ABSTRACT
This chapter focuses on processes of creativity and entrepreneurship that have, either through intended purpose or as actual result, effected real changes in the production of goods and services—innovation. While Adam Smith discussed efficiency, the Industrial Revolution involved innovative change that radically shifted what was achievable in terms of the production of wealth. The chapter shows that how the concept of innovation has little place within the framework of standard economic models, yet innovation is crucial to the total economy. It takes up some theoretical approaches, emerging in the 1980s, that construe the phenomena of innovation as occurring within specific circumstances. The chapter also focuses on how innovation has been seen, by some, to be institutionalized within the large corporation or, in other cases, within clusters of small companies or even the nation state, noting as well how some scholars have argued for cultural or ethical frameworks as catalysts of innovation.
