QS Study

Compare between Radical Innovation and Incremental Innovation

A radical innovation is one that has an important contact on a market and on the financial movement of firms in that market, while incremental innovation concerns an existing product, service, procedure, organization or method whose performance has been considerably better or upgraded.

There are two dimensions that we can use to separate an incremental from a radical innovation:

(1) The first is an internal dimension, based on the knowledge and resources involved. An incremental innovation will build upon existing knowledge and resources within a certain company, meaning it will be competence-enhancing. A radical innovation, on the other hand, will require completely new knowledge and/or resources and will be, therefore, competence-destroying.

(2) The second dimension, the external one, differentiates the innovation based on the technological changes and on the impact on the market competitiveness. An incremental innovation will involve modest technological changes and the existing products on the market will remain competitive. A radical innovation will instead involve large technological advancements, rendering the existing products non-competitive and obsolete.

Some other differences can be discussed as follows:

Incremental Innovation

  • Exploits existing technology,
  • Low uncertainty,
  • Focuses on cost or feature improvements in existing products or services, processes, marketing or business model,
  • Improves competitiveness within current markets or industries.

Radical Innovation

  • Explores new technology,
  • High uncertainty,
  • Focuses on processes, products or services with unprecedented performance features,
  • Creates a dramatic change that transforms existing markets or industries, or creates new ones.
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