Innovation conveys how our economy embraces change through the enablers of new knowledge, disruptive megatrends and technology. The ‘innovation economy’ is the commercialisation of that knowledge and technology. In its broadest definition, Innovation is an idea driven change that when implemented creates a new dimension of performance (Drucker, 1985).
Innovation enhances business and economic performance through the exploitation of enablers to generate new metrics of competitive advantage. These enablers of innovation are present in everyday life. Our ability to recognise the opportunities they present is what fuels entrepreneurialism for all of us. Entrepreneurship is the process of identifying the opportunity for business growth through innovation. Enterprises involved in this process of entrepreneurship are referred to as being innovation-active. An innovation-active business is one that either adopts, modifies or invents an innovation. Innovation-active business with potential for rapid growth and/or mass consumption are categorised as startups. Startups are young high growth firms that generate innovation with the propensity to dominate or disrupt pre-existing sectors and trade to foster new industry.
For innovation to thrive, an environment conducive to experimentation and commercialisation of innovative activity needs to exist within a city. Cities can influence this environment through encouraging networking, enhancing economic infrastructure and providing physical assets to support clustering. This positive environment for innovation is referred to as the innovation ecosystem.
The innovation ecosystem is what enables the functioning of a successful and sustainable innovation economy within its incumbent city. An innovation ecosystem is the coalition of people, place and policy, which represents the enabling networks, infrastructure, human capital and systems required to commercialise and scale up innovation. Robust ecosystems provide synergistic order for these enablers to drive growth, capitalisation and business formation.
DRUCKER, P. F. (1985). Innovation and entrepreneurship: practice and principles. New York, Harper & Row.