Regional Formation and Development Studies

Countries and businesses focus on processes optimization aiming to cut cost and increase profit. The main keyword for achieving it is usually “innovations”. Innovations is one of the most popular trends in most economies and businesses. The paradox is that there is the lack of understanding the concept both in business and science. The term of innovations is not a new topic in the research literature. However, the problem is that the definition of the concept of innovations is constantly evolving and there is no clear definition. The paper aims to define the concept of innovations and identify the changes in the concept by reviewing the scientific literature.Literature analysis revealed that the development of innovations concept started in 1934, approaching the concept from the novelty perspective. Later new perspectives were introduced such as interaction processes, value creation and social progress. Today the concept can be defined as following: innovation is a company or consumer-initiated economic, managerial, psychological or technological process of renewal within a company, which results in greater added value and a competitive advantage.