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Scientists and practitioners working in the areas of economics and management – the
world’s first MBA programme was established in Harvard Graduate School of Business
Administration in 1908 thus giving start to new applied field of social sciences i.e.
management (Harvard Business School, n.d.), although salaried managers as an identifiable
business group became prominent in the late 19th century (Khurana, 2007), – mainly have
pursued a different angle of the innovation studies than sociologists. They concerned more
with the technological side of business related innovation. Despite that the concepts of
labour productivity and economic growth took central place in early economic theories, the
research of economic change evolved in economics in the way of techno-economic studies –
challenged by emergent of machinery industry resulted from the Industrial Revolution – as a
cause of economic growth. Moreover scientific breakthrough in chemistry and physics
which have opened the floodgates to their application in business throughout the second
wave of the Industrial Revolution greatly aided the development of technologicallyadvanced
extractive and manufacturing industries or primary and secondary sectors of
economy. The enormous expansion of rail and steamship transportation, telegraph and
telephone lines (“Inventions”, n.d.) in the mean time stimulated unprecedented growing
goods traffic, movement of people and ideas, which has challenged contemporary economic
globalization.
The way innovation is internationally approached in the modern economics and business
management resources and other sources are significantly influenced by the contribution of
the outstanding evolutionary economics theorist Schumpeter into study of innovation and
entrepreneurship in the context of socio-economic development. According to Freeman,
(2009, pp.126) “the central point of his whole life work *is+: that capitalism can only be
understood as an evolutionary process of continuous innovation and ‘creative destruction’”.
In The theory of economic development, the work first published in German in 1911,
Schumpeter (1934/1983, pp. 66) based on “five cases” elaborated a concept of “new
combination”. Later on the concept of “new combination” was incorporated into the
concept of “innovation” by “saying that innovation combines factors in a new way or that it
consists in carrying out New Combinations” (Schumpeter, 1939, pp. 84). In recent decades
the above-mentioned “five cases” have been treated as Schumpeter’s proposed five types
of innovation in the innovation related economic and business literature, for instance (OECD
& Eurostat, 2005; Godin, 2008; Kotsemir, Abroskin, & Dirk, 2013). However, in my opinion,
Schumpeter expressly set down namely four types of innovation perhaps in the best known
last fundamental work Capitalism, Socialism, and Democracy in the chapter named The
Process of Creative Destruction:
The fundamental impulse that sets and keeps the capitalist engine in motion
comes from the new consumer’s goods, the new methods of production or
transportation, the new markets, the new forms of industrial organization that
capitalist enterprise creates. (Schumpeter, 1942/2003, pp. 83).
It is remarkable that above-quoted attributes of the “capitalist engine” are actually
coincident with the types of innovation distinguished by OECD and Eurostat (2005, pp. 47):
product innovation, process innovation, marketing innovation and organisational
innovation.
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