**3.1 Innovation in context**

Now that we understand the different types of innovation, what do we do? It is essential to understand that firms do not exist in isolation; they are part of a wider systems environment [2]. Further to this, the firm must co-exist with this wider environment; that is, it is about the firm's OEE [1–3]; it is how the firm is able to compete and leverage opportunities in the marketplace. From a firm perspective, innovation can be either technological or non-technological innovation. **Figure 3** gives a graphical representation of how firms may consider exploiting innovation. Firstly, let us consider innovation in the green circle; there are technological and non-technological innovations. Firms bring technological and non-technological innovations to market. Notwithstanding innovation, firms need to ensure innovations cumulate in solutions which serve market needs. In other words, innovation must be value-adding. Solutions are depicted in the blue circle. These solutions must be done timeously. Time is reflected in the orange circle. Innovations must result in solutions that meet customer needs, and innovations must be done timeously; otherwise, the competition will surpass the firm. Firms are in a continual race to be better than other firms. Firms adopt innovation to be better than their competitors, but innovation alone is not sufficient. Innovation must be solution driven and be done timeously; otherwise, firms will not be able to derive competitive advantages from innovation. Where the 3 circles intersect is the sweet spot of innovation. Firms need to strive to hit the sweet spot of innovation to be competitive and outsmart the competition.
