This chapter reviews the theoretical and empirical work on technological innovation and deals with the major stages of activity within technological change, including research and development, innovation, diffusion of innovations and technology transfer, and new firm formation in regional growth. It suggests avenues by which public policies can influence the process of technical change. The chapter emphasizes the diverse ways in which technology refashions regional economies and the critical role of entrepreneurship in the passage from innovation to regional economic change. S. J. Kline and N. Rosenberg elaborate on the linear model's shortcomings, stressing instead the diversity of activities that make up the innovation process, the variation across industry lines, and the apparent disorder-liness of the innovation process in reality. Product development is the last major stage in the linear model of innovation, and is that toward which the bulk of industrial research and development activity is oriented.