Another source of innovation, only now becoming widely recognized, is end-user innovation. This is where an agent (person or company) develops an innovation for their own (personal or in-house) use because existing products do not meet their needs. MIT economist Eric von Hippel has identified end-user innovation as, by far, the most important and critical in his classic book on the subject, The Sources of Innovation.

However, innovation processes usually involve: identifying customer needs, macro and meso trends, developing competences, and finding financial support.

The Kline chain-linked model of innovation places emphasis on potential market needs as drivers of the innovation process, and describes the complex and often iterative feedback loops between marketing, design, manufacturing, and R&D.

Information technology and changing business processes and management style can produce a work climate favorable to innovation. Google employees work on self-directed projects for 20% of their time (known as Innovation Time Off). Both companies cite these bottom-up processes as major sources for new products and features.

One technique for innovating a solution to an identified problem is to actually attempt an experiment with many possible solutions. This technique was famously used by Thomas Edison’s laboratory to find a version of the incandescent light bulb economically viable for home use, which involved searching through thousands of possible filament designs before settling on carbonized bamboo.