How Does the Oslo Manual Distinguish Between Product and Process Innovation?

The Oslo Manual distinguishes between product and process innovation by defining them as follows:

Product Innovation

Definition: A product innovation is the introduction of a good or service that is new or significantly improved compared to previous products. This includes enhancements in technical specifications, components, materials, software, user friendliness, or other functional characteristics[3][4].
Scope: This type of innovation focuses on changes to the goods and services offered by a business. It can involve entirely new products or significant improvements to existing ones[4].

Process Innovation

Definition: A process innovation involves the implementation of a new or significantly improved production or delivery method. This includes changes in techniques, equipment, and/or software used in the processes[4].
Scope: The Oslo Manual’s latest edition redefines process innovation to include business process innovations. This encompasses not only traditional process innovations but also organizational and marketing innovations as part of a broader category[2][3].
Components: Business process innovations are mapped onto business functions and include improvements across various operational activities within a firm[2].

This distinction helps in systematically categorizing innovations based on whether they alter the products offered by a business or the processes used to create and deliver these products.

Innovation Framework

An innovation is a new or improved product or process (or combination thereof) that differs significantly from previous products or processes and has been introduced on the market or brought into use by the firm.

• Product innovation: A new or improved good or service introduced to the market.
• Business process innovation: A new or improved business process implemented within the firm.

Innovation can and should be measured.

Knowledge is a basis for innovation.

An innovation must be new or significantly improved compared to what was previously available.

An innovation must have potential utility or actual use.

Value creation or preservation are the goal of innovation.

An innovation MUST be implemented, which differentiates it from concepts like invention.

The manual provides a taxonomy of business functions that can be subject to innovation.

All developmental, financial, and commercial activities undertaken by a firm intended to innovate.

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