Is it an innovation? Eight everyday cases

Eight cases

1. A new logo

On its own, no. A purely aesthetic change, such as a new colour or a slightly different shape, is not an innovation (§3.67). A new logo can be part of an innovation only if it comes with a significant change to how the firm markets its products.

2. A small shop starts selling online

It can be a business process innovation for that shop (§3.40), even if thousands of others did it first. Being first in the world is not required; adopting something developed by others also counts (§3.14).

3. A shop adds a new phone to its range

Not for the shop. Adding new items to a retailer's range is not a product innovation unless it requires significant changes to the firm's processes, such as a new supply chain (§3.72). The phone may be a product innovation for its maker (§3.24).

4. A prototype funded by crowdfunding

Not yet. An advertised concept or prototype that is not yet available is in general not a product innovation, even if customers can pre-order it or have funded it (§3.69). It counts once it is available to its users (§3.11).

5. A product that flopped

Yes. A product introduced on the market that sells badly is still an innovation (§3.17). An innovation also need not be good for society or for the firm (§3.18).

6. A software update that fixes bugs

No. Routine changes and updates, such as a patch that only fixes bugs, are not innovations (§3.65). Neither is replacing equipment with identical models (§3.66).

7. Many small improvements in a year

Possibly. A series of minor improvements during the observation period counts if together they make a significant difference (§3.13).

8. A takeover of another company

Not in itself (§3.74). Cutting costs only because inputs got cheaper is unlikely to be an innovation either (§3.76), and a strategy that has not been implemented is not one (§3.77).

What about start-ups?

A new firm has no previous products to compare with. For start-ups the manual therefore compares their products and processes with what is available in their market (§3.73).

Innovation is not the same as R&D

Many innovations involve no R&D at all – adopting an online shop, for example. The other way round, R&D does not always lead to an innovation. Every firm that performs or pays for R&D during the observation period is innovation-active, but innovation often does not require R&D (§1.2). How R&D itself is defined is explained in Is it R&D? A five-question test.

More

The definitions, the two types of innovation and the six business functions, and how Statistics Poland uses them, are on the Oslo Manual page.