From idea to innovation part 1: perspectives on innovation and the special features of entrepreneurship in rural areas

Which came first: Idea or innovation? In everyday language, the terms idea and innovation are easily confused. An idea means a proposal or concept at the level of thought, for example, a proposal for a new type of vehicle or a service model, while innovation means the realization of an idea concretely into a product or service. An idea is a thought and an innovation a concrete product or service. Thus, idea and innovation complement each other: innovation requires an idea as a basis, and the idea must be further developed into an innovation in order for the idea to become concrete.

It is important to distinguish between these terms, especially when planning and developing business operations, because by looking at them we can easily notice the bottlenecks of business operations. The world is full of ideas: everyone has ideas, both good and bad. As ideas, they sit in our main booth and in our notes. They help us develop and share our perspectives of the world with others, but as long as they are only ideas, they do not manifest as products and services in our world.

Innovations, on the other hand, have far fewer ideas. Although they require a lot of work and time, their pursuit is important because they have a tangible impact on our world as products and services. At their best, they develop our common world for the better, so increasing their quantity and quality is a key cornerstone of business development and business research.

Business incubators promote innovation

When we want to develop innovations, we need to understand what things promote the realization of innovations. Implementing innovations requires knowledge, know-how, and money. Few are able to innovate alone from start to finish, so help is necessary. For this problem, we have a lot of business service organizations in Finland that offer business advice and various development projects for the needs of innovators. The help offered by business service organizations is useful for innovators, but traditional business advice cannot comprehensively meet all needs.

Business incubators try to compensate for this shortage. They provide an environment whose goal is to systematically create new business ideas, grow them into innovations, and create profitable business activities around innovations [1]. Business incubators focus on the stage where the idea goes from the market to the first funding patterns, while business accelerators focus on the stage where the company's market and funding are increased with more funding [2].

We implemented this kind of business incubator together with NIHAK in the recently concluded VAU!HAUTOMO EAKR project in the Nivala-Haapajärvi region. Our goal was to develop a business incubator for the needs of Finland's rural areas. The innovation environments of rural areas differ a lot from the business environments of urban areas, so their business incubators must take into account certain special features typical of rural areas.

I will explain these special features of rural areas and the VAU!HAUTOMO business incubator in more detail in the next part of this blog series. It is important to remember that ideas and innovations are different from each other, innovations are the cornerstones of vibrant business activity, and business incubators enable wide-ranging support for innovations.

Author:
Peetu Virkkala, MSc. (Techn.), PhD. Researcher, University of Oulu Kerttu Saalasti Instituutti, Microentreprise Research Unit MicroENTRE

References:
[1] OECD/European Commission (2019), Policy brief on incubators and accelerators that support inclusive entrepreneurship, OECD SME and Entrepreneurship Papers, No. 13, OECD Publishing, Paris, .
[2] Hausberg, J. P., & Korreck, S. (2021). Business incubators and accelerators: a co-citation analysis-based, systematic literature review (pp. 39-63). Edward Elgar Publishing.