Innovation vs. Invention

Invention describes the creation of unique or novel devices, methods, processes, or compositions. It predominantly occurs as part of product development or engineering. Innovation is the act of improving an existing product, service, process, or business model by introducing new concepts or ideas. The key point to remember about innovation is that these concepts or ideas increase value, deliver better products, and fulfill customer needs. 

Understanding the difference between innovation and invention

Inventions are scientific ideas that are transformed into tangible objects via research and experimentation. Note that inventions may be new products or improvements to existing products. 

Provided it is novel, non-obvious, and has value, the invention can also be patented to provide security to the inventor.

Like invention, innovation can also encompass the introduction or development of a new product, service, process, or business model.

But in any case, the focus of innovation is the delivery of an in-demand product that also satisfies market requirements. 

The terms “invention” and “innovation” are used interchangeably, but as can be deduced from the above, there do exist some subtle differences between the two terms:

  • Invention involves idea formulation and in some cases, how it works from a theoretical perspective. Innovation is about the practical implementation of an idea.
  • Invention requires a scientific skillset, while innovation requires a much broader mix of technical, marketing, and strategic experience. 
  • Inventions occur when a scientist is struck by a new idea. Innovations occur when a company recognizes a customer or market need for a new or improved product.
  • In organizations, invention is usually restricted to the research and development unit. Innovation is more pervasive, forming part of the organization’s culture, mission, vision, and even values.
  • Invention is more concerned with product creation, while innovation is more concerned with how the product will be something that sells. In other words, it focuses on the benefits of the product to consumers.

Examples of innovation vs. invention


The microprocessor was invented by Italian engineer Federico Faggin and a team of colleagues. When it was invented in 1974, however, it was just another component on a circuit board. 

How the microprocessor has been used and adapted in the last half century can be described as innovation.

Products include the earliest desktop calculators and word processors, but today, microprocessors are present in cell phones, kitchen appliances, security systems, and automobile emission control, among many others.


John Bardeen, Walter Brattain, and William Shockley invented the first working transistor whilst at Bell Labs in 1947. 

Six years later, a small Japanese company known as Sony obtained a license to manufacture the first transistor radio.

Years after that, IBM used the same technology to develop small but powerful computers.

This innovation signaled the end of computer systems based on relays or electron tubes and paved the way for the computers we recognize today.

Key takeaways

  • Invention describes the creation of unique or novel devices, methods, processes, or compositions. It predominantly occurs as part of product development or engineering.
  • Innovation is the act of improving an existing product, service, process, or business model by introducing new concepts or ideas. However, in some cases, it can also involve new products or services to cater to consumer needs.
  • Two examples of inventions are the microprocessor and transistor. The numerous products they have spawned since they were invented are otherwise known as innovations.

Read Next: Business Model Innovation, Business Models.

Related Innovation Frameworks

Business Engineering


Business Model Innovation

Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.

Innovation Theory

The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovation management model based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.

Types of Innovation

According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).

Continuous Innovation

That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.

Disruptive Innovation

Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.

Business Competition

In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.

Technological Modeling

Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.

Diffusion of Innovation

Sociologist E.M Rogers developed the Diffusion of Innovation Theory in 1962 with the premise that with enough time, tech products are adopted by wider society as a whole. People adopting those technologies are divided according to their psychologic profiles in five groups: innovators, early adopters, early majority, late majority, and laggards.

Frugal Innovation

In the TED talk entitled “creative problem-solving in the face of extreme limits” Navi Radjou defined frugal innovation as “the ability to create more economic and social value using fewer resources. Frugal innovation is not about making do; it’s about making things better.” Indian people call it Jugaad, a Hindi word that means finding inexpensive solutions based on existing scarce resources to solve problems smartly.

Constructive Disruption

A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.

Growth Matrix

In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).

Innovation Funnel

An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.

Idea Generation


Design Thinking

Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.

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