Competitiveness of the EU dairy industry

Competitiveness of the EU dairy industry

2.2 Innovation: definition

In addition to the competitiveness the performance in innovation is analysed.

Many authors base their innovation studies on Schumpeter's theories and many

publications modify his typology just slightly. We also follow that approach, as

does the OECD.

In this study innovation is defined as an

'implementation of a new or significantly improved product (good or service),

or process, a new marketing method, or a new organisational method in

business practices, workplace organisation or external relations' (OECD,


According to Joseph Schumpeter, the five types of innovation are (see

OECD, 1997, p. 16):

1. product innovation

the introduction of a new good (or service)- that is one with which consumers

are not yet familiar- or of a new quality of a good;

2. process innovation

the introduction of a new method of production, which need by no means be

founded upon a discovery scientifically new, and can also exist in a new way

of handling a commodity commercially;

3. marketing innovation

the opening of a new market that is a market into which the particular

branch of manufacture of the country in question has not previously entered,

whether or not this market has existed before;

4. organisational innovation

the introduction of an adapted organisation, like cooperation with customers,

suppliers or knowledge centres;

5. the conquest for a new source of supply of raw materials or halfmanufactured


again irrespective of whether this source already exists or whether it has

first to be created- element not mentioned in the OECD's typology.

Most types are divided into sub-categories. These are presented in chapter

5 and discussed in Batowska (2008).

Cases are selected if they meet following criteria:

1. an innovation, as mentioned in above; and


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