Technology and innovation are among the words most used by companies, governments and the press. In practice they describe different things. Technology is the knowledge and tools we use to solve problems. Innovation is putting a new idea into practice, technological or not, in a way that creates real value for people, businesses or society.
Invention, technology and innovation
An invention is the creation of something new. It only becomes an innovation when it is adopted and changes how people live or work. Many brilliant technologies never became innovations because they were expensive, hard to use or arrived too early. At the same time, many important innovations use familiar technologies combined in a new way.
Types of innovation
Product innovation: a new or much improved good or service, such as the smartphone with an app store.
Process innovation: a new way of producing or delivering, such as automating a production line or replacing in-house servers with cloud computing.
Business model innovation: a new way of making money from something that already existed, such as software and streaming subscriptions.
People also distinguish incremental innovation, which improves what exists, from disruptive innovation, which creates a new market or displaces the leaders of an industry.
Everyday examples of technology and innovation
Pix, the instant payment system launched by Brazil's central bank in November 2020, is a good example of innovation. Instant transfers already existed elsewhere, but the combination of public rules, free transfers for individuals and mandatory participation by large banks changed how Brazilians pay and get paid. Cloud computing is another case: it turned servers into a pay-as-you-go service and gave small companies access to the same infrastructure as large ones.
How innovation happens
Innovation usually comes from the meeting of research, business and public policy. Universities and research centres produce new knowledge. Startups test ideas quickly and accept the risk of failure. Large companies have the scale to bring a solution to millions of people. Governments fund research, create tax incentives and set rules that can speed up or hold back a technology.
Inside companies, innovation that works follows a similar path: identify a real problem, test a solution on a small scale, measure the results and only then expand. Buying the fashionable technology without knowing which problem it solves tends to be expensive.
The risks that come with innovation
Every innovation has side effects. New technologies can widen the gap for people without access or training, create privacy and security risks, concentrate power in a few companies and increase energy consumption. Discussing these risks is not being against technology: it is the condition for innovation to bring lasting benefits.
How to follow technology and innovation
At ByteSfera, coverage of technology and innovation spans our business and innovation, startups, science and artificial intelligence topics. To understand the long-term forces, read our guide to the future of technology as well.