Economics A-Level
Innovation
What Innovation means in Economics A-Level, as defined for AQA.
Definitions of Innovation
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Check what you remember
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Reference: AQA
The means by which firms strive to improve products, making their offerings more attractive, and to reduce costs via process innovation.
Private sector activity, like the development of new software or pharmaceuticals, creates entirely new markets and efficiencies.
A means by which new entrants bypass or dismantle established barriers to entry, whether product or process.
The commercial application and successful market introduction of an invention, driven by the profit motive.
The commercialising of new ideas, distinguished from invention, which is the creating of them.
The successful commercialisation of a new product into a new market.
Topics that use Innovation
- Supply-side policies (AQA A-Level)
- Technological change (AQA A-Level)
- The dynamics of competition and competitive market processes (AQA A-Level)
Related terms
- Dynamic efficiency
- Productive efficiency
- Technological change
- Allocative efficiency
- Barriers to entry
- Capital investment
- Consumer surplus
- Creative destruction
Using Innovation in the exam
Check the command word and mark scheme for your exact question. After comparing your explanation with the reference, use the term in an answer on the linked topic. This practice does not predict an exam mark.
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