Clayton Christensen of Harvard Business School has identified three broad forms of innovation that make firms – and ultimately economies – stronger. Firms can make incremental changes to existing products, thereby becoming more competitive in an existing market segment; they can introduce products, like Sony’s iconic Walkman or Apple’s iPhone, that create new market segments; or they can develop a product – such as electricity, the car or an Internet search engine – that is so disruptive that it renders an entire sector or way of doing business almost obsolete.
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