Invention vs. Innovation

The article “Innovation is key to prosperity” from Canada (The Star) does not have a lot of useful information, but it does actually make a claim that there is too much money being spent on invention and too little on innovation:

The Canadian government puts too much emphasis on invention, and not enough on innovation – even though the latter drives economic prosperity, according to a new report from a competitiveness think-tank. Government policy tends to support inventions at the expense of improvements in existing products or processes that would provide value to consumers, says the provincially funded Institute for Competitiveness and Prosperity.”

The article makes amazing claims:  Innovation needs to be improvement of existing products.  “Business Innovation” can be the real driver of innovation and not science and technology.

“Obviously, we need science-based discovery as a foundation for innovation. But our prosperity is the result of business innovation that adds value to our day-to-day lives,” said Roger Martin, chair of the institute.

“Without greater emphasis on true innovation, we will continue to spend billions of dollars funding invention and get little innovation to show for it.”

I have found definition of innovation to be a pretty regular problem R&D management.  How one defines innovation will decide how much money is being spent on innovative projects and how much on the others? How does your organization measure innovation?

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BCG Innovation Study

The management consulting firm BCG has a very informative annual Innovation survey.  The results of the sixth survey were published recently.  The study provides very informative results and may help with benchmarking your organization.

The fraction of executives being satisfied with the return on their R&D investment went up from 43% in 2008 to 52% in 2009.  I wonder what has caused the change. May be because the budgets have been cut enough to drive the return or the executives are working harder to drive focus

Another interesting result is that everyone believes that innovation should be measured rigorously and less than 50% of the organizations actually do so. I have found that measuring innovation requires defining what is innovation.  Many of the companies I have worked with have no clear definition of what is innovation and how it is different from R&D in general.
What is your experience?

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