Innovation can be defined as the process of converting an idea into a productive service that creates a value for the inventor or for which customers are willing to pay. Now the question arises, where does innovation emerge from. There are so many answers for this question because there are many sources for innovation.
However, in case of industries (micro and meso level) innovation is based on need of the industry or based on the need of their customer. It can be innovation in technology or process or in both, that helps to improve firms profit or market share or price reduction or all of these.