Innovations: the new unit of analysis in the knowledge era

For quite a while the issues of knowledge management, innovation and performance measurement have been on the agenda of researchers and practitioners alike throughout the world. Not too long ago it was recognised that there are direct cause and effect relations between knowledge reuse and invention. The present paper therefore discusses the constituent elements of innovation from a knowledge perspective which have been identified in the context of a European Union co‐sponsored research project. The six facts of the “innovation cube” are: reuse of existing knowledge; invention of new knowledge; exploitation (i.e. turning knowledge into value); stakeholders' contributions (to the innovation life cycle); the enabling ecology or operating context in which the innovation occurs; and the performance facet, i.e. the bottom line. A toolkit based on performance measurement thinking and implementation process for better management of the balance between reuse and invention in development environments is proposed and results from their deployment in three real‐life case studies are discussed.