Innovation as newness: what is new, how new, and new to
Jon-Arild Johannessen, Bjørn Olsen, G.T. Lumpkin
Jon-Arild Johannessen is a Professor at the Norwegian School of
Management, Oslo, Norway.
Bjørn Olsen is an Associate Professor at the Bodø Graduate School of
G.T. Lumpkin is Assistant Professor at the University of Illinois at Chicago,
Chicago, Illinois, USA.
The authors thank Rod Shrader for his helpful comments on an earlier draft and gratefully
acknowledge the funding that was provided for this research by the Norwegian Research
Council (The FAKTA-programme).
Innovation implies newness. To define and measure innovation better, we investigated three
dimensions of newness: what is new, how new, and new to whom? Drawing on prior research
by Schumpeter and Kirzner, we developed a scale that addresses six areas of innovative
activity: new products, new services, new methods of production, opening new markets, new
sources of supply, and new ways of organizing. Using factor analysis on data from two
separate field studies - 684 firms from eight industries and 200 information technology firms -
we found that innovation as newness represents a unidimensional construct, distinguished
only by the degree of radicalness.
Theoretical with application in practice.
Innovation, Measurement, Entrepreneurialism, Norway.
Research Implications*** Practice Implications* Originality**
European Journal of Innovation Management
Volume 4 Number 1 2001 pp. 20-31
Copyright © MCB University Press ISSN 1460-1060
During the last decade we have observed an explosive attention, both in the popular press
(e.g. Young, 1994) and among academics (e.g. Drazin and Schoonhoven, 1996; Kanter,
1985), on innovation as a means to create and maintain sustainable competitive advantages.
Innovation is considered a fundamental component of entrepreneurship (e.g. Covin and Miles,
in press) and a key element of business success (e.g. Nonaka and Takeuchi, 1995). This is
becoming even more evident as we move into a post-capitalist, knowledge-based society
(Drucker, 1993). Jacobson (1992) argues that continuous changes in the state of knowledge
produce new disequilibrium situations and, therefore, new profit opportunities or "gaps". The
rate of change is also increasing due in part to exponential advancements in technology,
frequent shifts in the nature of customer demand, and increased global competition. D'Aveni
(1994) categorizes the situation in its extreme form as "hyper-competition" and, as we move
into a more knowledge-based society, an increasing number of industries and firms are likely
to face such hyper-competitive conditions. Hence, the unending and increasing stream of
knowledge that keeps marketplaces in perpetual motion will require companies to focus even
harder on being innovative in order to create and sustain competitive advantages.
The growing importance of innovation to entrepreneurship is reflected in a dramatic increase