It is often useful to explicitly distinguish between creativity and innovation.

Creativity is typically used to refer to the act of producing new ideas, approaches or actions, while innovation is the process of both generating and applying such creative ideas in some specific context.

  In the context of an organization, therefore, the term innovation is often used to refer to the entire process by which an organization generates creative new ideas and converts them into novel, useful and viable commercial products, services, and business practices, while the term creativity is reserved to apply specifically to the generation of novel ideas by individuals or groups, as a necessary step within the innovation process.
For example, Amabile et al. (1996) suggest that while innovation "begins with creative ideas,"

  "...creativity by individuals and teams is a starting point for innovation; the first is a necessary but not sufficient condition for the second."
Although the two words are novel, they go hand in hand. In order to be innovative, employees have to be creative to stay competitive.
 

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