Three Types of Innovations

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The innovation I understand is to first deeply understand the old things, and then to reorganize the old things’ elements under the conditions of meeting the requirements of the times, in order to achieve new breakthroughs in the old things and meet the old needs of people in new forms. Innovation is a combination of vision, enthusiasm, action, and sweat. It is a process of turning vision into reality.

It is a great and unique quality of human beings. Innovation is everywhere. Innovation is not a scientist’s patent, but a part of everyone’s life. It is a necessary skill that you cannot avoid. There are three type of innovation which is product innovation, process innovation and business model innovation. Which are the innovations on the product, how to produce the product and how business operate. And VR which is virtual reality will be introduce as a product innovation.

Keywords: Product Innovation, Process Innovation, Business Model Innovation, VR

First of all, I just want to talk about the difference between creation and innovation. Creation is a process that from zero to one, it’s a result of scientific development, a concept of technology field, it is a technical progress. It is not pushed by the market. It is also an exploration of the unknown world, with large uncertainties, high risks, large investments, and long return periods. Creation is more about academic results, theoretical progress which means it is not even close to our daily life, but it means significance for the future.

On the other hand, innovation is a process to using an existing technology, it is a result of technology application a concept of economic field, it is an economic development which is pushed by market. It is the realization of the application of mature technology results, and the results are foreseeable, with low risk, low investment, and quick results; innovation pursuit of economic and social benefits, and close integration with real life, social values and economic benefits are immediate!

For example, the birth of the refrigerator was creation. It took decades of development to achieve market-oriented applications. The refrigerator changed from a single door to a multi-door and a single compressor to a multi-compressor. The technological progress was not great, but the market was growing rapidly. It’s innovation. In another words, innovation is what nobody thinks of.

Many times, in fact, combine various things and form new things. Three kinds of innovations will be explained in the following paragraph which are product innovation, process innovation and business model innovation. But before that I want to explain the innovation of VR and what VR bring to us to better explain innovation.

“Virtual Reality (VR) has the ability to create and integrate all kinds of environment, and redesign, retest, and refine them in a virtual computer-based framework (Liagkou 2019),” Just like Liagkou said, Virtual reality use computer to generate a three dimensional space virtual world an dit allow the user to expercience the vitrual world with their visual, auditory and touch.

It will make you feel you are actual there, and you can observe and expercience the vitural world with no lime and space limit. I think VR is a very successful innovation, at least from the economic side. When Facebook pay 2 billion dollar to buy Oculus for the VR, no matter what happened afterward, it is a sucessful innovation anyway (Minsker 2015).

Just image you lie on the sofa, choose the movie you want to watch, put on VR glasses, and then you enter the virtual IMAX cinema,. You can invite anyone to watch the movie with you, he or she is sitting next to you, you can watch and chat without worrying about harassing others, not being disturbed by people who answer the phone, there is no popcorn smell around. It is a sucessful innovation from any ponit of view. Alctually, according to Forrest 2019, the concept of VR was already mentioned in 1938.

It was mentioned many times in sci-fi novels, the novelists’ imagination has made a prototype of a technology product. The very first VR headset was created in 1968 called Sutherland, but it was used in the military and scientific research fields, it is still a ‘high-tech product’ far away from our lives. Until few years ago, Oculus make VR avaliable for every one with 1.6 million start funds, and two years later, Facebook spend 2 billion dollar to buy Oculus.

VR applications today have brought us enough surprises. In the field of education, distance immersion teaching has proven to be beneficial for improving learning results, more flexible and less expensive than on-site teaching; and in manufacturing, VR can allow companies to improve product manufacturing quality, reduce errors, and avoid rework; in Switzerland , VR even shows its talents in the field of criminal investigation, used to reconstruct the scene of the criminal and help the investigation.

VR I mentioned in last paragraph is a typical product innovation. Product innovation refers to creating a new product or innovating new or old product functions. Therefore, product innovation can be divided into two ways: new product innovation and improved product innovation (Christensen 2016). New product innovation usually means that we have an idea, but in fact there is no such product in the market, and even we have never had any experience in the industry of this product.

Many entrepreneurs belong to this state. Improving product innovation refers more to already mature products. We very much hope that we can achieve some point-like or sheet-like local improvements on the basis of existing products. There are completely different products, and this process actually achieves the purpose of improvement. VR is a great example of improving product innovation.

I will take Uber as an example of new product innovation since there is no apps like Uber before. ‘Über Technologies is about disrupting the status quo. The Über mobile app offers an alternative to taxicabs as we know them, allowing people to summon privately driven vehicles for hire with payment handled through the app (Nyren 2015).’

Uber’s innovation is to create a platform that provides high-end, real-time services. Uber first aimed at high-end users as a car rental platform for high-end vehicles, with drivers and cars on one side and users on the other. This model was very light in the early days, no need to buy a car and no need to hire a driver. It is different from the traditional asset-rental car rental, so it develops very quickly

Process innovation is the second type of innovation. “Process innovation is the main determinant of a firm’s pricing policy over time and product innovation has no impact (Chenavaz 2012).” Process innovation is a complete process from the idea of generating new products or new processes to the market application. It includes a series of activities such as the creation, research, development, commercial production and diffusion of new ideas. It is essentially a technology, economic integration process, which includes the two major links of product development and product utilization.

For example, at the beginning you rented bicycles by signing an agreement and accumulated a lot of contracts. Expiry, renewal, inventory, etc. require the employment of several assistants to get the job done. Later, someone develops an APP, users can scan the code to unlock, pay online, and also be able to locate the bicycles through the app. This frees up assistants, greatly improves car rental efficiency, and increases profits. The app created is call product innovation, and the process the app simplify is called process innovation. The understanding of process innovation, whether it only emphasizes technology or economics, is not comprehensive.

Only when the two are combined can it be realistic. Because process innovation is not simply the sum of product development and product utilization, not 1 + 1 = 2, but the whole of technology development and technology utilization, which 1 + 1> 2. Product development, the transfer of development results, and the use of product development results constitute a complete process innovation process (Hullova 2016).

The last type of innovation is business model innovation. “They define business model innovation when a company makes business model replacements that provide product or service offerings to customers and end-users that were not previously available (Pels 2015). Some people say that the business model is the profit model, how to make money. Some people say that the business model is the operating model, how to provide better services and operate a product well.

But I think these are not comprehensive. The business model is that when you are 3 years old, you know what you are going to live at 70 years old. It is a future of your business. In the conversion from old business model to new business model, it is generally to achieve the goals of value increase, cost savings, and accelerated growth. At the same time, the change of any enterprise is not only the change of its own enterprise, but also the change of a group of partners. Also, when you make a transition, you also make a lot of investment.

When you change, your partners will evaluate opportunity costs, and only by choosing the best will they move into a new model with your business (Mustafa 2015). Another example, you are a guy who sell limo to those casinos. And one day you realized you only made few money by selling limos, so you decided buy some limos and rent it to those small casino or business who can not afford limos. That is a business model innovation.

The relationship between problem solving and innovation is totally different. Problem solving is to solve the problem that already exists. It is more like go to a doctor to cure your diseases. And the innovation is you want something better, so you think a way to change the current status. More like you take some health product and change your diet to prevent disease. When you have something happened to you already, that is called problem solving and when you try to change, that is innovation. In my opinion, the most critical problem that innovation can solve is profiting. That is what innovation all about. A brand new hotel with great theme will bring more profit, a new way that customer can check in will bring more profit, a new business model like air bnb will make more profit. In my opinion, innovation brings more money.

We know that Kodak was the first company to master digital camera technology. It was not success in digital photography. Google is not the first company to invent search engine technology, but it is currently the world’s largest search engine company. Nor is Apple the first company to invent a computer. And behind these companies’ success, they are relying on these technologies and their combination of innovations in business models. In the end, a great business empire was created! One those three innovation are successful, but when they come together, that is called real success.


  1. Liagkou, V., & Stylios, C. (2019). Introducing VR technology for increasing the digitalization of SMEs. IFAC-PapersOnLine, 52(13), 451–456. doi: 10.1016/j.ifacol.2019.11.101
  2. Minsker, M. (2015, 03). Facebook gets real about virtual reality: CRM CRM. Customer Relationship Management, 19, 16. Retrieved from http://ezproxy.library.unlv.edu/login?url=https://search.proquest.com/docview/1672756457?accountid=3611
  3. Forrest, C. (2019, January 27). Infographic: The history of AR and VR, and what the future holds. Retrieved from https://www.techrepublic.com/article/infographic-the-history-of-ar-and-vr-and-what-the-future-holds/
  4. Christensen, Clayton M. (2016) The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business School Press, 1997.
  5. Nyren, R. (2015). UBER. Contract, 56(4), 90-95,134-135. Retrieved from http://ezproxy.library.unlv.edu/login?url=https://search.proquest.com/docview/1691803441?accountid=3611
  6. Chenavaz, R. (2012). Dynamic pricing, product and process innovation. European Journal of Operational Research, 222(3), 553–557. doi: 10.1016/j.ejor.2012.05.009
  7. Hullova, D., Trott, P., & Simms, C. D. (2016). Uncovering the reciprocal complementarity between product and process innovation. Research Policy, 45(5), 929–940. doi: 10.1016/j.respol.2016.01.012
  8. Pels, J., & Tomás Andrés Kidd. (2015). Business model innovation. International Journal of Pharmaceutical and Healthcare Marketing, 9(3), 200-218. doi:http://dx.doi.org/10.1108/IJPHM-02-2014-0011
  9. Mustafa, R. (2015). Business model innovation. Journal of Strategy and Management, 8(4), 342-367. doi:http://dx.doi.org/10.1108/JSMA-06-2014-0054

Cite this paper

Three Types of Innovations. (2021, May 28). Retrieved from https://samploon.com/three-types-of-innovations/



What are the 3 types of innovation?
The three types of innovation are radical, incremental, and disruptive. Radical innovation is the introduction of a new product or service that is significantly different from what is currently available. Incremental innovation is the introduction of a new product or service that is slightly different from what is currently available. Disruptive innovation is the introduction of a new product or service that is significantly different from what is currently available and that has the potential to disrupt the existing market.
What are the 4 types of innovation?
There are four types of innovation: radical, incremental, disruptive, and architecture.
What are types of innovation?
Innovation can be classified in several ways, including by type of innovation process, by type of outcome, and by type of goal.
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