Many people use the words invention and innovation interchangeably. Do they really have the same meaning? It is important to note that there exists a subtle difference between these two words. Invention is defined as the occurrence of original ideas for products or for processes, whereas innovation is defined as the practical application of new inventions into profit-making products or services. There is a possibility that some inventors have come up with an idea that has no practical application at all. However, all companies are only interested in those activities that actually play a significant role in achieving growth, profitability, commercialization, market entry, and monetization. Therefore, it is innovation rather than invention in actuality that makes a huge difference.
Invention is mostly associated with a single product or process, whereas innovation often comprises a combination of products and processes that allows new ideas to be converted into a profitable business. Let’s take a simple example to illustrate the difference between invention and innovation and also to prove the importance of monetizing an invention by converting it into innovation. The company ‘Xerox’ was an excellent inventor as they were the first company to develop a personal computer. But they lacked the talent to transform such a brilliant invention into innovation which led to their downfall. However, IBM had the skill and talent to transform the magnificent innovation of IBM PC into exorbitant business profits and emerged as the market leader.