Defining the concept of innovation and firm innovativeness: A critical analysis from resource-based view perspective

The primary objective of this paper is to contribute to the existing literatures by comprehensively reviewing the
definitions, concept, as well as the importance of innovative and innovativeness in the business world. This
review covers various definitions of innovation and innovativeness, multi dimensions of innovation and how this
innovation acts to generate a good firm performance and competitive advantage, relying strongly on the famous
Resource-Based View theory. Since the term ‘innovation’ itself is quite difficult to interpret, observe or evaluate,
as argued by many scholars, this review attempts to provide discussion and enhance understanding on these
concepts especially in the firm’s context. This review could shed some dynamic ideas for future researchers to
further identify, conceptualize and understand the underlying theories and perspectives which strongly influence
the previous, current and future concept of innovation.