But if we shift our attention from invention to innovation, we begin to see a much broader horizon. Innovation — the ability to create and capture economic value from invention — is what really drives both the economic prosperity of nations and the shareholder value of corporations.

Innovation isn’t just confined to commercialization of new products. It can also build upon creative new practices, processes, relationships, or business models, and even institutional innovations such as open-source computing — invention occurs in all these domains. And while breakthrough innovations can generate significant economic value, sustaining that value requires a capacity for continual incremental innovations.