Innovation is a very broad term. From the smartphones we use to make phone calls to the COVID vaccine we received to gain viral immunity falls under the category of innovation. However, not all forms of innovation are tangible. In 1934, Joseph Schumpeter, a renowned Austrian economist who stressed the role of innovation in economic development, defined innovation as “new combinations of new or existing knowledge, resources, equipment, and other factors."
These new combinations of ideas and other resources need not be visible to outsiders (both consumers and investors). For example, a new process to manufacture an electric car or a novel process for manufacturing a complex vaccine is an innovation in every sense of the word. However, the customers buying the end product are unaware of the cutting edge innovations in the process which makes these products a reality.
I call these types of innovations as "Invisible Innovations" because the actual value or the patents are on the "process" which is not visible to the public. Everyone celebrates the "Visible Innovations" which is the vaccine in the vial or the high performance car on the road, but very few recognize that the product is only made possible because of the process.
In reality, the process is the product. As an organization, if you really want to gain a competitive advantage in the long run, you must pay equal or more attention on Invisible Innovations compared to the Visible Innovations.
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