Innovation is the practical application of new ideas that aim to improve existing practices or prevent their disruption, covering new products, services, or different other areas that produce new solutions.

Whether you come up with ideas yourself or want to apply existing ideas to your company does not prevent it from being innovation. The only thing to know is that innovation should not be done in the short term, and it must be built on solid foundations to survive. Therefore, you should not forget in which area innovation will occur here and you should proceed by accurately identifying which of these areas is suitable for you.

What Are the Types of Innovation?

Innovation can take different forms and results. While the human mind often confines the notion of innovation to the emergence of a new idea, it is actually not so. Innovation varies according to situation and context. The types of innovation can be listed as follows;

• Incremental Innovation:

One of the most common forms of innovation that we can observe is incremental innovation. It is done by utilizing existing technologies in an existing market. The aim is to improve the existing product by adding new features, design changes, etc.

• Disruptive Innovation:

Disruptive innovation is often associated with the application of new technologies, processes, or disruptive business models to existing industries. Sometimes new technologies and business models may appear to be inferior compared to existing solutions, especially at the outset, but after some renovations, they can dominate the market due to reasons like efficiency or the breadth of space to be used.

• Architectural Innovation:

Architectural innovation is the type of innovation we currently see in many technology giants such as Amazon and Google. It is applied to a different market by taking expert technologies and capabilities in the field. In this way, new markets can be opened, increasing the existing customer population.

• Radical Innovation:

Most people's definition of innovation is actually radical innovation. Radical innovation emphasizes novelty in every area, from its customer to the product. It can also be exemplified as a model that opens the market by starting from scratch.

When Did Innovation Emerge?

Innovation plays a key role in entrepreneurship and economic development. Economist Joseph Schumpeter introduced innovation in 1942 as the theory of "creative destruction." The main reason he called it creative destruction is because it plays a key role in the market for many years throughout a process. Every innovation made plays a significant role in the situation in the market. Although innovation emerged as a theory in 1942, we can observe innovation from the earliest days of human history to today and even into our future. Knowing the existence of pebbles allows for innovations such as using these stones not just for attack but for producing fire; subsequently using fire for both protection and cooking can be seen as the first example of innovation.

What Should Be Considered When Innovating?

• Cost: New technology, specialized employees, and major changes in your business identity can be an extremely costly venture, and as increased profit is not guaranteed, it can be risky.

• Planning: Innovation takes time, and the time you spend for innovation is time not spent focusing on your existing products, marketing, and sales.

• Being Consistent: Generating innovative ideas can be exciting, but if businesses constantly make major innovations, they may never find a consistent identity or market, and it will be difficult for customers, investors, and employees to keep up with the changes.

Why Is Innovation Important?

Innovation is often necessary for companies to adapt to change and overcome these challenges. It fosters growth. Stagnation can be extremely harmful to your business. Achieving corporate and economic growth through innovation is key to surviving in today's highly competitive world.

What Does Innovation Do?

As a concept, innovation refers to the process that an individual or organization undertakes to conceptualize brand new products, processes, and ideas or to approach existing products, processes, and ideas in new ways. In practice, as in the concept, it helps the individual or organization gain market dominance by developing new products or existing ones.

How Is Innovation Done?

Innovation is the process by which an area, product, or service is renewed and updated by implementing new processes, introducing new techniques, or creating successful ideas to generate new value. Value creation is a defining feature of innovation. Those who want to innovate should know their products well, should calculate how much the products can be improved, and based on this calculation, should determine in advance how they will present the product to the market. Only in this way can successful innovation be achieved.

How Is Innovation Developed?

The process after innovation is about ensuring the long-term sustainability of the innovation made. If you expect a long-term product, you may need to innovate on the innovation made. There are five stages you should follow for this purpose:

• Set goals and a strategic approach for innovation.

• Analyze customers and competitors in the market.

• Define what you value as a business.

• Assess and develop your core competencies.

• Establish your innovation techniques and systems.

How Does Innovation Provide a Competitive Advantage?

A business that has innovated produces higher quality and functionally different products than those that have not. This increases competitive power. Since the differences will encourage customers to choose, newer and more advanced products will make it easier to surpass other businesses. Thus, empowered businesses secure the leading position in the market and become the first stop for new customers.

How Is Innovation Measured?

To measure your innovation value, you need to examine and process the initiative in three stages. These are the novelty of the product, the innovation rate, and the degree of novelty. Once determined, you can measure your innovation rate and value with the following processes.

• Product Novelty:

Innovation rate = share of innovations in revenue/total revenue * 100.

• Innovation Rate:

Innovation rate = number of innovations / total number of products * 100

• Degree of Novelty:

Degree of novelty = degree of innovation of the purpose-tool combination.

You should remember that the numbers above and the resulting figures have a narrow meaning. What is important here is not the numbers but the precise analysis of the product range. If you analyze the product correctly, it will contribute significantly to you in terms of market strategy. The path of the correctly analyzed product is clear.

However, the practical application of these key figures is not that easy: Because, as previously stated, the variables require precise and consistent definitions so that the formulas provide meaningful figures for your company.

In What Areas Is Innovation Used?

Innovation can be found in almost every area of life. The main reason for this is that everything in life is open to improvement.

• Product and Product Performance Innovation:

If you are a business owner producing goods, you create an innovation by improving the performance of your products. Going beyond products produced by everyone and selling different products also falls under product innovation.

• Technology Innovation:

New technologies have become the basis of many other innovations. While technology itself is an innovation, many other innovations have been made in various areas related to technology.

• Business Model Innovation:

Most of the world's most successful companies have renewed their business models. Businesses that continuously renew rather than remain fixed can engage a larger customer base and sustain their existence in the business world for a longer time.

• Organizational Innovation:

Also known as disruptive innovation, organizational innovation refers to the use of existing resources in different ways. For example, creating a clothing store using the same raw materials while producing essential food commodities is one of the areas where this innovation is applied.

• Marketing/Sales - New Channel Innovation:

New methods must be found to attract and retain customers' attention. This requires either innovative marketing/sales concepts to be used or new channels to be utilized for customer acquisition/sales. Such innovations are more frequently used in commercial transactions where sales and purchases are made.

• Internet - Network Innovation:

It may be possible to create additional value by connecting different groups and stakeholders. This type of innovation is very common due to the use of BIT services.

• Customer Engagement/Retention:

Innovative concepts that aim to enhance customer engagement and sustain retention. The goal is to have innovative models to keep customers "locked" or engaged.

Which Types of Innovation Are Not Included in the Oslo Manual?

The types of innovation have been created in various ways by consulting the opinions of certain individuals in light of specific sources. In the Oslo Manual, formed by the joint decisions of the OECD and the European Union, several types of innovation can be observed. The types of innovation included in Oslo are product innovations, process innovations, marketing innovations, and organizational innovations. Other initiatives or innovations that do not cover these topics are not included in the Oslo Manual.

What Are Common Mistakes Made in Innovation?

As with everything in life, there are certain mistakes we can make in innovation processes. Knowing these in advance will allow you not only to take precautions while applying innovation but also to deal with possible mistakes quickly. These can be listed as follows;

• Underestimating what is needed in terms of time and money,

• Resource scarcity,

• Weak innovation processes,

• Prioritizing short-term results,

• Balance,

• Inadequate information,

• Not fully evaluating ideas before making decisions,

• Interest,

• Only valuing specific opinions,

• Lacking a process to track and develop innovative ideas.

What Are Examples of Innovation?

Globally, the evolving and developing examples of innovation in various sectors provide us with many ideas about best practices to go through a successful adaptation process. For instance, Netflix, as a business model innovation that could inspire people, transforms the beloved series, films, documentaries, or television shows into an online platform without having to physically rent or incur the cost. Another notable example worldwide is the Ford Company, which is one of the most prominent examples of process innovation. The realization of its first mass production with a moving line that optimizes the assembly time required for a single vehicle is a revolutionary example of process innovation. McDonald's, which has a flexible organizational chart where employees at all levels can come up with new ideas, can be an example of organizational innovation.

One other innovation that we all have in our lives is the "E-Government" application provided by the Republic of Turkey to its citizens. With this application, everyone can carry out paperwork much faster than before and bureaucratic processes can be resolved much more quickly. This is, essentially, a very good example of service innovation.

What Is Innovation Management?

Innovation management, or otherwise known as newness management, means the systematic support of innovations in businesses. This process includes planning, organizing, controlling, and management stages. It aims to embed the innovation process or culture into an organization and encourages creativity within the organization. Speaking of the stages of the process: Finding ideas, identifying those that can provide benefits and be feasible, designing and project planning, prototyping and testing it, and finally fully implementing it. For all these steps, the idea is as important as the technology. Additionally, we can say that innovation is a continuous learning process. It is essential that all these components are gathered around a common goal, and that market and industry conditions are also well studied.

What Is Marketing Innovation?

Marketing innovation refers to the renewal of a product or its packaging with different designs, the use of various marketing techniques, or the improvement of existing approaches. Marketing innovation encompasses all innovation management activities that will support the success of new products and services in the market. Considering that the main task and mission of innovation is to succeed in the market, it is evident that marketing innovation holds a very important position throughout the innovation process. Although it can be the same with the product or service axis, how it is presented to the consumer can vary greatly. To give an example; consider a baby shampoo bottle. When washing a baby or child, every second becomes crucial because the child, due to their age, will not remain still, and holding the shampoo with one hand and opening the cap with two to pour can become a problem. For this reason, baby shampoos are presented to consumers in pump bottles.

What Is Service Innovation?

Service innovation refers to introducing an unprecedented approach to a service or significantly altering an existing service and preparing it for presentation. Service innovation is a type of innovation that involves creating and promoting new services for consumers, or in other words, customers. Service innovation starts with innovations related to services within the context of customer experience. The innovations taking place in this area enhance the features of your product or service by facilitating its use, emphasizing functionality that people often forget, or correcting common issues. Examples of service innovation could include:
• Ordering food online
• Delivering groceries to the front door
• Broadcasting TV programs on public buses

Examples of Product Innovation

Product innovation relates to improving what you own. You receive feedback from customers and transform it into a better product. Examples of product innovation may include;
• A mug that does not make a mess when it drips,
• A chips package designed to radically change the conventional packaging perception currently found in the market. It is also designed to be easily opened and served.
• Public bank seats in rainy seasons like winter and spring where people often cannot sit outside. An excellent innovation example can emerge at this point. With arms that can be placed on the corners of the banks, the space for sitting can be turned to the reverse, allowing you to sit on the dry side whenever you want.
• A smart wallet designed and technologically developed to combat forgetfulness. Additionally, it has GPS functionality that lets you easily locate it wherever you forget it or when it gets stolen. Even and especially this wallet, designed to be compatible with smartphones, can be wirelessly connected.

Is Every Invention Innovation?

No, not every invention is innovation. An invention is the discovery of something new or the improvement of something existing. However, innovation refers to the industrial or commercial use of inventions. An invention can be a part of innovation, but innovation requires many factors to work together, such as marketing, distribution, financing, and operations operating cohesively.

Who Starts Innovation?

Innovation can be initiated by anyone. Innovation can result from an individual’s idea or a company’s quest to improve its product or service, or it can also be initiated by a research and development team. What is important at this point is that innovation occurs in the right environment, where opportunities for sharing and developing ideas are available. As mentioned, innovation can be initiated by everyone and should be encouraged.

Does Innovation Generate Profit?

Yes, innovation can potentially generate profit. Innovative products, services, or business methods can provide products that better meet customer needs and offer advantages over competitors. This can lead to increased sales and profitability. Additionally, innovation can also provide other benefits, such as environmental, social, or intellectual property protection, which can help make companies more appealing in international markets and among customers' preferences. However, not every innovation may succeed, and not every innovation may yield profit. The right strategy and investment must be made for successful innovation.

What Are the 5 Stages of Innovation?

The 5 stages of innovation are as follows:
• Idea Generation: Finding or discovering an interesting and useful idea.
• Research and Development: Investigating the feasibility, market potential, and potential outcomes of the idea.
• Prototyping: Making the first application of the idea and testing it.
• Market Research: Understanding whether the product meets customers' needs and expectations and evaluating the opportunity to introduce the product to the market.
• Product Launch: Making all necessary activities to introduce the product to the market and reach customers and monitoring the product’s profitability and performance.

These stages outline the general structure of the innovation process, but they may vary in each case and may require additional steps or a different sequence. What is important is the correct and effective management of the innovation process.

Examples of Product Innovation

Product innovation is an innovative process related to improving the functionality, quality, usability, or design of a product. Here are a few examples of product innovation:
Apple iPhone: Apple made a significant innovation in the smartphone industry with the iPhone by using touch screen technology, which greatly enhanced the user experience.
• Tesla Electric Vehicles: Tesla began producing electric vehicles, carrying out a major innovation in the automotive industry and becoming a pioneer in environmentally friendly vehicles.
• Dyson Vacuums: Dyson began producing vacuum cleaners that use a suction-based system instead of traditional bags.
• Nest Smart Thermostat: Nest helps improve home energy efficiency with its smart thermostats while allowing users to control them easily.
• Airbnb Lodging: Airbnb changed the travel experience by offering accommodation options in many different places and created a significant innovation in the tourism industry.
• Amazon Echo: Amazon enabled users to control devices in their homes, listen to music, and perform other actions with voice commands through Echo devices.
• Nike Shoes: Nike has helped users have a more comfortable and performance-oriented shoe experience by incorporating air cushions, special rubber soles, and other technologies into its shoes.
These examples illustrate how products can be improved through product innovation. Innovation can provide a significant competitive advantage in various industries and businesses and enhance customer experience by providing better products.

Examples of Service Innovation

Service innovation involves adopting an innovative approach to enhance a business's customer experience, service quality, and efficiency. Here are a few examples of service innovation:
• Uber: Uber created a significant innovation in the taxi sector as a mobile application that facilitates the meeting of drivers and passengers.
• Netflix: Netflix revolutionized the TV and film viewing experience as an online video streaming platform.
• Starbucks Mobile App: Starbucks allows customers to order and pay for coffee using mobile apps, increasing customer satisfaction.
• Amazon Prime: Amazon increased customer loyalty by offering fast and free deliveries, movie, and music services with its Prime subscription.
• Disney+ Streaming Platform: Disney made it easier for children to reach their favorite Disney characters and watch new programs as an online video streaming platform.
• Spotify: Spotify revolutionized music listening habits and the music industry by changing the music listening experience.
• Airbnb Experiences: Airbnb created an innovation in the travel industry by offering unique experiences provided by local people to customers visiting touristic locations.

These examples provide an idea of how service innovation can change customer experience. Innovation can enhance customer satisfaction in the service sector, increase business efficiency, profitability, and provide a competitive advantage in the industry.

What Is Organizational Innovation?

Organizational innovation means developing and changing a business’s internal structure, operations, and management systems by adopting an innovative approach. These innovations are carried out to improve the performance of the business, increase efficiency, reduce costs, provide competitive advantage, and enhance customer satisfaction.

Organizational innovation involves the process of renewing the internal processes, management structure, business models, workflow, human resource management, marketing and sales strategies, technology use, and business strategy of the organization. In this process, businesses innovate by changing conventional ways of doing business, adopting new ideas and approaches to enhance efficiency and competitive advantage. For example, a business may use robotic technology in the production process to increase efficiency and reduce costs. Or, to enhance customer satisfaction, it may offer mobile applications and online customer support in post-sales services. These are examples of organizational innovation.

Organizational innovation helps businesses transform and remain competitive. Innovation can assist businesses in better serving customers and enhancing their performance.

Examples of Organizational Innovation

Organizational innovation means developing and changing a business’s internal structure, operations, and management systems by adopting an innovative approach. Here are examples of organizational innovation:
• Management Systems: Innovating management systems within a business can help the business achieve its strategic goals. For instance, renewing the systems used to measure business performance can increase efficiency. Also, creating an efficient and automated decision-making process by using digital technologies can enhance business performance.
• Business Model Renewal: Renewing the business model can help the business enter different and new markets and achieve a competitive advantage. For instance, a business can change its marketing strategies to offer customized products based on customer needs.
• Human Resource Management: Human resource management is an important area in terms of organizational innovation. Businesses can enhance the performance of employees, offer training and development programs, and improve employee motivation by innovating in human resource management processes.
• Technology: Technological innovation is another area businesses can use to increase their efficiency and productivity. Businesses can enhance efficiency by using robotic technology, artificial intelligence, digitization, and automation in their production processes.
• Communication and Collaboration: By innovating internal communication and collaboration processes, businesses can ensure effective communication and collaboration among employees. Businesses can utilize digital platforms and software applications to make collaboration processes more efficient.
These examples are just a few areas where you can implement organizational innovation. You can innovate in different areas according to your business's needs and goals.

What Is Business Model Innovation?

Business model innovation refers to innovative changes made by a business to improve its existing business model or create an entirely new one. Business model innovation enables a business to achieve a competitive advantage by changing key elements such as its target audience, revenue streams, value proposition, distribution channels, customer relationships, partners, and cost structure.

Business model innovation can assist a business in transitioning from existing markets to new ones or product and service categories, offering a different value proposition to its customers or targeting different customer groups. Business model innovation can also enable a business to create a more competitive pricing strategy by reducing costs in the production process. Business model innovation encompasses various methods that a business can use to achieve its strategic objectives, including the use of technologies such as digitalization, artificial intelligence, data analysis, platform economy, and sharing economy.

Business model innovation is essential for the success of a business since businesses must renew themselves when their goals and customer needs change. Business model innovation enables businesses to adapt to continuously changing conditions and achieve sustainable competitive advantage for future success.

What Is Innovation Management?

Innovation management refers to the strategies, tools, and techniques used to manage the innovation process of a business. Innovation management helps a business develop, implement, and manage innovative ideas, processes, and products. Innovation management is vital for the future success of a business because businesses need to be innovative to compete and be market leaders.

Innovation management involves the following key elements:
• Innovation Strategy: It defines main elements such as innovation objectives, target audiences, revenue streams, value propositions, distribution channels, customer relationships, partners, and cost structures to help the business achieve its future goals.
• Innovation Process: The innovation process includes the stages of developing, testing, and implementing ideas, products, and processes. This process is crucial for the success of innovation.
• Innovation Culture: The innovation culture encourages employees within the business to share, support, and implement innovative ideas. The innovation culture is a critical factor for the future success of the business.
• Innovation Financing: Innovation financing includes the strategies and resources used to meet the financial needs of the business's innovation process. Innovation financing is important for the business to secure the resources needed for innovation projects.
• Innovation Management Tools: These are the tools and techniques that help manage the innovation process effectively. These tools include innovation management software used for collecting, evaluating, and developing ideas or tools for tracking and reporting the innovation process.

Innovation management helps a business to meet customer needs by offering new products and services and strengthens its position in the market.