Part of a special section on innovation in this week's issue of The Economist
What is innovation? Although the term is often used to refer to new technology, many innovations are neither new nor involve new technology. The self-service concept of fast-food popularised by McDonald's, for instance, involved running a restaurant in a different way rather than making a technological breakthrough. However, innovation can involve plenty of clever gadgets and gizmos.
One way to arrive at a useful definition is to rule out what innovation is not. It is not invention. New products might be an important part of the process, but they are not the essence of it. These days much innovation happens in processes and services. Novelty of some sort does matter, although it might involve an existing idea from another industry or country.