Upside Down-novation (Denovation)

Innovation has traditionally defined around something ‘new’. Schumpeter talked of new products, services, business models (Schumpeter 1934), and indeed the ‘nova’ in innovation is Latin for ‘new’. Recent definitions of innovation have included the related concept of value and value creation. For instance, the Innovation Metrics project, sponsored by the US Department of Commerce, and whose board includes elite business and academics define innovation as ‘something new that creates value’. The 2008 Australian National Innovation Review uses a similar definition (Cutler 2008).

However, by linking innovation and value some terminology issues have arisen. I have been writing my PhD about how consumer understand value in a new technology. This research aims to better understand innovation from a consumer perspective, and uses consumer interviews and a grounded theory methodology (see Ferrers(2008)). Some terminology issues have arisen.

The first issue builds from Schumpeter’s idea of creative destruction. When innovation creates, it builds upon the destruction of the old ways. As innovation creates value, so it destroys value. But we seem to lack a word to indicate this destruction. If innovation is something new, which creates value, what do we call – something new which destroys value. My suggestion in this note is that we need a new term for this idea. Such a word emphasises the value impact of the new. We have innovation for a positive impact, and we need a word for a negative impact.

A few possibilities have come to mind. These words use negative prefixes to indicate destruction. Prefixes such as ‘un’, ‘contra’, ‘min’, ‘anti’, or ‘de’ could be used, and connected with innovation. Thus possibilities are un-novation, contra-vation, min-novation, anti-innovation and de-novation.

Value similarly suffers from a lack of negativity. This is a second terminology issue, Value can be a noun or a verb. Something has value or we may value something. Both meanings are positive. However, we seem to lack a word which means loss of value, or negative value. Elsewhere I have argued that value moves either up or down, with new information and relates to several dimensions such as price, time and function (Ferrers 2008). What I now argue for is a new terminology to capture this negative action and movement. A price rise or something that wastes our time destroys value, yet we would not call the change and innovation or new value. I propose that we call a loss of value event, a ‘devalue’ or ‘devaluation’.

In short, I portpose two new words to complement innovation and value. I suggest we use ‘denovation’ to be the opposite of innovation and use this word to denote something new which destroys value. Also, I suggest we use ‘devalue’ as the noun related to a loss of value. I look forward to you comments.

References:
Schumpeter, JS 1934, Theory of Economic Development (per http://en.wikipedia.org/wiki/Innovation)
Cutler T 2008, Australian National Innovation Review, available online at www.innovation.gov.au
Ferrers R 2008, Towards a value theory of innovation, DRUID conference, Copenhagen (online here).