Technological innovation, as defined in this Survey, is a new or considerably improved product (goods or services) introduced on to the market (product innovation) or the introduction within an establishment of a new or considerably improved process (process innovation). Technological innovation is based on the results of new technological developments, new combinations of existing technologies or on the use of other knowledge acquired by an establishment.

Aesthetic changes, the mere re-sale of innovations produced entirely by other establishments or companies, or simple organisational or management changes must not be included as technological innovations (they must be specified as organisational Innovations or marketing Innovations).

The innovation must be new to an establishment. It does not have to be new to the market. It does not matter if the innovation has been developed by its establishment or by another establishment in the same company or group of companies.