A product innovation is the introduction of a good or service that is new or significantly improved with respect to its characteristics or intended uses. This includes significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics.
Product innovations can utilise new knowledge or technologies, or can be based on new uses or combinations of existing knowledge or technologies. The term 'product' is used to cover both goods and services. Product innovations include both the introduction of new goods and services and significant improvements in the functional or user characteristics of existing goods and services.
- OECD/Eurostat, "The measurement of scientific and technological activities: guidelines for collecting and interpreting innovation data: Oslo manual", Third Edition, Paris, 2005 - pdf