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This essay reviews the ontological status of digital material in industrial operations and conditions it provides for innovation. It recognises the semiotic quality of digital material and the critical role of von Neumann architecture as to show that digital innovation advances through a three pronged, largely orthogonal process of embedding- a process of interlacing elements of one innovation domain to that of another.  Three types of embedding define digital innovation: operational embedding (code-computer), virtual embedding (real-world phenomena-code) and contextual embedding (performing code-social setting). Each constitutes a ‘leverage point’ for further expanding digital innovation and they interact dynamically while industrial innovation is defined by a static virtual and contextual embedding. The processes that underlie innovation in the two regimes follow differential logics. In industrial regime (1) discover-synthesise and (2) manufacture-distribute activities combine to form the leverage points for innovation. In digital regime 1) discover product or behaviour (ideation); 2) abstract to digital material (virtualise); 3) Implement and replicate digital material (variations in operational/contextual embedding); and 4) Deliver product and/or behaviour (perform digital material) activities form the leverage points for innovation enabling wider, open, and faster innovation with a distinct value logic.

Innovation logics in the digital era: a systemic review of the emerging digital innovation regime