ABSTRACT
While ‘innovation’ has become a mantra in the modern business world and is instrumental to solving wicked problems of the 21st century, many related terms have been used by researchers and firms which create inconsistencies in definition particularly for market-driving or breakthrough types. An overemphasis on technological breakthroughs or innovations deriving from disruptive technologies has further undermined the true nature of market-driving innovations and their advancement. This chapter draws upon the resource-based view (RBV) and the dynamic capability theory of the firm to gain insights into the development of market-driving innovations. It reviews numerous studies associated with new product development (NPD), product innovativeness and management in relation to the ‘market-driving’ and ‘market-driven’ paradigm to unfold the origins of innovation. A clear definition and set of criteria are presented to classify the types of product innovation and the intended operationalisation implications. In addition, a new ‘Market-Driving Innovation and Market-Driven Innovation Model’ (MDIM) is proposed to frame different types of innovation development through the lens of macro- and micro-level discontinuities and the corresponding marketing and idea/technology dimensions. The chapter also highlights the important changing focus of market orientation from ‘market-driven’ to ‘market-driving’ to foster more market-driving developments of radical and really new solutions that are able to shape major changes in consumer behaviour and the market structure. It concludes with practical and political implications to facilitate the development of innovations, entrepreneurial activities and policies for economic and community benefit. The implications are beyond the development of new products as they can be applied to new services, process and/or business model innovations. Theoretical contributions entailed in the chapter promote deeper understanding of conceptualisations and applications of the innovation constructs relevant to the fields of strategic marketing, business management and entrepreneurship as well as providing thought-provoking insights and reflections for future research directions.
