People sing the praises of innovation like it's going to save the world, answer all our problems and grow our markets. There's only one problem, there isn't necessarily a correlation between innovation and growth. Let me give you an example.
The Japanese cell phone maker, Sharp, is currently selling the Aquos 912SH. It comes with an LCD screen that swivels 90 degrees, GPS, a bar-code reader (for researching and comparing products), digital TV, credit card functionality, video conferencing, a camera and it is unlocked by facial recognition.
It is an amazingly innovative phone that is years ahead of anything else, all except for one problem - they can't sell them anywhere outside of Japan. For years Japanese phones have innovated ahead of the world. In 1999 they had cameras, 3G networks in 2001, full music downloads in 2002, electronic payment in 2004 and digital TV in 2005. And what has all their innovation got them? Squat.
Japan has innovated at least 5 years ahead of the US and their market is shrinking. They've developed standards the rest of the world is not adopting. Innovation is only beneficial if there are growing markets that are demanding your innovations. Next time someone starts prattling on about how great innovation is, ask them why their not buying the most innovative cell phones in the world?