Continuous Innovation Definition

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continuous innovation – n : modest, gradational, ongoing upgrades or enhancements of existing technologies or products; continuous innovation generally does not fundamentally change the dynamics of an industry, nor does it typically require end users to change behavior. The opposite of continuous innovation is discontinuous innovation, also known as disruptive innovation.

Examples: In the television industry, continuous innovation occurred for years with the steady, gradational enhancements in, and improvements in pricing and programming for, standard color televisions. By contrast, in recent years, this industry has begun to experience two types of discontinuous innovation, with the introduction of flat-panel, digital TVs, on the one hand, and the related phenomenon of high-definition (HD) programming – phenomena that together are dramatically and rapidly changing the size and growth rate of the industry, competitive dynamics, pricing, etc. and are suddenly compelling many consumers to expensively upgrade their TV sets and services for the first time in decades. In the restaurant industry, menu changes or the emergence of new restaurants and chains represent continuous innovation, whereas the emergence of McDonald’s and the fast-food phenomenon in the 1950’s constituted a discontinuous innovation, completely changing industry growth rates, pricing assumptions, consumer perceptions of service and value, etc. The telephone industry experienced only very modest continuous innovation for decades (e.g., changes in call plans, the advent of the touch-tone phone to replace the rotary-dial phone, etc.). Then the industry experienced a dramatic in the 1990’s with the emergence of cellular phones with their associated dramatic changes in mobility and convenience. Currently, the industry is experiencing yet another discontinuous innovation with the emergence of VOIP (voice over Internet protocol), or Internet telephony, which is suddenly and dramatically changing cost and pricing paradigms and competitive dynamics in the industry.