Types of innovation

There are different approaches of classifying innovations. Innovation can be roughly classified into three main types:

• radical innovation,
• incremental innovation,
• architectural innovation.

Some authors also add to this list continuous innovation.

An innovation is said to be radical if the technological knowledge required to exploit it is very different from existing knowledge, rendering existing knowledge obsolete. Such an innovations are said to be competence destroying. Radical innovation involves major change. At the other end of the dichotomy is incremental innovation. In it, the knowledge required to offer a product or service build on existing knowledge. Such kinds of innovations are said to be competence enhancing. Incremental innovation involves small improvements and extensions to existing products, processes and services. The target is to increase efficiency - higher quality, reduced times and lower costs. Architectural innovation is innovation in which knowledge components and the core concepts underlying them remains fundamentally the same but knowledge of the linkages between the components has changed. Most innovations are incremental.

Some authors also refer to product innovation, process innovation and service innovation. A distinction has also been made between technical and administrative innovation. Technical innovation is about improved products, services, or processes or completely new ones. This contrasts with administrative innovation, which pertains to organizational structure and administrative processes and may or may not affect technical innovation. Technical innovation may or may not require administrative innovation.