Product innovation

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Product innovations are in the business innovations that result from research and development or technological progress a completely new or substantially modified existing product yield. The counterparts in finance are financial innovations .


The product innovation is an innovation, i.e. a (re-) novelty ( Latin innovatio ). The innovation does not have to result in a completely new product, but can consist in the modification of an existing one. That is why Joseph Schumpeter differentiated in 1964 in his theory of economic development between “inventions” (technical inventions of a completely new product), “innovations” (implementation of an invention by a “dynamic entrepreneur”) and imitations (imitation of an innovation by the competition).


There were inventions that had cross-sectoral industrial effects ( key technologies ). These include, for example, the low-pressure steam engine by James Watt (1769), the revolver (1845), the dynamo machine (1866), the three-phase motor (1889) or the electronic computer (1946), which, as fundamental innovations, have provided product innovations in the manufacture of machine tools . As a result, there were product innovations such as the drill (1775), lathe (1797), planer (1817), milling machine (1818) and grinding machine (1874).


The product innovation can be differentiated according to various criteria. Market innovation means that a corresponding offer is available on the market for the first time . The term “absolute innovation” was coined for this. The Business Innovation refers to an offer that is itself novel only to that company, but not for the market itself. In this case one speaks of “relative innovation”. Today, three types of corporate innovation are recognized:

  • The convergent business innovation takes place in the area of ​​the core business ,
  • the divergent company innovation through initiative , controlling the influence of the most important stakeholders and extended communication as well
  • the emerging virtual corporate innovation .

All product innovations require leaving the routine and moving to new territories.

A product innovation can come from a customer request ( English market pull ) or can be traced back to a technological development ( English technology push ).

economic aspects

Product innovation is also used to meet “dynamic markets”. These dynamic markets are characterized by technical progress on the supplier side and shifts in demand on the demand side. The entrepreneur Christian Dräger has characterized the strategy of his company ( Drägerwerk ) as follows: " Market leadership through technology leadership , technology leadership through product innovation." For him, the starting point is product innovation through which technology leadership can be achieved and a company can rise to the market leader.

After the innovation inclination may be in pioneering behavior (with the chance to pioneer profits , but the greatest risk of sunk costs due to the high uncertainty on the further market development ), the behavior of the early follower (with the chance of a lower risk - because faulty production of the pioneer can be avoided - and the disadvantage of overcoming market barriers ), that of the modifier (with the chance of filling a market niche , but the risks of little leeway and high market entry barriers ), and that of the laggard (characterized by the lowest research and development costs and the smallest market risks as well as the Risk of price wars).

Product innovations give the innovator a competitive edge ; he forces the competition to react. Product innovations require the innovative products to be ready for the market , which can be confirmed by testers . The necessity for product innovation lies in the change of preferences of the consumers and in the appearance of technological trends .

See also

Literature / web links

Individual evidence

  1. Joseph Schumpeter, Theory of Economic Development , 1964, p. 100 ff.
  2. ^ Günter Fandel / Harald Dyckhoff / Joachim Reese, Industrial Production Development , 1990, p. 142
  3. ^ Günter Fandel / Harald Dyckhoff / Joachim Reese, Industrial Production Development , 1990, p. 142
  4. Werner Pepels, Lexikon des Marketing , 1996, p. 362
  5. Mario Raich / Simon L. Dolan, Beyond the comfort zone: Economy and society the day after tomorrow , 2010, p. 225 ff.
  6. Manfred Noé, Innovation 2.0: Business success through intelligent and efficient innovation , 2013, p. 1
  7. Manfred Noé, Innovation 2.0: Business success through intelligent and efficient innovation , 2013, p. 1
  8. Christian Dräger, Thoughts on Corporate Responsibility: Speeches and Writings 1974 to 2002 , 2003, p. 184