Academic work contributing to the concept of innovation is increasing by the day. A number of recent studies (Clausen, 2012; Parida et al, 2012; Piva et al, 2012; Orr and Roth, 2012; Nagji and Tuff, 2012; Govindarajan, 2012; Esty and Charnovitz, 2012) which appear in some decent journals support this view. However, in recent times, only a few of these have given an update of what is known so far with reference to the meaning (see Battistella et al, 2012; Robert and Eric, 2012; Stephenson, 2010; Harmancioglu, 2009) and types of innovation (see Carlo, 2012; Baba, 2012; Friedrich, 2010; Wilson and Doz, 2011; Damanpour, 2009). As such there is an urgent need to raise the volume of academic literature on this subject to create a deeper understanding of the concept. Against this backdrop, this paper aims to strengthen existing literature by providing an update of what is known about the meaning of innovation and the types of innovation that predominate academic literature. The paper opens with a review of works on the meaning of innovation, followed by an analysis of the dominant types of innovation. The paper ends with an analysis of the issues discussed. Direct marketing

Stephenson (2010) argues and I quote “bring up the topic of innovation and often the conversation will soon revolve around a cool, new gadget or an exciting start-up company with a revolutionary idea. If the talk is about the challenge of innovation, it usually focuses on developing something new, original and radically different”. Following up on Stephenson (2010), it appears that innovation is the change that leads to the development of new performance (Hesselbein et al, 2002) and the creation and implementation of new ideas in order to add value (Rogers, 1998). Zhang et al (2004) defined innovation as the development and implementation of new ideas by people who engage in transactions with others within an institutional context. More precisely, it is the generation of new ideas (Ling, 2002). Innovation is the introduction of new and improved products, services and processes developed for the commercialization of products and services (Gibbons, et al., 1994; see also Australia Bureau of Statistics questionnaire, Section B). For Barsky and Sims (2012), the notion of innovation conveys incremental information about economic activity far into the future. It is to a certain extent the result of an interactive process of knowledge generation, diffusion and application (Todtling et al, 2008). Innovation is a multifaceted process.

It is dominate by the generation of novel ideas for products and services, as well as related fixes to business processes, technological capabilities, and production and distribution methods (Bartel, and Garud, 2009). Schumpeter (1942) approached the concept of innovation as a process of creative destruction in which ‘new combinations of existing resources’ evolve.

Based on the foregoing, it is possible to argue that innovation demands change and the willingness on the part of business organizations to learn new changes as a result of ongoing events in the environment. However as Bekkers et al (2011) points out, change is not always necessarily innovative, while a learning process that kicks in the innovative process does not always lead to new ideas, practices and so on. Consequently, For Bekkers et al (2011), the important issue of note that must be pointed out about innovation centres on the questions of how radical innovation is; what is the ‘newness’ of the change that has occurred and what is the nature of the learning process that has led to the willingness to change? Several authors including Bekkers et al (2011), provide a useful basis for examining the extent to which innovations take place in business organizations. First is what Bekkers et al (2011) call incremental innovation, which involves minor changes in existing services and processes. Second is radical innovation, which fundamentally changes existing ways of delivering products and services. Third is systematic or transformative innovation, which emerges from the introduction of new technologies such as the Internet (Bekkers et al, 2011).