Austrian economist, Joseph Schumpeter (1934), described innovation over 70 years ago using five well defined principles:
- The introduction of a good (product), which is new to consumers, or one of higher quality than was available in the past.
- Methods of production, which are new to a particular branch of industry. These are not necessarily based on new scientific discoveries and may have, for example, already been used in other industrial sectors.
- The opening of new markets.
- The use of new sources of supply.
- New forms of competition, that leads to the restructuring of an industry