Abstract: This article highlights innovation in a Schumpeterian sense. It refers particularly to new products and production process as the most important types of innovation in economic literature. The theoretical concept of national innovation systems offers the framework for discussing the role of heterogeneous actors, their cooperation, and instititutions in innovation processes. The article refers to the role of innovation and technology for economic development in emerging and transition economies. It concludes with a discussion of innovation in catching-up processes and the hint that economic as well as societal factors matter.