Innovation, Risk, and Reward: Toward a Holistic Model of Innovation

We propose a new strategic innovation model based on the risk/reward relationship, which allows to develop a complete, consistent, and coherent theoretical framework that unifies different perspectives on innovation: Its relationship with competitive strategy, the role of the different types and agents of innovation, the role of disruptive technologies in economic growth; and the need for specific policies to build competitive innovation nations. At the public policy level, states should ensure institutional frameworks and initiatives that encourage the emergence of 'blue' innovation. At the corporate level, companies should balance their mix of resources to guarantee the portfolio of projects, beyond those that are exclusively aimed at maintaining competitiveness in the conventional 'red oceans.' © 1973-2011 IEEE.