5 Types of Innovation and How Each One Drives Growth

5 Types of Innovation and How Each One Drives Growth | Strategy and Innovation | Emeritus

Do you know that around two-thirds of the companies on the 2024 Disruptor 50 list are leveraging AI for cutting-edge innovation? 

Disruptive Innovation is just one of the different types of innovation, where each technique has a unique way of driving growth. From small, incremental improvements to major disruptive changes, understanding these different kinds of innovation is key to unlocking a business’s full potential. In this blog, we will be covering 5 of the most common innovation techniques that you can use to improve the scalability of your organization.

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1. Incremental Innovation

Incremental innovation refers to a series of small improvements or upgrades made to a company’s existing products, services, or processes. Incremental innovation is just one of the many types of innovation that focuses on optimizing what is already working, making it more efficient, cost-effective, and user-friendly. Moreover, this type of innovation helps maintain or improve a product’s market position, ensuring sustained consumer interest and competitive differentiation.

Incremental innovation is often driven by customer feedback and emerging trends. Companies use it to fine-tune their offerings, ensuring they stay relevant. As a result, it allows businesses to make steady progress without the significant risks associated with more radical changes. 

Examples of Incremental Innovation

1. Apple

A classic example of incremental innovation is Apple’s approach to its iPhone. Each new model introduces slight enhancements, such as better cameras, improved battery life, or advanced software features. These changes keep customers engaged and willing to upgrade, ensuring a steady stream of revenue.

2. Toyota

Another example is in the automotive industry, where companies such as Toyota continually improve their vehicle models. Features such as enhanced fuel efficiency, safety advancements, and infotainment upgrades represent incremental innovations that keep their cars competitive in a crowded market.

2. Disruptive Innovation

Disruptive innovation fundamentally changes the market by introducing new products or services that disrupt existing ones. This type of innovation often starts in niche markets but eventually overtakes established market leaders. 

Disruptive innovations often catch established companies off guard because they target overlooked segments or create entirely new markets. These innovations typically prioritize ease of use, affordability, and accessibility, making them appealing to a broader audience. Over time, as the technology and market mature, disruptive innovations can displace established products and reshape entire industries.

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Examples of Disruptive Innovation

1. Netflix

Netflix exemplifies disruptive innovation by reconfiguring its business model around machine learning. By doing so, it can explore estimation techniques for predictive modeling and implement them in real-world settings. Netflix also combines multiple types of innovation such as the Bayesian deep learning with machine learning to meet new market demands.

2. Amazon (AWS)

Amazon AWS exemplifies disruptive innovation by reconfiguring traditional IT infrastructure into scalable, on-demand cloud services. In particular, Amazon’s process of using press releases and FAQ documents to clarify customer needs underpins its innovation strategy. Moreover, this method facilitates rapid experimentation and iteration, allowing AWS to provide flexible, pay-as-you-go services. As a result, businesses can scale quickly and cost-effectively, defraying the costs of innovation and embracing failures as learning opportunities. Ultimately, AWS’ architecture revolutionizes how companies manage IT resources, enabling swift adaptation and growth in a dynamic market environment.

3. Architectural Innovation

Architectural innovation involves reconfiguring existing technologies and components in new ways to create novel products or services. It leverages the existing knowledge base but rearranges the way components interact. This is just one of the many types of innovation that can open up new markets and applications, targeting consumers who previously did not purchase the product.

Architectural innovation often focuses on improving the design and integration of existing components rather than inventing entirely new ones. By rethinking how these components are assembled, companies can create products that offer new functionalities or appeal to different customer segments. 

Examples of Architectural Innovation

1. Google Tilt Brush

Google Tilt Brush is an instance of architectural innovation where 3D painting application is made using VR and artistic tools. Subsequently, it reimagines traditional painting, allowing users to create immersive, three-dimensional artworks with elements such as light and fire. In essence, this integration with VR systems revolutionizes artistic expression, showcasing how reconfiguring existing technologies can expand creative possibilities.


NVIDIA graphics technology is a great example of architectural innovation. Initially designed for rendering graphics in gaming, NVIDIA adapted its architecture to support parallel processing, making them highly effective for tasks like AI, machine learning, and data analytics. This reconfiguration expanded their use beyond gaming, opening up new markets in scientific research, autonomous vehicles, and healthcare. 

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4. Radical Innovation

Radical innovation introduces groundbreaking changes and creates entirely new industries. Initially, it involves high risk and substantial investment, but eventually, can lead to significant breakthroughs. In other words, radical innovation is often technology-driven, leading to products and services that were previously unimaginable and opening up new markets.

Besides, radical innovations are characterized by their ability to redefine industries and create new market leaders. Notably, these innovations often require significant resources, long development timelines, and a willingness to take substantial risks. When such businesses are successful, they can provide unparalleled competitive advantages and establish new benchmarks for performance and functionality.

Examples of Radical Innovation

1. Metromile

Metromile represents radical innovation in auto insurance by introducing a pay-per-mile model that tailors premiums to actual driving habits. Additionally, unlike traditional insurance, which often leads to overpayment, Metromile uses telematics to calculate precise costs, saving customers an average of 47% annually. Furthermore, their app enhances user control with features like trip tracking, and car health diagnostics. They also boast a 92% stolen car return rate. 

2. Aricept

Microsoft Azure represents a radical innovation in digital solutions. It enables businesses to deliver flexible customer experiences, enhance teamwork, and adapt to new business models with a complete cloud innovation ecosystem. Azure offers features like AI-driven app creation, data modernization, and mixed reality. Its cloud-powered insights help predict and meet customer needs. Key features include AI for analyzing images and speech, confidential computing for data security, and development tools for building and modernizing apps.

5. Open Innovation

Open innovation emphasizes collaboration with external partners to drive creativity and speed up the innovation process. By the same token, this approach leverages external ideas and technologies, fostering a culture of shared knowledge and mutual growth. In a similar vein, open innovation is one of the many types of innovation that recognizes that groundbreaking ideas can emerge both internally and from external sources.

Open innovation involves both inbound and outbound strategies. For example, inbound innovation refers to incorporating external ideas, technologies, and knowledge into the company’s innovation process. Conversely, outbound innovation involves sharing internal resources and technologies with external partners. In the long run, this approach allows companies to benefit from a broader range of expertise and resources, accelerating the development and commercialization of new products and services.

Examples of Open Innovation

1. Procter & Gamble

Samsung Innovations, launched in late 2022, engaged students from three Warsaw universities in Design Thinking workshops. The program, running from December 2022 to May 2023, aimed to discover talent and promote Samsung’s R&D institute.Workshops culminated in contests for innovative smartphone technology ideation. Final projects, presented on June 12, included a Virtual Assistant (1st place), CatchMyBus app (2nd place), and Mental Mentor ecosystem (3rd place). 


Organizations worldwide leverage external perspectives, expertise, and enthusiasm to cut costs, speed up projects, boost creativity, and engage stakeholders more effectively. NASA follows suit by collaborating with diverse entities both nationally and internationally. They currently report 32 active citizen science projects and have 103 citizen scientists named as co-authors. An example of open innovation is NASA’s return to the Moon, a step-by-step program aiming to establish the 21st-century Artemis Base Camp at the lunar South Pole. Another example is the Mars Ice Mapper mission, that is estimated to launch at around 2026. In this project NASA will partner with international space agencies and academia to map ice deposits on Mars, enhancing our understanding and future exploration potential.

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How Innovation Drives Growth

Innovation is a powerful driver of economic growth. Companies that invest in innovation can create new products and services, improve productivity, and stimulate economic growth. In fact, according to the Global Innovation Index, Switzerland, United States, Sweden, United Kingdom, Netherlands have highest innovation input and output in the world. Majority of the companies from these nations implement modern innovation techniques to redefined their busines models, and improve productivity and scalability in new market conditions.

A. Creating New Markets

Innovation creates new markets by introducing unique products or services that meet previously unaddressed needs. For instance, the advent of smartphones opened up the app development industry, leading to countless new businesses and opportunities. Therefore, by continually innovating, companies can tap into new customer segments and expand their market reach.

B. Enhancing Productivity

Innovations streamline processes and improve efficiency. For instance, automation technologies have transformed manufacturing, reducing costs and increasing production rates. Consequently, enhanced productivity allows businesses to scale operations and meet growing demands. This not only boosts profitability but also positions companies to compete more effectively in the global market. However, companies must consistently evaluate and adopt emerging technologies and different types of innovation to maintain a competitive edge.

C. Diversifying Revenue Streams

Innovation enables companies to diversify their revenue streams. By developing new products or entering new markets, businesses can reduce their dependence on a single source of income. Furthermore, this diversification enhances financial stability and growth potential. In essence, companies that innovate continuously are better equipped to adapt to market changes and mitigate risks associated with relying on a single product or service.

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Types of Innovation Strategies for Fostering Innovation Within Your Organization

1. Invest in Research and Development 

Allocate resources to R&D to drive technological advancements. Continuous investment in R&D is crucial for staying ahead of competitors and developing innovative solutions. In addition, companies should diversify their R&D efforts by exploring different types of innovation to maximize their potential for growth and success.

2. Embrace Failure as a Learning Tool

View failures as opportunities to learn and improve. Likewise, encourage employees to experiment and take calculated risks without fearing negative consequences. This strategy supports the idea of adding value to products or services by iterating and refining ideas based on real-world feedback, ultimately fostering an environment conducive to various types of innovation.

3. Leverage Customer Feedback

Use customer insights to guide innovation efforts. Involve customers in the development process to ensure products and services meet their needs and expectations. This method helps in increasing productivity and ensuring that innovations resonate with the target audience.

4. Adopt Agile Methodologies

Implement Agile practices to enhance flexibility and speed in innovation processes, fostering a culture that embraces new approaches. In short, Agile methodologies allow for iterative development and quick adjustments based on feedback. As such, this strategy ensures that different types of innovation are continually refined and improved, keeping the business competitive.

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5. Use Data-Driven Decision-Making

Base innovation strategies on data and analytics for better outcomes, fostering a culture that embraces different types of innovation. Furthermore, leverage data to identify trends, customer preferences, and areas for improvement. Ultimately, this approach enhances the effectiveness of innovation by ensuring decisions are informed and strategic, leading to better market fit and success.

6. Form Strategic Partnerships

Collaborate with other organizations to co-create solutions. Because strategic partnerships can provide access to new technologies, markets, and expertise. This collaboration is key to the concept of open innovation, leveraging external ideas and technologies to drive growth and efficiency.

ALSO READ: Mastering Horizontal Integration: Your Ultimate Guide for Business Growth

In conclusion, integrating innovation into your corporate strategy is essential for sustained growth and remaining competitive in changing markets. A strategic approach to various types of innovation is vital for professional and organizational success. Explore Emeritus’ online strategy and innovation courses to create an innovation roadmap that will help your organization scale new heights. Embrace innovation to unlock new opportunities and secure a prosperous future for your business today!

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About the Author

Content Writer, Emeritus Blog
Niladri Pal, a seasoned content contributor to the Emeritus Blog, brings over four years of experience in writing and editing. His background in literature equips him with a profound understanding of narrative and critical analysis, enhancing his ability to craft compelling SEO and marketing content. Specializing in the stock market and blockchain, Niladri navigates complex topics with clarity and insight. His passion for photography and gaming adds a unique, creative touch to his work, blending technical expertise with artistic flair.
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