Ambiguity of Innovation Typology in Innovation Measurement:
Towards a Unified Typology of Innovation and Measurement Model
Tomasz Sierotowicz
Department of Economics and Innovation, Institute of Economics, Finance and Management, Faculty of Management and
Social Communication, Jagiellonian University, Prof. Lojasiewicza 4, 30-348, Krakow, Poland
Keywords: Typology of Innovation, Innovation Management Innovation Development, Innovation Measurement Model.
Abstract: Innovations are seen as opportunities to sustain and accelerate countries’ development of not only their
companies but also their economies. The literature on the subject presents a number of different and often
contradictory typologies of innovation. This raises the problem of discrepancies in terms of the definitions,
as well as possible socio-economic effects of particular types of innovation and their relationships to ex post
and ex ante phases in innovation process models. So far, no attempt has been made to address the problem of
unifying the typologies of innovation. The main objective of this paper is to attempt this challenge and propose
one consistent typology of innovation that allows the design of a framework for an innovation measurement
model. The presented research results are the next steps towards developing a consistent innovation theory,
and will help design a coherent innovation measurement model.
It is beyond question that the development of
innovation is closely linked to raising the level of
knowledge, carrying out R&D activities, and seeking
new ways to apply knowledge and technology in the
economy. Hence, the knowledge-based economy, by
nature, refers to innovation. The concept of the
European Union Regional Policy for RIS3 (Regional
Innovation Strategy for Smart Specialization)
emphasizes the need to take into account the life cycle
of the product, which varies according to the type of
innovation RIS3 Guide (2012).
The World Bank proposal contains four pillars of
the Knowledge Economy (KE) framework, one of
which is strictly dedicated to innovation: “An
effective innovation system of firms, research
centers, universities, consultants, and other
organizations” Derek et al., (2006, p. 4). The
proposed innovation measurement system consists of
22 variables Derek et al., (2006). These variables, on
the other hand, correspond to the subjective concept
of innovation measurement presented in the Oslo
Manual (2018). In this manual, the examination of
connections between innovations and the economic
changes, is considered as the main goal of measuring
innovation (both at the microeconomic level, i.e. in an
enterprise, as well as at the macroeconomic level),
Oslo Manual (2018). Consequently, a typology of
innovation is proposed, involving the classification of
innovation based on the area in which it occurs. Thus,
four basic types of innovation are identified in the
following areas: products, processes, organization,
and marketing, Oslo Manual (2018) and James
(2017). However, in the literature on the subject, we
find various alternative typologies of innovation,
including, among others, classification of innovation
as radical, breakthrough, incremental, disruptive, and
displacement. Are these innovation typologies not
important, both in the process of planning the strategy
of innovation development and in the analysis of the
level of innovative development of national or
regional economies? In particular, the theory of
innovation presented by Christensen et al., (2004) and
Christensen (2016), where one of their types causes
disruption is a proposal to establish a typology of
innovation, whereby the impact on the economic
environment has been applied as a criterion of
classification. Plainly, reference to different types of
innovation raises obstacles to their unique
identification and interpretation. An efficient and
effective model for measuring innovation cannot be
Sierotowicz, T.
Ambiguity of Innovation Typology in Innovation Measurement: Towards a Unified Typology of Innovation and Measurement Model.
DOI: 10.5220/0009434800370048
In Proceedings of the 2nd International Conference on Finance, Economics, Management and IT Business (FEMIB 2020), pages 37-48
ISBN: 978-989-758-422-0
2020 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
based on different typologies of innovation, as this
could lead to conflict or ambiguity in the results of
any analyses performed. In addition, different types
of innovation can be achieved in a single innovation
process, Pombriant (2017), Prahalad et al., (2017).
For example, the development of new technologies,
in particular high-tech, is not only a complicated
process, but also a complex one, Espinosa et al.,
(2017), that often lasts several-or, in some cases, a
dozen or so-years, with numerous innovations
consisting in improvements in various areas of the
developed technology, Chiva et al., (2014), IBM
(2007, 2016). The development of different types of
innovation requires different methods of financing,
the involvement of knowledge resources, different
partnership agreements, and the use of various tools
anticipating and measurement of the expected effects
of implementation. So, the question arises: should not
the innovation typology of the subject matter be
included in the innovation measurement model?
According to the definitions of innovation in the Oslo
Manual (2018), the innovation take place only when
its implementation is noted. How then should we
anticipate the economic effects of innovation at the
planning stage of an innovation development
strategy, and indeed how can we predict the economic
impact of implementing an innovation development
project prior to actual commencement of
implementation. Hence, it follows that separate
analyses, based on different research tools, are needed
at two stages of the innovation process: at the
planning and implementation stage of R&D projects
within a specific innovation development strategy,
when the real economic value of innovation is hidden,
and at the post-implementation stage, when it is
possible to obtain empirical data from the economy,
and to measure the impact and effects of the
implementation or another form of
commercialization of innovation. It seems that the
correct and exhaustive innovation development
measurement model should consist of two stages,
with implementation as the only criterion for
demarcation between these stages. The first is the ex
ante stage, where it is necessary to predict and
estimate the effects, and the second is the ex post
stage, where the measurement of effects occurring in
the economic environment is made. This means that
the measurement results of the two stages cannot be
compared. How does the typology of innovation,
presented in the rich literature on the subject, refer to
the division into ex ante and ex post stages?
Answering this question can help in designing an
appropriate innovation measurement model,
applicable both to an enterprise as well as to the
macroeconomic level, for national economies.
Taking into account the different typologies of
innovation, as part of a model for measuring the
potential and actual economic effects of innovation,
requires prior elaboration and adoption of a consistent
innovation typology; otherwise, carrying out
comparative analysis with different typological
solutions is methodologically unreasonable. For this
reason, the first step towards designing a coherent
model for measuring innovation involves attempting,
firstly, to present the different typologies of
innovation and, secondly, to identify the main
differences between them, these constituting the
barriers to the development of a single, consistent
innovation typology. The main objective of this paper
is to attempt to delineate the major differences in
innovation typologies, advancing a proposal to use a
single, consistent typology of innovation that would
help to build a framework of the innovation
measurement model, both at the ex ante and ex post
stages. So far there was no solution of such problem
presented in the literature. The common issue in this
case is to attempt to find solution with use of
reductionist approach. In such complex and not only
complicated phenomenon as innovation development
is, using such approach may not provide the adequate
solution. That is the point of novelty presented in this
paper. In order to achieve the objective of this paper,
the complexity theory paradigms, Cicmil et al.,
(2017), Espinosa et al., (2017), along with mutatis
mutandis methodological approach was used. The
framework of the innovation measurement model can
helpful not only in measurement process but also in
comparative analysis of innovations regardless of
innovation typology. Thus, it is the first phase of
design a coherent innovation measurement model,
performed based on the subject literature.
One of the first innovation typology approaches
proposed in the literature was Joseph Schumpeter’s
five-tier classification system. These categories are
considered in the context of the changes that they
induce in the economic environment Schumpeter
(1934) as cited in Oslo Manual (2005, p. 29; 2018, p.
introduction of new products;
introduction of new methods of production;
opening of new markets;
FEMIB 2020 - 2nd International Conference on Finance, Economics, Management and IT Business
development of new sources of supply for raw
materials or other inputs;
creation of new market structures in an industry.
The introduction of new elements in the existing
economic environment of a given industry branch-
such as the opening up of a new market or the
introduction of a new technology or method of
production-falls under a single process, which,
despite its nomenclature, does not necessarily implies
neither revolution in the structure of an economic
environment nor its destruction, but rather the
creation of a new one. Joseph Schumpeter described
this process as ‘creative destruction’, pointing out its
fundamental importance to capitalism (Schumpeter,
2008, p. 85).
Stephen Kline and Nathan Rosenberg, whilst
presenting the concept of the chain process of
innovation, proposed the following typology of
innovation (1986, p. 279):
new product;
new process of production;
the substitution of a cheaper material, newly
developed for a given task, in an essentially
unaltered product;
the reorganization of production, internal
functions, or distribution arrangements leading
to increased efficiency, better support for a
given product, or lower costs;
an improvement in instruments or methods of
doing innovation.
Apart from the above classification, the following
innovations were differentiated (Kline & Rosenberg,
1986, pp. 288-304):
evolutionary – the small, cumulatively
important, evolutionary changes that reduce
costs and bring better fit of the product to
various market niches;
radical, revolutionary – these occurrences are
rare, but often mark major changes that create
whole new industries, and they should therefore
not be excluded from consideration. Radical
innovation is inherently a learning process. It is
very difficult and may be counter-productive.
Recent examples include semiconductors,
lasers, atom bombs, Internet, and genetic
Stephen Kline and Nathan Rosenberg also specified a
spectrum of innovations, a field within which all
innovation occurs (1986, p. 294): “… it is far better
to conceptualize this range as a spectrum than to think
of two kinds of innovation, revolutionary and
evolutionary. Where a given task lies along this
spectrum of uncertainty has a major influence on
many aspects of what is appropriate innovation.”
Since a certain spectrum of innovation was defined,
with two types of innovation identified as the
boundary lines of demarcation-on the one hand,
evolutionary, and, on the other, revolutionary-then
the question about the definition of these lines arises.
How can one distinguish a change that is a refinement
from evolutionary innovation, which is already part
of the innovation spectrum and therefore lies within
that spectrum? What are the criteria constituting this
demarcation line that allow distinction between what
is an innovation and what is not (and, such as lies
beyond the innovation spectrum)? The solution to this
problem, as well as to the problem of the second
demarcation line in the innovation spectrum, for
radical innovation, is proposed in the results and
conclusion subsections.
According to Christensen et al. (2004, pp. 277-
279), innovations are divided into two main types:
sustaining to firms – developed systematically
and allow firms to provide better and more
profitable products that meet the expectations of
the most demanding customers in the market;
disruptive – initially inferior to existing
offerings, not good enough to meet the
performance requirements of the core market.
There are two types of disruptive innovation:
those that can compete against non-
consumption and establish a completely
new market (new-market disruption), and
those that can deploy a business model that
profitably serves the less demanding
customers (low-end disruption).
The systematic innovations play two fundamental
roles in the market environment Christensen et al.,
(2004, p. 284):
they define the path of incumbent improvement,
they allow for disruptive companies to develop
their own improvement trajectories.
In the area of sustaining innovations, a
classification system has been proposed that outlines
the three main types of innovation Christensen et al.,
(2004, pp. 284-285):
displacement sustaining innovations – are
innovations that target a specific piece of an
industry’s value chain;
radical sustaining innovations – are the complex
end of the continuum, tend to be very
complicated and expensive, can be introduced
only by integrated incumbents that control large
swaths of an industry’s value chain, and also
give firms an opportunity to dramatically
change their competitive position in the market;
Ambiguity of Innovation Typology in Innovation Measurement: Towards a Unified Typology of Innovation and Measurement Model
incremental sustaining innovations – offer
smaller improvements than radical sustaining
innovations, are less expensive and less
complicated, and, therefore, have less influence
on competitive position in the market.
The point of distinction between the
abovementioned innovations is the point of
modularity criterion presented by Clayton
Christensen. If innovation occurs at a point of
modularity, then it is a displacement innovation.
Otherwise, it is radical or incremental innovation. In
Clayton Christensen's typology of innovations
Christensen, et al., (2004), radical and incremental
innovations are in the same area of the continuum.
The same incumbent company can easily and
efficiently create radical and incremental innovations.
On the other hand, there is no continuity between
sustaining and disruptive innovations, as the latter
involve the introduction of other and, therefore, new
products to the market (Figure 1).
Figure 1: Spectrum of innovation typology based on
Clayton Christensen’s concepts.
The scale of modularity (novelty) in the area of
radical and incremental sustaining innovations of the
same product is a factor that distinguishes these
innovations. So, there is a spectrum of innovations in
the same product or service, with level of novelty
features, which defines the following demarcation
lines (Figure 1):
for incremental sustaining innovations – a single
change that has a novelty feature,
radical sustaining innovations – the number or
complexity of changes that have a large novelty
The demarcation line between the continuity of
innovation development (Figure 1) and displacement
innovations is the point of modularity. The open
question in the presented concept is to determine the
degree of complexity of improvements between
incremental and radical sustaining innovations, the
latter being defined as the introduction of many
changes at the same time or as a big leap in the
development trajectory.
The lack of clarification through quantitative
indicators (Figure 1) leaves efforts to identify a
precise position for the demarcation line between
these types of innovation open, significantly
impeding its use in the innovation measurement
The spectrum of change, characterized by the
novelty feature, was also defined by Joe Tidd, John
Bessant and Keith Pavitt. On the one hand,
incremental innovation has been adopted as the
border of the discussed area, and, on the other hand,
within radical innovation, the innovation termed by
the authors as ‘novelty for the world’ was adopted.
The defined area of changes, characterized by the
novelty feature, makes reference to each of the four
types of innovation (four "P") Tidd, et al., (2005, p.
product innovation – changes in the things
(products/services) that an organization offers,
process innovation – changes in the ways in
which they are created and delivered,
position innovation – changes in the context in
which the products/services are introduced,
paradigm innovation – changes in the
underlying mental models that frame what the
organization does.
The presented typology, therefore, represents a
spectrum of innovation where each type has an area
of innovation ranging from incremental innovation-as
the minimum, representing of ‘doing what we do
better’-to radical innovation-as the maximum,
representing of ‘new to the world’ Tidd, et al., (2005,
pp. 11-13).
‘New to the world’ has been defined as
introducing to the market new goods and services that
lead to the emergence of a new market. An example
of this kind of innovation that resulted in the
emergence of a new market is the introduction of the
first telephone, radio, TV, computer, wireless phone,
and steam engine. Such innovations have been
described separately in the conceptions of Joseph
Schumpeter and Clayton Christensen, removed from
the continuous area of changes in the innovation
spectrum, as they are completely novel. Specifically,
in the Clayton Christensen conception, new to the
world innovation is defined outside of the continuity
of sustained innovations development area, due to the
FEMIB 2020 - 2nd International Conference on Finance, Economics, Management and IT Business
fact that it is not a result of systematic development
of a product presented previously and therefore
known in the market. On the other hand, further
development of a completely new product that had
previously been introduced belongs to the continuity
of sustained innovations area.
Another example of innovation typology that can
be found in the literature is the innovation matrix,
which presents three types of innovation, linked to the
development levers in two areas Davila, et al., (2012,
p. 41):
the business model, which contains three levers:
value proposition, value chain, and target
technology, which also contains three levers:
product and service, process technology, and
enabling technology.
The following three types of innovation are
specified in each of the two areas Davila, et al., (2012,
pp. 29-46):
incremental – small change in one or more of all
six levers within either business model and
semi-radical – business model-driven
innovations include:
significant change in one or more of the
three levers of the business model area;
small change in one or more of the three
levers of the technology area;
semi-radical – technology-driven innovations:
small change in one or more of the three
levers of the business model area;
significant change in one or more of the
three levers of the technology area;
radical – significant change in one or more of all
six levers within either business model and
This concept (Figure 2) highlights the role of
technological innovation and the impact of the
application of new technologies on products,
services, processes, and business model. As, in the
previous concept, radical innovation is identified
through the novelty of the object of implementation
as a whole, an approach has been proposed whereby
the type of innovation is defined by distinguishing
between improvement – which, in this concept,
means changes made to existing products – and
novelty, which refers to wholly new and therefore
non-existing objects of implementation. This
distinction represents the demarcation line between
incremental, semi-radical, and radical innovations.
Given the criterion of distinguishing between small
and significant changes, it leaves room for different
interpretations, and not specify whether it is a single
or cumulative change. After all, it is not necessarily
the case that a small criterion that marks a single
change is not at the same time significant.
The graphical representation of this innovation
typology is shown in Figure 2.
Figure 2: Spectrum of innovation typology based on
concepts of Davila et al.
The blurry criterion causes creation of a single area of
the typology of innovation, where a single
demarcation line is characterized by subject to
interpretation drift. It is important to point out in this
concept the need to measure appropriately selected
input values and output innovations including
tangible and intangible assets that represent two ex
ante and ex post areas of the innovation process
Davila, et al., (2012). It is infeasible to design a valid
innovation measurement model without
simultaneously including the two types of variables
belonging to both phases of the innovation process.
Vijay Govindarajan and Chris Trimble (2005,
pp.21-22), proposed four different types, thus
introducing a basic distinction between the types of
continuous process improvement – improves
existing business and involves countless small
investments in incremental process innovations;
process revolutions – improve existing business
processes, but in major leaps—say, a 30 percent
increase in productivity—through the
implementation of major new technologies;
product or service innovations – are creative
new ideas that do not alter established business
strategic innovations – they may include
innovations in process or product but always
involve unproven business models.
As innovation development is complex,
multidimensional, and burdened by increased risk
Ambiguity of Innovation Typology in Innovation Measurement: Towards a Unified Typology of Innovation and Measurement Model
level, each of the specified types of innovation
requires a different management approach, so all
efforts should be made at the planning stage of
innovation development, followed by measurement
and analysis of its effects with particular attention to
unambiguous conclusions. Attention should be drawn
to the quantitative specification given in the
description of the revolutionary process, which
represents a 30% increase in productivity, as the
minimum criterion for this type of process. A similar
criterion was proposed by Richard Leifer, et al. (2000,
p. 5) as one of the conditions of a radical innovation
project-namely, a 30% reduction in costs or a fivefold
improvement in the achieved parameters that describe
current functionalities-which, together with the
description of revolutionary process by Vijay
Govindarajan and Chris Trimble, allows treatment of
these two categories as one type of innovation (Figure
Figure 3: Spectrum of innovation typology based on
concepts of Vijay Govindarajan and Chris Trimble.
In the presented typology of innovation, the
continuous improvement process and the
revolutionary process are a single, continual area of
innovation that is being systematically developed.
The criterion that distinguishes the continuous
improvement process from the revolutionary process
is the achievement of the proposed boundary value of
efficiency, which belongs to the output values of the
innovation measurement model. This value thus
identifies the unambiguous position of the
demarcation line, without drift, as was the case in the
previous innovation typologies. The boundary value
can be reached by implementing a new technology,
which differs from Tony Davila, Marc Epstein and
Robert Shelton's concept, where the introduction of a
completely new technology is considered as semi-
radical innovation, regardless of the increase in
performance. Exceeding the boundary value can also
be achieved either by a single improvement or by
many cumulative improvements. In this innovation
typology (Figure 3), we can speak of the cumulative
nature of improvements or incremental innovations.
When you exceed the boundary value of the selected
indicator, you can speak of radical innovation. In
contrast, in the area of product and service
innovation, the boundaries between the types of
innovation have not been specified. Nevertheless,
product and service innovation compose one area of
innovation that includes the entire spectrum of
innovation typology, from incremental innovation of
the same product or service to radical innovation of a
new product or service.
Taking radical or revolutionary innovation
together with incremental innovation, as one area of
sustaining innovation, implies the need to establish a
criterion for distinguishing between these two types
of innovation in a single spectrum. Thus, the question
arises whether these boundary values can be set
separately for the input or output values of the
innovation process.
An example of the concept of introducing tangible
boundary values as demarcation lines between
incremental and radical innovations is exemplified in
Richard Leifer's proposal Figure 4).
This concept proposes two criteria for
distinguishing between incremental and radical
innovations Leifer, et al., (2000, pp. 4-5):
novelty of used technology:
learning about new capabilities that
technology offers, which leads to
improvements in the existing products;
applying new technology, which leads to
the development of new products;
effects achieved by incremental and radical
incremental innovation highlights the
issues related to the reduction of
production costs and / or development,
amendment, or extension of existing
product functionality with new
capabilities, which requires a deepening of
competences within existing technology;
radical innovation highlights the creation
and development of new types of
businesses (or permanent changes in the
way they are carried out) and the
emergence of new product lines, which is
possible to achieve on the basis of new
ideas, technologies, or significant cost
FEMIB 2020 - 2nd International Conference on Finance, Economics, Management and IT Business
The distinctions were made based on the example
of technological innovation (Figure 4):
criterion for the application of technology,
belonging to the input quantities, where:
incremental innovation, as learning and
applying new capabilities of known
radical innovation, as the introduction of
new technology, which leads to obtaining
a new product;
the criterion of achieved results, belonging to
the size of the innovations output quantities,
incremental innovation:
lowering production costs;
change or extension of existing
product functionalities, requiring
deeper competences in current
radical innovation:
creation and development of new
business (or permanent changes in
the way it is run);
creation of new product lines, which
is possible to achieve on the basis of
new ideas, technologies, or
significant reduction of production
Both types of innovation are achieved as part of
projects, which results in the process of systematic
development. On the basis of differences in the
implementation of innovation development projects,
it was determined that, unlike projects bringing about
incremental innovation, projects involving radical
innovation have the following characteristics Leifer,
et al., (2000):
completely new set of functionalities designed
to be achieved;
improvements to the existing functionalities,
only in the event they achieve five times better
results than the previous ones;
significant cost reduction, amounting to a
minimum of 30% of current costs.
This kind of quantitative and qualitative specification
makes it possible to unambiguously distinguish
between incremental and radical innovations, thus
determining the demarcation line without drift in the
continuous innovation development spectrum (Figure
Figure 4: Spectrum of innovation typology based on
concepts of Richard Leifer et al.
Therefore, from all the presented concepts, this
seems to be most appropriate for use in the innovation
measurement model. It seems that it is also possible
to use this concept as a starting point for building a
model for measuring innovation.
The development of knowledge, creativity, and
need, which are the sources of innovative ideas, are
not the exclusive domain of companies today. The
development of ICT, the increasing availability of
technology, and the presence of ideas outside the
internal structure of the company leads to the opening
of the innovation process to the economic
environment. This leads to the concept of open
innovation, which (unlike closed innovation) is
defined as a process where valuable ideas can come
from within or outside the country, region, or
enterprise. This approach means treating equally the
significance of external and internal ideas, inventions,
or patents Chesbrough, (2005), Wisła, (2012),
Sierotowicz, (2015, 2017).
There is no doubt that innovation is a process not only
complicated but above all complex. The traditional
scientific approach used to describe new and
unrecognized phenomenon was based on
reductionists methodologies. Such approach, used
commonly in XX century, mainly consisted in
searching for the most important components of the
Ambiguity of Innovation Typology in Innovation Measurement: Towards a Unified Typology of Innovation and Measurement Model
complicated phenomenon, and then reducing its
description to elements considered to be common.
This approach raised discussion what are the common
elements which describe in a very limited particular
phenomenon taken under research. Different
arguments and experience provide not only common
characteristic, but many different concepts,
typologies and approaches to the same phenomena.
Discussion continues over three decades and still
there is no way to achieve the consensus. There is no
issue related to methodology, but rather inadequate
methodology used to describe not only complicated
but complex phenomena as the innovation
development process is. According to complexity
theory, Richardson (2008), Cimini et al., (2017), the
phenomenon is not only complicated but complex
when consists of elements, where each of these
elements is also complex. The innovation
development process is definitely complex
phenomenon, since people, (scientist, researchers,
engineers and entrepreneurs) taking part of it
Espinosa et al., (2017). That is the point of novelty
presented in this paper. If innovation development
process is complex, then in order to describe it more
deeply and in constitutive way, the complexity theory
paradigms, Cicmil et al., (2017), Espinosa et al.,
(2017), along with mutatis mutandis methodological
approach was used. There is no reason to identify
common components, because each innovation
development process is different. In the complexity
approach, it should be rather identified those, which
constitute innovation development process, which
satisfy the condition sine qua non of the studied
phenomenon. In the theory of complexity, it is clear
that a comprehensive description of the complex
phenomenon is not possible. However, without
reducing the phenomenon to several elements, it is
possible to indicate the ones that constitute this
phenomenon and create unifies spectrum of
innovation development process and innovation
measurement model.
A properly designed innovation measurement system
(to which analysis of patent data belongs) cannot rely
solely on commercialization output values, but must
also include input values. Two main stages need to be
distinguished while preparing the innovation
measurement system:
1) an analysis of the potential inputs and benefits
that can be gained as a result of the achievement
and commercialization of the generated added
value; and
2) measurement and analysis of inputs and benefits
gained in real time, when implementing a
specific innovation development project.
In the first stage, the potential value of innovation
requires analysis for the two phases of the planned
innovation development project:
investments, expenditures, and costs, often
incurred over many years, relating to the ex ante
phase in the area of commercialization; and
the benefits that can be achieved in various
forms of commercialization of the generated
added value, and therefore taking place in the ex
post phase.
This stage of analysis should take into account all
possible forms of ex ante analysis, enabling as
precisely as possible the prediction of various
scenarios for the development of innovation. There is
therefore room for appropriately selected
econometric analyses, foresight analyses, SWOT
analyses, as well as analyses aimed at indicating the
sources of financing for the project, the ways and
costs of acquiring the sources, the risk of innovation
development failure, the needs and expectations of
the market concerned, the absorption capacity of the
target market, and many other methods
and techniques known in the field of
project management (PMI, 2013). It should be noted
that commercialization is also a cost factor for the
Figure 5: Two stages of innovation measurement model.
FEMIB 2020 - 2nd International Conference on Finance, Economics, Management and IT Business
innovation development process (Figure 5). This is
the input value of the innovation measurement model,
which belongs to this model (Figure 5). In order to
achieve the highest level of efficiency, script variants
of commercialization should be developed for both
radical and incremental innovation. Therefore, the
demarcation line between the ex ante and ex post
stages, in this analysis, is not located on moment of
implementation but before choosing the most
effective form of commercialization (Figure 5).
It may turn out that the launch of a new innovation
development project on the basis of invention,
combined with patents already owned, enables the
development of radical innovation, whose effects,
after analysis, show an achievable, and many times
higher efficiency level than simple implementation of
the final product constituting incremental innovation.
Hence, in this case, it seems necessary to analyze the
patent gap Okoń-Horodyńska et al., (2012).
In the second stage, the innovation measurement
model is used to analyze, on the basis of real data, the
actual projects (or portfolios) of the innovation
development. At this stage, the criterion of division
into ex ante and ex post stages is the area of
commercialization. It seems useful in this case to
periodically carry out an analysis of the trajectory of
innovation development, which, in the ex ante phase,
has to answer the following question: is the goal that
was set at the start of the project still achievable in the
same form? This is the question pertains to both
competition activities, and thus the early
implementation of the assumed innovation by
competition, as well as the estimation of the
achievement of the goal. In addition, when measuring
and analyzing in real time, the specificity of the
measurement is different. In the Oslo Manual (2018),
the difference is defined as a subjective and objective
approach. The measurement based on actual data is
obviously stretched, because it covers the life cycle of
a given innovation in a socioeconomic environment.
The demarcation point that marks the end of this stage
is dependent on the form of commercialization. It will
be designated differently while licensing and when
the product (or service) is deployed to the target
In both the ex ante and ex post stages of the
innovation measurement model, where
commercialization is the demarcation area, it is
possible to determine the type of innovation as the
objective to be achieved within the project of
innovation development. In the presented concepts of
innovation typology, the main difficulty was in
unambiguously defining the division criterion which
determine position of demarcation line without
deprived of the significative drift between the
different types of innovation. Moreover, the vast
majority of the presented concepts are based on ex
post factors in relation to the implementation. In the
presented concept of innovation typology, it is
proposed that the demarcation criterion be unified in
order to distinguish between radical and incremental
innovation, both ex ante (in the stages of initial
analysis, where the goal to be achieved is set within
the design of the innovation development project), as
well as ex post related to the fact of
commercialization, with the distinction between these
as follows:
radical innovation is the introduction of a new-
i.e. absent so far-type of product, service,
method, process, or model (including business
model) to the socioeconomic environment,
regardless of the form of this introduction
(commercialization) or the geographical area
incremental innovation is the introduction of a
new, improved version of an existing product,
service, method, process, or model (including
business model) to the socioeconomic
environment, regardless of the form of this
introduction (commercialization), the
geographical area concerned, or the nature of
improvement (single or cumulative).
In addition to the proposed demarcation line
between types of innovation, the proposal includes a
demarcation line that allows for the distinction
between incremental innovation and minor changes,
modifications, and improvements that may be
cumulative. The criterion for this distinction is that
minor changes, modifications, and improvements
belong to the kaizen sphere, and, even being
cumulated, do not lead to the introduction of a new
version of an existing product, service, method,
process, or model (including business model) to the
socioeconomic environment. In other words, the
demarcation line, which is the boundary between
what is innovation and what is not yet, is outlined by
the kaizen concept Imai 1986), Ortiz (2009) and
Maurer (2012). Where kaizen ends, incremental
innovation begins. On the other hand, on the other
side of the innovation area, radical innovation is not
limited, except by the level of possessed knowledge,
technical and technological capabilities, and
imagination of the creators. The presented proposal
makes it possible to clearly identify the type of
innovation (Figure 6):
radical, and
Ambiguity of Innovation Typology in Innovation Measurement: Towards a Unified Typology of Innovation and Measurement Model
The introduction of the presented typology with the
ex ante and ex post stages constitutes the unification
of considerations concerning the type of innovation.
It forces a clear definition of the type of innovation
that is to be developed as added value, at the early
stages of planning and designing the innovation
development project, which will remain relevant
during project implementation.
Figure 6: Two stages of innovation measurement model.
At the same time, the innovation measurement model,
being a part of the presented innovation measurement
model, must be flexible, which should be reflected in
the systematic analysis of the socioeconomic
environment for the presence of such or similar
innovations, and including the analysis of patent-
related gaps. It seems that, in the age of globalization,
and with the increasing availability of information,
the inclusion of the geographical factors in the
innovation typology systematically loses its
The definition of innovation shows that
implementation is a sine qua non of innovation Oslo
Manual (2018). The fact it has been noted allows you
to move onto the next stage, which is the
identification of the innovation type. Hence, the
presented typologies of innovation are built on the
basis of the ex post stage in relation to the
implementation. The exception to this rule is the
division into areas that relate to innovation, that is, the
product, process, organization, and marketing areas
Oslo Manual (2018). This kind of typology can be
used both in the ex ante and ex post stages of the
multidimensional development of innovation.
However, this kind of typology does not help to carry
out an analysis of the expected ex post effects that
should be made in the ex ante phase, which is
essential at the stage of planning and designing of the
innovation development project Cicmil et al., (2017).
It does not answer the question: what kind of impact
will the innovations planned in the strategy have on
the economic and social environment? At the same
time, modern companies, both small and global, are
developing innovations within individually designed
innovation development projects, which comprise the
innovation process as a whole, and therefore consist
of ex post and ex ante stages in terms of
Within the typology of innovation,
implementation is a hotly debated form of
commercialization of innovation. Innovation also
takes place when the intellectual property value
developed in the course of a project has been
protected by law, and then, for example, licensed.
Hence, when talking about innovation, it should not
be linked to implementation as a specific demarcation
line between what is ex ante and what is ex post. In
fact, design work is about generating value that
resembles a growing wave of values, where some of
it is isolated and restricted by patent regulations, and
then commercialized, for example, by licensing. The
phenomenon of incremental wave of added value
pertains to any type of innovation development
project. This is evidenced by the fact that such
projects are one of the most important sources of
generating innovative ideas Drucker (2006), Bessant
et al., (2015). On the other hand, not every value is
used in the further design work. Therefore, it is
important to discuss the area of intellectual property
commercialization, since, for example, patents can be
commercialized in various forms and times, not
necessarily in the form of a final product. Hence the
proposed demarcation area between ex ante and ex
post stages in the innovation process.
Commercialization should be professionally
managed Govindarajan et al., (2010). Hence, at
leading global corporations, you can find a separate
intellectual property management department that has
its own strategy. The tasks of this department relate
not only to the commercialization of intellectual
property, but also to their acquisition from external
sources through acquisitions, mergers, acquisition of
patent rights to selected inventions, transfer of
completed technologies, and development processes
in progress IBM (2001, 2005, 2010, 2016). The
processes of acquiring and commercializing
intellectual property, and indeed intellectual property
management strategies, are therefore part of the
routine functioning of the corporation.
In practice, the proposed typology of innovation and
the innovation measurement model means that the
complex and systematic (sustaining) development of
FEMIB 2020 - 2nd International Conference on Finance, Economics, Management and IT Business
incremental innovation seems to be faster to achieve,
to require less investment, and, in combination with
the patent gap analysis, seems to serve as a tool
offering competitive advantages to both the enterprise
and the national economy. The conceptual framework
of the innovation measurement model arose from the
proposal of one consistent typology of innovation.
Both a consistent typology of innovation and a
conceptual framework of the innovation
measurement model are the results achieved in the
first phase of the conducted research. The future
research will be the second phase of the design
process, where the most suitable mathematical
analysis will be selected and performed based on
empirical data related to the innovation development
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