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Innovation vs. Invention: Why Understanding the Difference is Crucial

They sound similar – innovation and Invention – that is why they seem to be closely related. Many people believe that at the beginning of an entrepreneurial success story there must be an invention. “The rest” is then just a question of “execution”. Although this perspective seems reasonable, it underestimates the risks and the thoroughly significant differences. For this reason, in this innovation vs. invention comparison, we want to explain the differences between the two. Furthermore, we want to address the risks if the assumption that innovation is just the execution of an invention would be actually adopted. Much more about innovation you will find in our new book that includes comprehensive approaches with mindsets, structures and strategies to innovate in less time, with fewer resources and more success. Register for the download now!

Innovation vs. Invention: Definitions

In the purest sense, invention can be defined as the creation of a product or the introduction of a process for the first time. Invention is just the idea for a possible innovation.

An invention solves a concrete problem with the means of technology. The technical features of the invention thereby fulfil a function, whereby the problem – the task of the invention – is solved. The technical character necessary for patenting requires that natural laws be used to achieve the goal. An invention is also called a “teaching for technical action”.

Innovation comes from the Latin verb “innovāre” and means “the introduction of new things, ideas or ways of doing something.” Innovation thus differs from improvement and transformation in that the focus is not doing something you are already doing better, but rather doing something completely different from what you are already doing.Since de facto all areas of life form potential areas of innovation, it is not surprising that the concept of innovation has practically taken on a life of its own in recent years and has accordingly found quite different uses in business, politics, society and science. This fact can perhaps also serve as an explanation for the fact that to date there is neither a self-contained innovation theory nor a generally accepted definition of innovation or the concept of it.

Why innovation is not just the execution of an invention

The central risk of this assumption is reflected in the number of inventors who never made it to practical use because some detail was still overlooked, or their invention was brought to success by completely different people.

Schumpeter drew a central distinction from this. Invention and innovation were two fundamentally different processes. When we speak of “business start-ups,” Schumpeter said, it is the innovators who play the main role, not the inventors. The great breakthrough inventions in particular are often not ready for the market for a long time, are still afflicted with errors, and therefore easily fail at the first attempt, are not recognized for their significance or are not accepted by the public. Successful entrepreneurs are therefore usually not inventors, but innovators.

They draw on what already exists. The American economist Israel M. Kirzner has also brought this observation to the fore: “discovering what already exists”, for example, using the possibilities of arbitrage, is the core characteristic of the entrepreneur. The term is only seemingly paradoxical. Something already exists, so it does not have to be reinvented, but its significance and potential can still be recognized and discovered anew. The fax is cited as a prime example of this. The invention had been around for a long time, and it was used by completely different companies than the inventors and those who initially tried to market it.

Why innovation means more than inventing new products

The more rapidly markets change, the sooner once innovative products can lose their unique selling proposition. Permanent innovation is therefore a corporate obligation. Whether good ideas actually become innovations cannot be predicted, but forecasts are certainly possible.

Hyped today, interchangeable commodities tomorrow: the struggle for existence of innovative products, technologies and services begins even before they have climbed the innovation Olympus. Because markets change and the competition never sleeps. In a sense, companies are condemned to constant renewal. This applies per se to all areas and even more so to the service portfolio. Global digitization is adding to the pressure.

At the crossroads: decline or turnaround

If renewal fails, the cost trap looms: interchangeable services tend to yield lower margins and growth can only be achieved by cutting costs, which in turn forces more efficiency in standard products. If companies get caught in this downward spiral, there is little room for innovation. However, these alone would help to initiate the turnaround.

Invention vs. innovation examples

1. Invention vs. innovation example: the microprocessor

As an example for the difference between innovation and invention take the microprocessor. Someone invented the microprocessor. But taken by itself, the microprocessor was nothing more than another part on a circuit board. It is what was done with that part – the hundreds of thousands of products, processes and services that have evolved from the invention of the microprocessor – that requires innovation.

Besides this one, there are many other invention vs. innovation examples. 

2. Invention vs. innovation example: the light bulb

It is not uncommon for inventors to be unaware of the commercial implications of their invention. Or they do not think about commercial implementation until much later. Thomas Edison, for example, accumulated more than 400 patents in his first phase of work. One of these was for the electric light bulb. It was not until his second creative phase that he tackled the commercial realization of his most important patents.

3. Invention vs. innovation example: the zipper

Sometimes all that’s missing is the right push. Gideon Sundback, who patented the zipper in 1913, managed to get his invention into mass production. But it wasn’t until the U.S. Army started using the zipper for uniforms in 1917 that the real run began.

4. Invention vs. innovation example: AT & T

Inventions often come from pure research institutions and their scientists are often miles away from commercial interests. This is true even for private research institutions. For example, the foundations for transistor technology were developed at the Bell Laboratories of the U.S. communications giant AT&T. In 1953, a small Japanese company acquired a license to manufacture transistors and shortly thereafter introduced the first transistor radio to the market under the manufacturer’s name Sony. A few years later, IBM used the same technology to develop small, powerful computers, ending the era of large-scale computing systems based on relays or electron tubes. The solar cell, now the basis of all photovoltaic systems, was also developed at Bell Labs. In all this, AT & T was essentially only a licensor. Others always made the big profits.

5. Invention vs. innovation example: Xerox

Similarly unfortunate was the research carried out by Xerox in its Palo Alto Research Center (PARC). With the exception of laser printer technology, Xerox hardly managed to turn its own inventions into hard cash. Both the computer mouse and the graphical user interface, without which such a mouse is useless, were essentially developed at PARC – as early as the 1970s. But it was not until Apple made real innovations out of both with the Macintosh computer almost 10 years later. In the meantime, the mouse and the graphical user interface have become standards for computers.

Innovative vs. inventive

Similarly, to innovation vs. invention we also want to explain the oftentimes confused usage of their adjectives: Inventive vs. innovative. Two words that are also spelled similarly and pronounced similarly. Same as for innovation and invention the terms have slightly different meanings:

Inventive is a term for someone who can design new things, someone who shows creativity in thinking, someone who is imaginative and who can come up with something completely new.

In contrast, innovative is an adjective that describes someone who the introduces new things, ideas or ways of doing something. This person shows creativity in thinking and imagination to take the next step forward.

Innovation vs. invention: what is more important?

While innovation and inventions may have seemed similar to you before, we have now explained in detail the differences between innovation and invention.

Importance of inventions

  • Inventions require a completely new concept
  • Inventions provide evidence of the credibility of scientific knowledge
  • Inventions require skills
  • Inventions always have originality and are new to the world
  • Inventions bring unexpected results
  • Inventions should come first
  • Inventions are the building block for innovation

Importance of innovations

  • Innovation bring betterment in the existing concept, service or product
  • Innovation contributes significantly to the growth of a company
  • Innovation is always new but with a changed concept or pattern
  • Innovation gives a technical/competitive edge
  • Innovation demands a variety of skills
  • Innovation tends to attract the best talent
  • Innovation always occurs when there is a need to bring change in an organization
Whereas invention can be described as a fundament, innovation can be referred to the introduction of new things, ideas or ways of doing something.

If we would need to answer the question innovation vs. invention: what is more important then, it could be concluded that both play an important role in creating continuous value for a company.

Industry Standard Approach on Innovation

Since we know that the topic of innovation vs. invention will continue to be of significant importance in the future, we would like to share the following excerpt from our book “How to Create Innovation” with you: “We know – innovation is an epic challenge. Depending on where you are and how you play it, your levels of success and outcomes you create will be drastically different, so a particular result cannot be guaranteed.  But if you do not make a major leap forward leveraging this consolidated body of knowledge, ask yourself what is going wrong and do let us equally know what you have been struggling with.

Using this proposed industry standard approach on innovations, organisations can create innovation in a target-oriented way, leverage their strengths, create blue oceans and overcome luck.  The practices we introduced are mostly well-established, have proven themselves in the trenches or are deeply rooted practices by Silicon Valley players.  In addition, there are numerous reads to take you further. Our contribution was to identify winning practices, add what is missing and consolidate everything in a holistic setting and adapt it to the realities of large organizations.” In addition to this industry standard approach on innovation, we have a variety of other ground-breaking tools and models. These are available via our download link.


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