What Innovation and Creativity Really Are (And Why It Matters)

From federal agencies to Fortune 500 companies, innovation has become a top priority. Corporate R&D spending reached a record $1.3 trillion in 2024 (WIPO, 2025), and 83% of executives are calling innovation a strategic imperative. And for good reason. Research shows that innovation is crucial for firm survival and profitability (Ugur & Vivarelli, 2021; Cefis & Marsili, 2006). But here’s the problem: while 83% say innovation is a priority, only 3% feel prepared to deliver (FounderNest, 2025).  

That gap becomes even more costly when you consider what innovation demands—significant time, resources, personnel, and capital. Despite these substantial investments, innovation initiatives routinely fail (Holmstrom, 1989; Van der Panne et al., 2003). With so much at stake, understanding what innovation is becomes critical. When you ask organizations to define it, you often get vague answers about “thinking outside of the box” or “being creative”. Here’s what science tells us: innovation isn’t magic. It’s a systematic process grounded in human behavior and cognition. Understanding what innovation really is can make the difference between just talking about innovation and actually doing it.

So, what are innovation and creativity, really? Creativity is the generation of solutions that are original and serve a purpose (Mumford & Gustafson, 1998; Anderson et al., 2014). Innovation on the other hand is what happens when creative solutions are implemented in organizations (Amabile, 1988). And here’s the key relationship: creativity is the foundation for innovation. Without creativity, there can be no innovation. Research shows us something important here—creativity doesn’t happen in a vacuum. It emerges in response to problems that are messy, complex, and ill-defined (Mumford & England, 2022). Put simply: creativity is generating new ideas to solve problems, and innovation is the process that turns them into new products and services that create value.

Despite decades of research, misconceptions persist. Creativity and innovation involve cognitive processes where individuals with deep expertise combine knowledge in new ways, guided by leadership, and supported by resources and the right environment (Hunter, Bedell, & Mumford, 2007; Scott, Leritz, & Mumford, 2004). Two misconceptions remain widespread. First, the eureka or ah-ha moment myth, or the belief that creative insights just happen spontaneously. In reality, creativity requires systematic effort over time. Dyson’s bagless vacuum, which required 5 years and 5,127 prototypes before becoming a working product, illustrates how extensive innovative efforts can truly be (Burkus, 2013; Drucker, 2002). Second, the genius myth, or belief that creativity and innovation are reserved for certain types of people like the artistic types or technical geniuses (Amabile, 1998). The truth is creativity is a learnable method of problem-solving that can be nurtured through training and development. While certain personality traits, like openness to experience, can support creative thinking, organizations control what matters most: providing resources, creating climates that encourage exploration, and developing leaders who actively support innovative efforts.

Innovation happens at every scale, from the small process improvements that save time to the transformational breakthroughs that reshape entire markets (Kaufman & Beghetto, 2009). Organizations that understand this don’t just wait for the big ideas. They systematically create conditions where good ideas can emerge, develop, and succeed.

Innovation isn’t a mystery. It’s a process we can understand, support, and improve. When organizations move beyond myths and misconceptions to build innovation capabilities grounded in research, they stop talking about innovation and start doing it. That’s where real competitive advantage comes from; not from waiting for the next brilliant idea, but from systematically creating conditions where good ideas can emerge and thrive. The organizations that get this right don’t just survive change. They drive it.

Looking for ways to foster and drive innovation and creativity? FMP can help! We support organizations throughout the full innovation life cycle, from building innovation capabilities through training and development, to designing and implementing innovation programs, to coaching teams through agile project execution. Our work with federal agencies focuses on developing programs that help employees transform ideas into products and services that serve the public good. We bring a research-grounded, human-centered approach that focuses on what works: building the environments, capabilities, and systems where innovation can thrive.

Dr. Samantha England joined FMP in May 2023 and specializes in innovation management and organizational and leadership development. As an Industrial-Organizational psychologist, she focuses on supporting innovation from a human behavior perspective. Originally from New Jersey, she now resides in Arlington, Virginia. When she’s not diving into innovation research, she can be found reading fantasy and sci-fi novels, crocheting, and spending time with her friends, family, and pug named Petunia.