Technological development requires both invention and innovation. Innovation is the discovery of some basic material or method whereas innovation is its practical application. Discovery of wheel was an invention and its use in vehicles was an innovation.
According to Joseph Schumpeter innovation may occur in any of the following forms :
(i) Introduction of a new product :
(ii) Use of a new method of production.
(iii) The opening of a new market.
(iv) The conquest of a new source of raw material supply.
(v) The reorientation of an industry.
Innovations may enable a firm to create a firm to create a new product/market or to increase market share. Innovation and technology have facilitated globalization or interanationalisation. Technology advancements in transportation, communications, have helped to overcome distance barriers between nations and reduced costs of moving goods and people. Information technology has revolutionised marketing and distribution of products and services.