Technical innovation and market innovation are not the same thing. Innovating on a market consists of bringing a new value proposition to it. In this respect, services, the business model or even image are also sources of market innovation. Not all innovation is technical and not all technical innovation is market innovation.
It is astonishing to note how different ideas are put into everyday language under the term ‘innovation’. The same expression will often be used to refer to a new technology from a research laboratory (this is very often the focus of attention of the public authorities and often the media), a new manufacturing process, a new product deemed innovative, a new tool made available to customers, a different way of approaching one’s market.
They are useful for characterising the “step” taken in relation to the previous situation but provide little information on the impact that the innovation will have in terms of products/markets/competition. In addition, in a highly technological world, there is a natural tendency to consider that innovation is only technical
There is constant innovation in all areas of B2B high-tech. Of course, technical innovation is essential and is often a key asset for creating more customer value in technology markets. But not every technical innovation is a market innovation and even less a successful market innovation:
- Firstly, for a reason of time, because there is often a significant time lag between the appearance of a technical innovation and its adoption by the market.
- Secondly, because technical innovation and market innovation can be different in nature. The simple improvement of an existing product to ‘keep up’ with the competition, a new manufacturing process to reduce costs or improve productivity, or any technical innovation that does not clearly change the value proposition to the market and customers, do not necessarily constitute market innovations, no matter how ingenious they may have been or how far they may have gone in technical innovation.
- Conversely, the reuse of an old technique may not constitute a technical innovation but may constitute a market innovation
It is therefore essential to evaluate any technical innovation in terms of market/customer value and not simply in terms of performance. This makes it possible to determine the real degree of market innovation brought about by a technical innovation, while guarding against optical illusions. On the other hand, it is necessary to know how to create market innovations that are not based on technology. These two elements make it possible both to really innovate in the markets and to serve as a guide for the allocation of resources between different possible innovation activities.
A technical innovation may be brilliant but not a market innovation and sometimes an innovation in services, revenue model or image can be just as effective and less costly a market innovation than an innovation in the product itself.
