The buzz about innovation is nonstop these days. The business world is chattering constantly about it, from business periodicals to LinkedIn forums. Even a recent issue of The Economist focused on the debate about the perceived decline of real innovation in recent years. Whether or not the perceived decline is real, the fact the terms innovation and invention are often used interchangeably is certainly not helping.
"Above all, innovation is not invention." Peter Drucker wrote that in the early 1970s. Apparently the terms were being confused at that time as well. He makes an important distinction in the next sentence, saying, "Innovation is a term of economics rather than technology." It's probably obvious, but what he means is that innovation occurs because of the economic choices made by a society when they adopt some form of invention. Frans Johansson, in his book "The Medici Effect," says, "Innovations must not only be valuable, they must be put to use by others in society. It has to be 'sold' to others in the world."
To illustrate the difference, let's look at one of the most prolific inventors of all time. Thomas Edison had 1,084 patents; only two others in history have more. Only 31 of Edison's patents resulted in products that were widely adopted commercially. The majority of his other inventions were never found to be useful enough or valued by society to be innovative. Innovation is proven when social adoption occurs and the invention is significantly consumed or utilized.
Drucker made a secondary point that needs to be understood as well. He said, "Nontechnological innovations - social or economic innovations - are at least as important as the technological ones." Technology is not the only source of invention and innovation. We are constantly coming up with new processes and methods. For instance, it can be innovative to reconfigure the value stream by offering something at no cost (e.g., free newspapers and phone calls). Recent examples of social innovation are charter schools, fair trade, microfinance, and companies forming for the "social good."
Another source of innovation is repurposing old technology for new value-creation. One recent example of an old technology applied in a new way is the flywheel that was originally used to help maintain the consistency of the rotational speed of a shaft. This technology was ingeniously repurposed to maintain the consistency of electrical flow in the generation of electricity using wind and solar power because those sources do not consistently produce power (wind dies, sun fades). Old technologies may have many other useful applications, if we can distance ourselves from the bonds of current utilization.
Why is distinguishing these terms important? Innovation is the desired outcome, and invention is one of the prerequisites. Invention is a precursor to innovation, but it is not enough only to invent. The value proposition of the invention needs to be sold to its potential users. Often, many truly useful inventions never materialize because their value proposition isn't effectively communicated to potential consumers. The sad truth is, most inventors are really good at developing very useful inventions, but lack the skills to effectively communicate the value.
Inventors come up with really cool ideas. Innovators are those who invent and effectively communicate the value of those cool ideas to those who find value.