Innovation of human capital

For more than half a century, research and development (R&D) has been closely associated with technological innovation (Miller & Morris, 1999). Invention is the narrowest definition of innovation. Drucker (1994) maintained that there are seven basic sources of opportunities to innovate. Only one of them refers to inventing something new. Innovation is thus more than invention and does not have to be technical. There are, for instance, numerous examples of social and economic innovations (Drucker, 1994). Innovation is a proposed theory or design concept that synthesizes extant knowledge and techniques to provide a theoretical basis for a new concept (Bright, 1969; Sundbo, 1998). Innovation thus has many facets and is multi-dimensional.

The most prominent innovation dimensions can be expressed as dualisms—(1) radical vs. incremental; (2) product vs. process and (3) administrative vs. technological (Cooper, 1998). Innovation can be radical and incremental. Radical innovations refer to path-breaking, discontinuous, revolutionary, original, pioneering, basic or major innovations (Green, Gavin, & Aiman-Smith, 1995). Incremental innovations are small improvements made to enhance and extend the established processes, products and services. However, this contradistinction does not "necessarily [correspond] to the more fine-tuned reality" because "radicality is a continuum" (Katila, 2002, p. 307). Product innovation, as the name suggests, "reflects change in the end product or service offered by the organizations, [whereas] process innovation represents changes in the way firms produce end products or services" (Utterback cited in Cooper, 1998, p. 498). Some researchers have categorized innovation as either technological or administrative. Technological innovation refers to "the adoption of a new idea that directly influences the basic output processes", whereas administrative innovations "include changes that affect the policies, allocation of resources, and other factors associated with the social structure of the organization" (Daft, 1978 cited in Cooper, 1998, p. 497).

For the purpose of the present study, innovation is defined broadly to include new products, new processes, new services (including new uses of established products, processes and services), new forms of organization, new markets and the development of new skills and human capital.

Source: by Fang Zhao (Maximum business profit through E-Partnership)