Managing Research, Development, and Innovation: Managing the Unmanageable, Third Edition

12.1. DEFINING INNOVATION

The term innovation is derived from the Latin term innovatus, which means to renew or alter. While novelty and change are key, contemporary definitions emphasize application of new ideas often, but not always, in a commercial sense. Peter Drucker (2002, p. 96) defines innovation as "the effort to create purposeful, focused change in an enterprise's economic or social potential," and underscores compelling customer value, opportunity, and impact. In The Theory of Economic Development (1934), the twentieth-century economist Schumpeter delineated several avenues related to creating economic value, including:

• The introduction of a new good—that is, one with which consumers are not yet familiar—or of a new quality of a good ...