The main purpose of this chapter is to develop a framework for understanding innovation from a neo-institutional perspective. In order to set the stage, we provide a brief overview of the literature on innovation and contemporary institutional theory. As most of the relevant literature regarding institutional theory has already been covered in review papers, we do not think it necessary to review the existing literature [see, for example, Scott (1995, 2001), who presented an excellent overview of research on institutions and organizations, and Lawrence and Suddaby (2006), who have carefully constructed an overview of the role of actors in creating, maintaining and disrupting institutions]. Our contribution lies in presenting a broad overview of the objects and subjects of innovation studies and exploring the possible contribution of institutional theory in explaining innovation. For the literature on innovation, we provide an overview of review articles covering a broad range of innovation topics.