Schumpeterian innovations, the coase theorem, and sustainable development : a Hong Kong case study of bus innovations

Abstract

The types of innovation considered to be Schumpeterian can be very broad. What is an innovation? According to The Advanced Learner's Dictionary (Hornby, Gatenby, & Wakefield, 1973, p. 545), an innovation is “something new that is introduced.” This covers both inventions and their introduction. Thus, introducing methods to a new market can certainly be a form of Schumpeterian innovation. Schumpeter, however, distinguished innovations (innovators) from inventions (inventors) (Swedberg, 1991, p. 173). He considered innovations as the prime movers in the capitalist process. Johannessen, Olsen, and Lumpkin (2001) dwell on six measures of the “newness” of an innovation based on his interpretation of Schumpeter and others, but glossed over the distinction between innovations and inventions. What, then, was Schumpeter's original formulation?