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The simplest way to categorize innovation is into two types – incremental and radical.    Incremental innovation is an improvement in an existing thing (e.g. product, process or service).  Radical innovation is finding an entirely new way of doing something.  For example if you had been making spectacles in the 1950s then plastic lenses instead of glass lenses would have been an incremental innovation. Contact lenses or laser eye surgery would have been radical innovations.  Some writers include a third category – disruptive innovation, where the entire industry is disrupted (e.g. Uber) but it seems to me that this is just a variant of radical innovation.