The term ‘innovation’ continues to be important and is talked about extensively in the built environment. But it is widely misrepresented as well. This chapter provides a historic overview of different theoretical perspectives through which to understand the innovation construct. It critically reviews innovation studies and their applications to the built environment. The different definitions and types of innovation are outlined. Different schools of thought are examined: economic, institutional and processual. The chapter attempts to explain why innovation continues to be important and what the key implications for the built environment are.