Fragmentation. The American Heritage Dictionary defines fragmentation as: The act or process of breaking into fragments. Fragmentation is an interesting way to look at innovation, considering that innovation and fragmentation have a cause-and-effect relationship. The fragmentation of old processes (cause) leads to new innovations (effect). And in a cyclical manner, those innovations eventually become fragmented and newer innovations are born. Look at any industry and you will see this process in action. Telecommunications: landline, satellite, and cellular. Computer: desktop, laptop, tablet, smartphone, and wearables. Financial services: teller line, ATM, debit card, online banking, mobile banking, and wearables.