What is Innovation?

Having ideas is simple, having good ideas is more complicated, but what really constitutes a strategic challenge for companies is to continually generate good ideas and convert them into products or services with commercial success in the market. This is what is known as product or service innovation. But it is also innovated by modifying the way things are done within the company, redefining or incorporating new management and/or communication processes.

The Oslo Manual (OECD, 2005), a bibliographic reference on innovation, defines the following four types of innovation:

  • Innovation in products/services: Introduction into the market of new (or significantly improved) products or services. It includes significant alterations in technical specifications, components, materials, the incorporation of software or other functional characteristics.
  • Innovation in process: Implementation of new (or significantly improved) manufacturing, logistics or distribution processes.
  • Organisational innovation: Implementation of new organisational methods in the business (knowledge management, training, evaluation and development of human resources, value chain management, business re-engineering, quality system management, etc.), in the organisation of work and/or in external relations.
  • Marketing innovation: Implementation of new marketing methods, including significant improvements in the merely aesthetic design of a product or packaging, price, distribution and promotion.


All companies in one way or another innovate, as their competitiveness and continuity depend on it. However, few companies are aware that they do so. There are various situations in which companies are aware that they innovate but have no control over it, that is to say, they undertake innovations generally in a punctual manner or if it is in a habitual manner driven by customer or market demands without anticipating such demands. Innovation, like any business process, can be managed and controlled and it is this control that helps to maximise the results of the resources invested.


Innovation makes it possible to take advantage of resources to obtain greater economic, social and/or reputational benefits. Therefore, it is essential to be at the forefront of needs and trends, as well as using tools to optimize processes, offer new products or services and position yourself strategically in the market.

Business innovation is not a fashion or an option for companies, but a real need in a society that advances by leaps and bounds and that needs companies that advance, at least, at the same speed. Among the most important reasons for undertaking an innovation process are:

  • Customer focus. Companies that bet on innovation are characterized by offering the market, more or less continuously, new products or services in order to meet the changing needs and expectations of their customers. To do this, it is essential to continually look at the market to know exactly what is being demanded. Also, listening to your customers will make them feel considered, which will improve your positioning even more.
  • Another important perspective of innovation is its ability to become a true source of business cost savings. The innovation in the processes of the companies can allow to improve of notable form the efficiency of the same ones, allowing to optimize the used resources. This saving can be important to improve profitability levels, even being the key to the design of more competitive pricing strategies.
  • When the offer of products and services is as wide as the current one, it is necessary for companies to differentiate themselves from the competition by contributing different things to the market, not only at the offer level, but also in other areas such as marketing, communication, etc.
  • Contribution of innovation to talent retention. In general, the motivation of the staff is usually higher in innovative companies, so the feeling of belonging also improves.
  • Survival in the market: if a company does not innovate in order to evolve continuously, it is doomed to failure, as it will lose its level of competitiveness to other companies that do.


Public administrations are aware of the effort involved in managing innovation for companies, as well as its importance for their competitiveness and, therefore, for the development and growth of the territory in which they carry out their economic activity. That is why they set aside funds to set up support programmes for these activities, thus encouraging organisations to undertake this type of initiative.

There are various funding schemes drawn up by regional, national and European administrations, responding to the priorities of each of these bodies. Any company that meets the particular criteria of each programme (usually related to size and sector of activity) can submit a proposal and benefit from these grants, which usually consist of non-refundable grants, low-interest loans with a non-refundable tranche or access to facilitating tools.

In La Rioja, subsidies are called for and managed by the Economic Development Agency of La Rioja (ADER), which offers various financing instruments depending on the degree of maturity of the project and the specific needs of the companies.

At the national level, the reference organization is the Centre for Industrial Technological Development (CDTI), which promotes innovation and technological development in Spanish companies, channelling requests for funding and support for R&D&i projects of Spanish companies at national and international level.

At European level there are different financing programmes, among which the framework programmes stand out, multiannual instruments that are divided into different themes depending on the priorities of the European Commission for each period. These programmes contain a wide variety of instruments, the main objective of which is transnational collaboration and access to the single European market.

Posted on 26 October, 2018 in Categoría1

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