In the dynamic world of business and technology, the terms innovation and invention are often used interchangeably, yet they embody distinct and complementary processes. While invention refers to the creation of novel ideas, methods, or products, innovation involves the successful application and commercialisation of these ideas into marketable goods or services. Distinguishing between these concepts is crucial, as their interplay underpins technological progress, business competitiveness, and societal transformation (Fagerberg et al., 2005).
Defining Innovation and Commercialisation
Innovation is broadly defined as the process of translating an idea or invention into a product, service, or process that creates economic or social value. Schilling (2017) highlights that innovation represents the implementation of new ideas, processes, or technologies to achieve improvements in efficiency, performance, or competitive advantage. Innovation can be categorised into:
- Incremental innovation: small, continuous improvements, such as regular software updates.
- Radical innovation: breakthroughs that disrupt industries, such as the emergence of smartphones (Tidd & Bessant, 2020).
By contrast, commercialisation refers to the journey of transforming an idea into a market-ready product or service. This process extends from concept development and prototyping to marketing, distribution, and adoption by consumers. Rogers (2003) describes commercialisation as the pivotal stage where technological potential becomes tangible economic value. Without successful commercialisation, even groundbreaking inventions remain dormant.
Challenges of Innovation and Commercialisation
Despite its importance, commercialising innovation is fraught with challenges. Scholars and practitioners identify several recurring barriers that businesses face:
1.0 Financial Constraints
Research and development (R&D), prototyping, and marketing demand substantial resources. Small and medium-sized enterprises (SMEs) in particular often face capital shortages (Hölzl, 2009). Venture capital or government funding may help bridge gaps, yet uncertainty about returns deters many investors (Dechenaux et al., 2008). For example, many biotech start-ups fail due to the high costs of drug trials before market approval.
2.0 Limited Expertise
Commercialisation requires multidisciplinary expertise spanning engineering, market analysis, regulatory compliance, and business strategy (West & Bogers, 2014). Firms lacking such breadth risk market misalignment. For instance, Google Glass was an impressive invention but failed in commercialisation due to poor understanding of consumer needs and privacy concerns (Baycan & Stough, 2013).
3.0 Scaling Issues
Even when an innovative product is validated, scaling production and distribution to meet demand can be daunting. Challenges include limited manufacturing capacity, supply chain complexities, and quality control (Nooteboom, 1994). Tesla, for example, struggled with scaling production of its Model 3, highlighting the difficulty of aligning innovation with operational capacity.
4.0 Market Entry Barriers
Entering established markets involves overcoming barriers such as customer acquisition, brand trust, and regulatory hurdles (Freeman & Soete, 1997). Larger incumbents can leverage economies of scale and brand loyalty to deter new entrants. In sectors like pharmaceuticals, regulatory approval alone can delay commercialisation for years.
Defining Invention and Its Creation
Invention is the creation of a novel device, method, or composition that did not previously exist (O’Sullivan & Dooley, 2009). It represents the initial breakthrough that seeds innovation. Inventions may stem from individual creativity, scientific research, or collaborative problem-solving.
The invention process typically involves:
- Idea Generation – novel concepts inspired by curiosity, necessity, or problem-solving (Fagerberg et al., 2005).
- Research and Development (R&D) – testing, refinement, and validation to transform abstract ideas into feasible prototypes (Schilling, 2017).
- Prototyping and Testing – iterative experimentation to assess functionality and market fit (Tidd & Bessant, 2020).
- Intellectual Property Protection – patents and trademarks secure exclusivity, allowing inventors to reap financial benefits and deter imitation (Sichelman, 2009).
For instance, the invention of the light bulb by Thomas Edison was only one step; widespread innovation occurred when electricity distribution systems enabled its commercial adoption.
The Relationship Between Invention, Innovation, and Commercialisation
Although distinct, invention, innovation, and commercialisation form a continuum. Invention is the spark, innovation is the flame, and commercialisation is the fuel that sustains growth (Markman et al., 2009). Without invention, there is no foundation for innovation; without commercialisation, inventions lack societal impact.
Examples illustrate this dynamic:
- The iPhone: Apple did not invent the mobile phone but innovated by integrating touchscreens, app stores, and design, successfully commercialising it into a global product.
- Bioprinting: While 3D bioprinting is an invention, its commercialisation faces hurdles including regulatory approval, cost, and ethical considerations (Boni, 2018).
Strategies for Successful Commercialisation
Scholars propose frameworks for overcoming commercialisation barriers:
- Open Innovation: Collaborating with external stakeholders (universities, customers, suppliers) enhances knowledge and resources (Bogers & West, 2010). For example, Procter & Gamble’s “Connect + Develop” programme harnesses external ideas for product innovation.
- Intellectual Property Management: Patents and licensing agreements ensure appropriability of returns, crucial for industries with high R&D investment (Nerkar & Shane, 2007).
- Government and Institutional Support: Public policies, grants, and incubators help mitigate financial and scaling challenges. For instance, the UK’s Innovate UK scheme funds early-stage technology development.
- Market Orientation: Successful innovations align with consumer needs and preferences. Firms that continuously engage in customer-driven innovation—such as Amazon—enhance adoption rates.
Ethical and Social Dimensions of Commercialisation
Commercialisation is not purely economic; it has ethical and societal implications. Over-commercialisation of inventions can lead to monopolies, inequality of access, or environmental harm (Di Norcia, 2005). Pharmaceutical patents, for example, create tensions between rewarding inventors and ensuring affordable access to medicines. Similarly, green innovations face pressure to balance profitability with sustainability goals (Datta et al., 2015).
The distinction between invention and innovation is fundamental for understanding technological and economic progress. Invention refers to the creative act of producing something new, while innovation represents its successful implementation and commercialisation in markets. The commercialisation journey, however, is fraught with barriers including financial constraints, expertise limitations, scaling difficulties, and market entry challenges. Firms that succeed often combine intellectual property protection, open innovation strategies, strong market orientation, and external support systems. Ultimately, commercialisation determines whether inventions remain ideas in laboratories or evolve into transformative innovations shaping societies and industries.
References
Baycan, T. & Stough, R. (2013). Bridging knowledge to commercialisation: the good, the bad, and the challenging. Annals of Regional Science, 50(2), pp.367–405.
Bogers, M. & West, J. (2010). Contrasting innovation creation and commercialisation within open, user and cumulative innovation. SSRN.
Boni, A.A. (2018). The business of commercialisation and innovation. Journal of Commercial Biotechnology, 24(1), pp.7–14.
Datta, A., Mukherjee, D. & Jessup, L. (2015). Understanding commercialisation of technological innovation: taking stock and moving forward. R&D Management, 45(3), pp.234–247.
Dechenaux, E., Goldfarb, B. & Shane, S. (2008). Appropriability and commercialisation: Evidence from MIT inventions. Management Science, 54(5), pp.893–906.
Di Norcia, V. (2005). Intellectual property and the commercialisation of R&D. Science and Engineering Ethics, 11(2), pp.247–264.
Fagerberg, J., Mowery, D.C. & Nelson, R.R. (2005). The Oxford Handbook of Innovation. Oxford University Press.
Freeman, C. & Soete, L. (1997). The Economics of Industrial Innovation. Routledge.
Hölzl, W. (2009). Innovation and the performance of SMEs. WIFO Working Papers.
Markman, G.D. & Gianiodis, P.T. (2009). Supply-side innovation and technology commercialisation. Journal of Management Studies, 46(4), pp.625–649.
Nerkar, A. & Shane, S. (2007). Determinants of invention commercialisation: An empirical examination. Strategic Management Journal, 28(11), pp.1155–1166.
Nooteboom, B. (1994). Innovation and diffusion in small firms. Small Business Economics, 6(5), pp.327–347.
O’Sullivan, D. & Dooley, L. (2009). Applying Innovation. Sage.
Rogers, E.M. (2003). Diffusion of Innovations. Free Press.
Schilling, M.A. (2017). Strategic Management of Technological Innovation. McGraw-Hill Education.
Sichelman, T. (2009). Commercialising patents. Stanford Law Review, 62, pp.341–408.
Tidd, J. & Bessant, J. (2020). Managing Innovation: Integrating Technological, Market and Organisational Change. Wiley.
West, J. & Bogers, M. (2014). Leveraging external sources of innovation. Journal of Product Innovation Management, 31(4), pp.814–831.
