The new millennium has seen the explosive rise in interest, activity, research and implementation of innovation systems. An innovation system is a system that creates things new to the world that have value to people. These systems are embodied in today’s corporations and social organizations that take knowledge and transform it into value.

Note that this definition leaves out educational institutions and governments. Except in rare circumstances, educational and governmental institutions are not sources of innovation. Educational institutions are sources of knowledge. They are very good at taking money and transforming it into knowledge. Governments, on the other hand, are good (or bad) at creating the environment within which research (the transformation of money into knowledge) and innovation (the transformation of knowledge into money) can take place. They can fund research and can also create the regulatory, competitive, financial and intellectual property environment within which research and innovation can take place.

The transformations at the heart of innovation systems can range from the incremental to the disruptive. The people at the heart of innovation systems can range from a single individual to entire societies. The value of the innovation that emerges from the innovation system can range from nominal to extraordinary. No matter what its final form, an innovation requires that one or more people change what they do and/or the way they do it. Any theory of innovation must account for the interaction of technology with the human experience. People create technology, but are also the users of technology and affected by it. In addition, any theory of innovation must account for the future. This future is what is both determined and transformed by technology and its interaction with people. The way people behave, and the reasons they behave the way they do, determines the adoption of every new thing and hence if it becomes an innovation or just a mere artifact.