Innovation

How Do You Define Innovation? (And 3 Other Keywords You Must Know)

The area of innovation is accompanied by many buzzwords. One of my favorite dinner-party tricks in a room full of innovators is to ask them how they define innovation. You will never get the same answer twice.

Whether you are an entrepreneur, an academic or a business person, it’s important that we share how we relate to innovation and what drives innovation for us.

Here’s our definition as well as a few other key words that shape the innovation environment.

WHAT IS INNOVATION?

This should be the first question you ask before thinking about how you can contribute to this space. The answers that appear are quite varied, but for me there is only one way to define innovation and it is simple.

Innovation is when value is generated through creativity. And in this case value can be any value:  for a company, a person or a group. Creativity can encapsulate any interesting idea.

Ideas can be created and topics can be researched but innovation is when the idea is real and people or the company benefit from this idea.

And of course there is a change.

A change from state A to state B where state B has been improved with the idea!

Innovation has a simple and plain definition and the challenge is in the implementation and who benefits from it.

WHAT IS A JOINT-VENTURE?

A Joint Venture is a temporary partnership between two or more companies to carry out a project jointly in a given time.

Both decide how many resources to apply to the project and the mutual benefits that they will have. At the end of the project, expenses, benefits and results are distributed as agreed.

This association is always made through an employment contract in which the clauses are clear, including rights to use the results, intellectual property and sales rights.

A Joint Venture would also be called Consortium or Partnership.

Joint ventures are created within the EU between different universities and companies for the realization of a project or consortia between industries to seek a joint solution to a problem. This was the case for the SCA (Sustainable Apparel Coalition) that the fashion industry created. They came together to create transparency within the production chain and learn where each material came from and how sustainable a product is.

WHAT IS A SPIN-OFF?

A spin-off is when a large company creates another, smaller company from an existing department.

Spin-offs are usually created when you want a department to develop a service or product faster than the parent company. They have more freedom of movement, are able to make decisions faster and have less bureaucracy.

The separate company, or Spin-off, has and manages its own assets, employees, intellectual property, technology and products.

Some examples include: Agilent Technologies from Hewlett Packard, Nuage Networks or TV Everywhere from Alcatel-Lucent, Invista from DuPont, and Karen Millen from Coast. The Hobbit is a spin-off of the Lord of the Rings … etc.

WHAT IS A STARTUP?

A startup is a pre-company.

It is a temporary consortium among people who start the company.

During the stage in which the future company is called a startup, it works to confirm its business model, develop a client portfolio and accompanying services. In many cases the first customers of a startup company will help guide future offerings. It allows the startup to tweak its product and service and investigate whether they can scale their idea.

A comparison and a market analysis are very important to begin to decipher the client portfolio, the competition and how the future company differentiate themselves in the market. In this state the future company may be dissolved, merged with another company or form a completely new one.

The business must be based on an innovative idea that does not exist in the market.

The business world is full of jargon and the field of innovation is no difference. Once you can define innovation, you can learn how to be successful within it. Are there any other buzzwords that you hear? Let us know and we will uncover its meaning.

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