The classic definitions of innovation

1. the process of making improvements by introducing something new

2. the act of introducing something new: something newly introduced (The American Heritage Dictionary).

3. the introduction of something new. (Merriam-Webster Online)

4. a new idea, method or device. (Merriam-Webster Online)

5. the successful exploitation of new ideas (Dept of Trade and Industry, UK).

6. change that creates a new dimension of performance Peter Drucker (Hesselbein, 2002)

In economics, business and government policy,- something new - must be substantially different, not an insignificant change. In economics the change must increase value, customer value, or producer value. Innovations are intended to make someone better off, and the succession of many innovations grows the whole economy.

The term innovation may refer to both radical or incremental changes to products, processes or services. The often unspoken goal of innovation is to solve a problem. Innovation is an important topic in the study of economics, business, technology, sociology, and engineering. Since innovation is also considered a major driver of the economy, the factors that lead to innovation are also considered to be critical to policy makers.

In the organisational context, innovation may be linked to performance and growth through improvements in efficiency, productivity, quality, competitive positioning, market share, etc. All organisations can innovate, including for example hospitals, universities, and local governments.

While innovation typically adds value, innovation may also have a negative or destructive effect as new developments clear away or change old organizational forms and practices. Organisations that do not innovate effectively may be destroyed by those that do.