Innovation is defined as the successful exploitation of new ideas. What ought to be noted from the various definitions of innovation is the fact that innovation is not a static one-off activity; rather it is an on-going dynamic phenomenon. Hence it entails a process.

Innovation is important to both organizations and nations as it plays a significant
role in growth and survival of businesses. Central to innovation is the existence of entrepreneurs who are the drivers of innovation.

The focus of this topic is on how to successfully manage the process of innovation.This starts with an explanation of the four main dimensions/types of innovation change, namely, product, process, position, and paradigm innovations. The actual process of managing innovation is described as taking place in four main stages:
(i) recognizing opportunity
(ii) finding the resources
(iii) developing the venture and
(iv) creating value
Even though different businesses operate with different amounts of resources due to differences in size; any size of business will only be successful if they manage the innovation process well. Successful management of the innovation process will only be possible if the process is being outplayed within the appropriate context. Such a context is described as one where the business possesses
(i) a strategic direction
(ii) an innovative organization whose structure and climate nurtures creativity and knowledge sharing to bring about change
(iii) proactive mentality in developing links with external agents, e.g. suppliers, customers, etc. This topic concludes with a discussion on how firms can develop strategic advantages from innovation.