What is the difference between an improvement and innovation?

Innovation and improvement seem to be the same, but they have different meanings and implications. How can you tell them apart? It's easy: innovation is usually associated with the creation of something new, whereas innovation is making something better than it originally was.

Improvement is the implementation of something new, but with a lower degree of novelty and it is usually the optimization or extension of existing. Improvements can weed out underlying issues without starting from scratch. When we’ve reached the limits of an achieving progress with incremental small changes, or when the situation or expectations changes significantly in a short span of time, that’s where innovation plays a role. Innovation is when something breaks the mold in order to come up with something great, whereas improvement is tweaking things in an existing way to make it better.

Unlike improvement, innovation is about creating a whole new idea which leads to more of a risk that it will not produce significant gains for the company or consumers. In order to minimize the risk of investing in something that does not produce valuable outcomes, it is vital to have a process for evaluating innovation.