TYPES OF INNOVATION

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According to the OECD Oslo Manual innovation "is the introduction of a new or significantly improved product (good or service), process, new marketing method or new organisational method, in the company's internal practices, workplace organisation or external relations".

This OECD Oslo Manual is a standard of reference for understanding innovation. It is a a guide for carrying out measurements and studies of scientific and technological activities which defines concepts and clarifies the activities considered as innovative.

The handbook defines these 4 main types of innovation:

Product innovation

It corresponds to the introduction of a new good or service, o significantly improved, in terms of their characteristics or in terms of their use. The improvement is achieved through the introduction of new technologies or new uses, improvements in materials or with the addition of new functions.

Process innovation

It is the introduction of a new o, significantly, improved distribution and production process involving significant changes in techniques, materials and/or software. It also includes the introduction of new or, significantly, improved process of service creation and delivery as well as in techniques, hardware and software used in ancillary support activities such as purchasing, accounting or maintenance.

Innovation in Marketing

It consists of using a marketing method not previously used in the company, which can consist of significant changes in design, packaging, positioning, etc. (creation of new sales channels such as the development of franchises, direct sales, modifications in the way the product is displayed or the sale of licences for use), promotion or pricing, always with the aim of increasing sales.

Innovation in organisation

Introduction of a new organisational methods, changes in company practices and procedures, changes in the workplace, changes in external relations. There is innovation in the formulation of new management strategies when the strategy is implemented using new software and new methods of collecting information to encourage cross-divisional sharing.

By definition, all innovation must include an element of novelty!!!! A innovation is new to the market when the company is the first to launch it in its market. An innovation is new for the whole world when the eThe company is the first to launch it in all markets and in all sectors of activity.

A company is considered "innovative" if it has introduced an innovation (new product or process). during the period considered in the survey.

Types of innovation, examples of how an entrepreneur can pursue innovation in his company:

1. Product or service innovation:
   Refers to the introduction of a new or significantly new good or service improved in terms of features or use. This involves the incorporation of new technologies, improvements in the materials used or the addition of new features. An entrepreneur can pursue this innovation by developing new products that meet the needs of the market needs or by improving existing products to differentiate yourself from the competition. For example, a mobile phone company can launch a new smartphone model with innovative features and functionalities.
2. Innovation of the production process:
   It consists of the introduction of a new or significantly improved distribution, production or service delivery process. This implies significant changes in the techniques, materials or software used. An entrepreneur can seek this innovation by optimising processes production, implement new technologies or improve the operational efficiency. For example, a car manufacturing company can adopt a new automated production process that reduces manufacturing times and improves vehicle quality.
3. Innovation in marketing:
   Refers to the use of new marketing methods or not previously used by the company. This may include changes in the design, packaging, positioning, promotion or pricing of products or serviceswith the aim of increasing sales. An entrepreneur can pursue this innovation by developing creative marketing strategiesexplore new distribution channels or use innovative promotion techniques. For exampleA clothing company can launch a viral marketing campaign on social media to promote its products in an innovative way.
4. Innovation in organisation:
   It involves the introduction of a new organisational methodchanges in company practices and procedures, changes in the workplace or in external relations. This innovation may include the adoption of new management strategies, the use of new software or the improvement of internal communication and collaboration.. An entrepreneur can pursue this innovation by implementing new forms of organisation and management that encourage the creativity, efficiency and adaptability. For example, a technology company can adopt a remote working model and use online collaboration tools to improve team flexibility and productivity.

Here is a list of 16 types of innovation you can consider:

1. Innovation in business models.
2. Innovation in revenue models.
3. Innovation in distribution channels.
4. Innovation in technology or hardware.
5. Innovation in software or applications.
6. Innovation in customer experience.
7. Innovation in packaging or presentation.
8. Supply chain innovation.
9. Innovation in inventory management.
10. Innovation in human resources practices.
11. Innovation in pricing strategies.
12. Innovation in customer service processes.
13. Innovation in data management and analysis.
14. Innovation in collaboration and teamwork.
15. Innovation in sustainability and social responsibility.
16. Innovation in security and data protection.

Each type of innovation has the potential to generate competitive advantages and boosting a company's growth. It is important that entrepreneurs evaluate carefully its industry, target market and available resources to identify which types of innovation are most relevant and can provide the impact on your business and strategic objectives.

In addition to the four main types of innovation mentioned above (product innovation, process innovation, marketing innovation and organisational innovation) there are other types of innovation that may also be relevant for companies. Some of them are:

1. Technological innovation: Refers to the application of technological advances or new technologies to develop improved products, processes or services. This may include the use of artificial intelligence, the Internet of Things, virtual reality, among others.
2. Social innovation: It focuses on creating innovative solutions to address social challenges or improve people's quality of life. This may include projects related to education, health, sustainability, social inclusion, among others.
3. Open innovation: It is based on collaboration with external actors, such as customers, suppliers, universities or startups, to generate ideas and co-create innovative solutions. Open innovation provides access to external knowledge, resources and perspectives that can boost the creativity and efficiency of innovation processes. See more(+)
4. Disruptive innovation: Occurs when a company introduces a radically new product, service or business model that breaks with existing market models. These innovations often have a significant impact on the industry and can displace established competitors. See more(+)
5. Incremental innovation: It refers to gradual and continuous improvements in existing products, processes or services. Unlike disruptive innovation, incremental innovation is based on gradual optimisation and refinement rather than radical changes. See more(+)

It is important to note that a company can opt for different types of innovation according to their strategic needs and objectives. Some companies may focus on the product innovation to introduce new offerings into the market, while others may focus on the process innovation to improve operational efficiency. The choice of innovation typology will depend on the situation y the specific goals of each company.