**2.2 Employee-driven innovation**

With EDI, the potential of employees is recognized to contribute to innovation and organizational development significantly [8]. Kesting and Ulhøi [8] define EDI as "*[ … ] the generation and implementation of significant new ideas, products, and processes originating from a single employee or the joint efforts of two or more employees who are not assigned to this task. Thus, EDI indicates that innovations can emerge from 'ordinary' employees, from shop-floor workers and professionals to middle managers across the boundaries of existing departments and professions.*" We follow this definition but expand the role of employees to organizational members in general, as in many organizations and institutions, members exist that are not employees, for example, students in schools or universities who also can be involved in the innovation process.

The rise of an information society has substantially contributed to the proliferation of EDI [16, 29]. In such a society, employees are seen not just as labor but also as valuable sources of knowledge and creativity [9]. Information technology and particularly the Internet have thereby democratized access to data and information [34, 35]. They allow for providing platforms that contribute to collaboration, idea management, and breaking down silos [31]. Furthermore, novel technologies foster specific parts of the innovation process, such as idea generation by generative artificial intelligence tools like ChatGPT or Google Bard [36, 37].

Digital tools have endowed employees with the ability to contribute to innovation beyond their specific roles and departments [38]. Collaborations across organizational boundaries, engagements with external knowledge communities, and introducements of novel insights are much more tangible now [32, 39]. This dissemination and accessibility of information have blurred the demarcations between knowledge producers and consumers, which further amplifies the potential and growth of EDI in contemporary society [31]. This digital revolution can transform employees from passive recipients of top-down innovation directives into proactive contributors to the innovation process [23]. Moreover, it has birthed employee-driven digital innovation (EDDI) [4]. We perceive this development as a natural progression within the broader trend of digitalization. Opland et al. [29] define EDDI as "*[ … ] the initiation, development and implementation of new digital products, services or processes originating from 'ordinary employees', or the use of digital tools to support employee-driven innovation processes."* With the increasing distribution of digital tools for creating and developing innovations, EDI is likely to evolve further into EDDI.

Several theories buttress the concept of EDI. One such theory is user innovation proposed by Hippel [40], asserting that users—in this context, employees—are ideally placed to innovate due to their comprehensive understanding of issues and potential solutions. Similarly, open innovation aligns with EDI as it stresses the importance of organizations dismantling barriers and promoting widespread participation in the innovation process [32, 41]. EDI significantly overlaps with intrapreneurship in many aspects. However, we consider it a broader concept as it encompasses noncommercial innovations, such as in the public sector, and more incremental improvements instead

*Unfolding Effect Areas of Employee-Driven Innovation: A Systematic Literature Review DOI: http://dx.doi.org/10.5772/intechopen.112160*

of focusing on radical and disruptive innovations [3, 7]. Both concepts acknowledge the potential of employees as the driving force behind innovation [4]. We distinguish intrapreneurship as typically involving a higher degree of entrepreneurial behavior, autonomy, and risk-taking, based on definitions in the literature [6, 8].

In this landscape, every employee, equipped with unique expertise, creativity, and enabling digital technologies, can become an innovator [42]. When nurtured within an organizational environment that fosters learning, promotes experimentation, and tolerates failure, employees can make significant contributions to innovation [43]. However, realizing EDI requires not only the availability of digital tools and an appropriate environment with suitable work models [44, 45] but also a robust technical infrastructure that offers digital participation opportunities [30] and a cultural shift within organizations toward greater openness and inclusivity [46].

#### **2.3 Organizational innovation channels**

It is critical to understand that while EDI provides considerable advantages, it operates concurrently with and supplements other innovation channels. Such channels may include traditional research and development departments or specialized digital innovation units [47], typically aimed at harnessing advanced digital technologies and analyzing contemporary trends to stimulate innovation. In contrast, EDI capitalizes on the creative potential embedded within the workforce [3]. Each channel offers distinct benefits and taps into varied sources of innovation potential. As such, organizations stand to gain from adopting a comprehensive approach to innovation that integrates these diverse channels. By embracing this strategy, organizations can cultivate a robust and varied innovation ecosystem, thereby maximizing innovation potential and bolstering competitiveness in the digital era. To elucidate this point, we provide a broad outline using **Figure 1**.

The internal (organizational) environment and the external (competitive) environment constitute two dynamic systems capable of consistently providing information and stimuli to various participants involved in the innovation process. External information can be derived from customer feedback or market analyses, while

#### **Figure 1.**

*Theoretical model of innovation channels in organizational innovation ecosystems based on the framework of Kohli and Melville [25].*

internal information may be gleaned informally or via surveys and workshops. This information can serve as a trigger for the participants, sparking ideas that initiate topdown or bottom-up efforts depending on the hierarchical level from which they originate. Corresponding with the organization's innovation ecosystem, these ideas can be disseminated through various accessible innovation channels, each of which should have a formalized process. Innovation projects situated within these channels may transition between them. For instance, an EDI project could be reallocated to the process chain of another innovation channel due to constraints or considerations related to resources (financial, temporal, or human), relevance, or competencies. These transitions can occur at varying stages. The outcome of these processes typically manifests as traditional innovation outputs, such as new or enhanced products, services, processes, or business models.
