators then, is to put into action the whole innovation process: crossing the chasm, overcoming obstacles and competition to drive success.
Prof. Xavier Pavie. Academic Director ESSEC Business School Asia Pacific. Director of iMagination center and research associate Université Paris-Nanterre. Latest books released: Innovation, Creativity and Imagination (WorldScientific 2018) and L’innovation à l’épreuve de la philosophie (PUF 2018).
Xavier Pavie is a Professor at ESSEC Business School, he is Director of the iMagination Center, Associate Academic Director Grande Ecole (MiM) - Singapore - and Research Associate at the IREPH (Research Institute in Philosophy). After spending nearly fifteen years in various organizations (Nestlé, Unilever, Club Méditerranée) in marketing and innovation roles, he joined ESSEC in 2008 as Director of the Institute for Strategic Innovation & Services. In 2014, he founded the iMagination Center whose activities are centered on imagination, innovation and transdisciplinarity. In 2015, iMagination Week received the Prize for Pedagogical Excellence. In 2017 iMagination week is recognized as one of the most innovative pedagogical method accross disciplines by AASCB and The Wharton - QS Stars Reimagine Education Awards. Xavier has published numerous books and articles in management and philosophy both academically and for a wider audience. He also regularly contributes to the Harvard Business Review, Les Echos and La Tribune. Xavier holds a Master in Management, a Ph.D. in Philosophy from Université Paris Ouest. He also holds a further teaching qualification -International Teachers Programme of HEC Paris.