What

The Austrian economist Joseph A. Schumpeter distinguished three important phases in technology development: invention, innovation, and diffusion.

Inventions is the first demonstration of the principal, physical feasibility solution. An invention is usually related to some empirical or scientific discovery, frequently measured through patent applications and statistics. However, an invention by often offers no hunts despite the technological romanticism surrounding the inventor’s human ingenuity. Even where applications are apparent, as in the frenzy surrounding the discovery of high temperature superconductivity, an invention by itself has no economic or social significance whatsoever.

Innovation is defined succinctly by Mensch (1979:123) as the point when

a “newly discovered material or a newly developed technique is being put

into regular production for the first time, or when an organized market for

New product is first created”. A distinction is frequently made between and product innovations. The former refers to new methods of production, for example, the Bessemer process of raw steel production. The latter refers to directly usable technological hardware, for instance, consumer such as video recorders and compacted disc players.

Numerous attempts have been made to discriminate between innovations that might be labeled “radical” or “basic” and others considered of

leader importance. But such distinctions are ex post rationalizations. At the

moment of innovation proper it is nearly impossible to guess the ultimate or

potentially significance of an innovation (cf. Rosenberg, 1996).

This inherent uncertainty (or inefficiency) is reflected in the fact that only a small percentage of innovations eventually “make it”. The success rate is comparable that of biological mutations. It is an essential feature of the evolutionary character of technological change, and we will return to it later when

discussing technology selection.

Diffusion is the widespread replication of a technology and its assimilation in a socioeconomic setting. Diffusion is the final, and sometimes painful,

test of whether an innovation can create a niche of its own or successfully

supplant existing practices and artifacts. Technology assumes significance

only through its application (innovation) and subsequent widespread replica-

tion (diffusion). Otherwise it remains either knowledge that is never applied,

i.e., an invention without subsequent innovation, or an isolated technological

curiosity, i.e., an innovation without subsequent diffusion.

One can elaborate on this basic framework of distinguishing between

invention, innovation, and diffusion, by identifying additional intermediary

steps and important feedbacks. Different methods of knowledge generation

can be distinguished. For example, research efforts are classified into basic

and applied research. Distinctions can also be made between research, de-

velopment, and demonstration (RD&D). Distinctions can be made between

radical and incremental innovations. The latter label is given to continu-

ous improvements that extend applications, lower costs, and transfer new

technologies into different sociocultural settings. Such continuous improve-

ments are especially important as new technologies, like all innovations, are

initially rather crude, deficient, and imperfect. Therefore considerable effort

(research, development, marketing, etc.) is required to sustain pervasive

diffusion.

Anyone who has driven a Model T Ford will appreciate that the artifact

that we call a car today is markedly different from, and definitively easier to

drive, than a similar artifact produced at the beginning of the century. Or

compare the first brand of instant coffee to the hundreds of varieties that

now cater to different tastes in such diverse places as Austria, Brazil, France,

Saudi Arabia, and the USA.

In short, nothing could be more misleading than a simple linear model of

knowledge and technology generation. To be successful, innovations must be

continuously experimented with, and continuously modified and improved.

Suppliers and users must work together; information from the marketing

department must be fed back to the research lab in order to suggest new

promising avenues for both applied and basic research. The appropriate

metaphor or model is therefore that of networks, operating to generate in-

novations and to modify and tailor them in the course of diffusion.