The creation of knowledge-intensive societies is seen as a critical factor in the economic and social success of countries.
While high-tech industries play a central role in this, innovation in the classical economy and traditional industries and their diverse opportunities are often overlooked.
It is time to look at innovation in a broader perspective and to pay more attention to organisational innovation, which allows traditional firms to integrate innovation incrementally and thereby increase their innovation capacity. Several important aspects may be overlooked if the focus is only on new technologies.
In reality, what is important is the continuous internal and systemic evolution that makes companies increasingly dynamic and creates the basic conditions for the creation of new technologies and breakthrough innovation.

Economic growth is not only based on the creation of new sectors, but mainly on the internal transformation of already existing sectors.

The Estonian economy has been in a prolonged downturn for some time.
Europe’s green turn, resource constraints and expectations for environmentally sustainable products/services have put additional pressure on businesses, also shaping the country’s economic future.
In addition, global digitalisation and the growing impact of artificial intelligence have forced companies to accelerate change and development in response to broader societal trends.
The development of innovation capacity is increasingly emphasising the critical importance of continuity and systemicity, based on the ability of organisations to adapt to the environment in a continuous and targeted way.
Economic theories have also increasingly highlighted the importance of collaborative capabilities, which enhance an organisation’s ability to harness innovation and to remain internationally competitive.

In business, there is a constant struggle to survive and grow.
New entrants are changing the rules of the game, seeing new business opportunities in the challenges of old players.
The core of innovation is about spotting new opportunities and seizing them.

It is important to stress that all business functions can be involved in activities that are necessary for innovation.
According to theOslo Manual, innovation is defined as the introduction of a new or significantly improved product or service or process to the market.
Innovation can be classically divided into product innovation and business process innovation.
The main objective of product innovation is to create new products or to make significant improvements to product characteristics.
The improvements need not be radical, but may also involve adding new features to the product or improving the user experience.
Product innovation rarely occurs in isolation; it always includes business process innovation.
Organisational or business process innovation is directly linked to the management of the business, involving the implementation of the business plan and value proposition, the achievement of strategic objectives and the ability to compete.
It is important to note here that simply reducing costs will not lead a company to growth; hence business process innovation is central to achieving growth.
Business process innovation involves investing in knowledge, deepening organisational processes, behaviours and relationships.
Because organisational knowledge is mostly abstract, it is more difficult to protect, and companies tend to invest less in business process innovation.
The scope of innovation can be very broad, ranging from incremental improvements in business processes to a complete transformation of the business model.
Business model changes can be driven by a variety of factors, such as new technologies, changing consumer expectations or regulatory requirements.
The concept of a business model can be seen as a systemic shaping of a company’s value proposition.
Companies are constantly looking for ways to improve their existing value proposition, create new value or even completely transform their business model.
Research has shown that organisational innovation gives a company a long-term advantage as a leader in its field, while technological innovations tend to provide a temporary competitive advantage.
Product innovation will only have a positive impact on firm growth if it relies on both technological and organisational innovation.
It is important to bear in mind that routine changes or innovations, as well as the replacement of a production technology by an equivalent one, do not qualify as product innovation.
Similarly, product concepts or prototypes that have not yet been launched on the market are not considered innovations.
The economic value of an innovative technology is only realised through the business model, and the same technology may produce different results for different business models.
Innovation is never an isolated activity; it is a collective and cumulative process in which firms interact with other firms as well as with different organisations.
While researchers and engineers are indispensable in R&D, value chain collaboration is central to the broader approach to types of innovation.
In contrast to traditional R&D, knowledge flows between firms using the organisation’s employees to create innovation.
In conclusion, organisational innovation is as important as technological innovation. The benefits of management innovation, combined with technological innovation, can outweigh the benefits of traditional product and process innovation.
It should be recognised that a potential new technology may not fit into an existing business model, requiring companies to broaden their perspective to find an innovative business model that creates value from the new technology.
Successful companies will be those that do not tire of looking for new ideas and are ready to embrace change.
Start-ups often aim to bring something completely new to the market that can radically change our products or services.
This mindset is also essential for mature, established organisations to adapt to a changing environment and continue to create value.  

The article draws on the author’s 2019.
based on a study carried out in 2009 on the innovation capacity of the classical economy, including industry.