It struck me recently that there's a lot of overlap between what I think of as "invention", "innovation" and entrepreneurship. I think many people confuse these terms, so I'd like to compare and contrast them, at least as I see them. This came about as a result of the Business Innovation Factory conversations - a great program run by the folks in Rhode Island.
I am interested in trying to replicate some of what they are doing in Rhode Island here in North Carolina, and want to bring together the state, local universities, large companies and an organization for entrepreneurs and startups called the "CED - Council for Enterpreneurial Development". Talking with some friends, it became clear that they thought the CED was completely responsible for innovation in the area, since many inventions are commercialized by entrepreneurs, which many people think of as "innovation".
Well, I'll stipulate that entrepreneurs are part of the innovation ecosphere, but just a part.
Let's get a definition of innovation out on the table. We like to say that innovation is PEOPLE PUTTING IDEAS INTO VALUABLE ACTION. This means, frankly, that any organization or person can be innovative. More to the point, it means that every organization, private or public, small or large, is capable of innovation.
Invention, on the other hand, is about creating something completely new. The US Patent office defines an invention as: "a new, useful process, machine, improvement, etc., that did not exist previously and that is recognized as the product of some unique intuition or genius". There are several differences in my mind between innovations and inventions. An invention can lead to an innovation, but many inventions are often created and then placed on a shelf. IBM is full of patents and inventions that never see the light of day. Something invented but not put into practical use is NOT an innovation. Most inventions are meant to create a dramatic change in the status quo. Innovations, on the other hand, can reflect small, incremental changes in a product or service, or disruptive changes in a market. Finally, most people think of inventions as created by scientists in lab coats who work independently. Few inventors are "serial" inventors. Innovation, on the other hand, is created by many people working together, and it seems possible to be sustainably innovative.
Where do entrepreneurs fit into the equation? Many entrepreneurs are attempting to commercialize one big idea. Entrepreneurs exist to dramatically change a market, so they are usually trying to introduce a disruptive innovation to the market. However, innovation does not belong just to the entrepreneur. Large firms, universities, and governments can be innovative; in fact, if these other organizations aren't innovative they'll become irrelevant. Entrepreneurs want to change the status quo, and are sometimes inventors or are capitalizing on someone else's invention, but they don't "own" innovation.
I guess I'd argue that innovation is relevant and important to firms of any size, governments, educational organizations and many other organizations. Some companies and people create inventions, but unless those inventions are brought to profitable use, they aren't valuable and they aren't innovative. Entrepreneurs create new, disruptive products and services and are therefore innovative, but are just part of the entire innovation ecosphere. In fact many entrepreneurs, in the pharma instance for example, are often co-opted and integrated into a larger organization which commercializes the invention.
I guess this is a rambling way of saying that entrepreneurs and inventors are important to innovation, but in no way define the entire scope or possibility of innovation.