Innovation Innovation is the creation of better or more effective products, processes, services, technologies, or ideas that are accepted

by markets, governments, and society. Innovation differs from invention in that innovation refers to the use of a new idea or method, whereas invention refers more directly to the creation of the idea or method itself. Innovation is a process of selecting / combining, refining, and turning the best creative ideas into commercial reality and the application of the idea to enhance or improve a process, product or service, or it could be the development of a new product, service, process or model which would add new value to the user or customer. The concept of innovativeness comes from Schumpeter (1954) and reflects a firms tendency to engage in and support new ideas, novelty, experimentation, and creative processes that may result in new products, services, or technological processes (Lumpkin and Dess 1996: 142). Organization around the world see innovative entrepreneurship as the key component to robust firms growth. Innovation is commonly perceived as a key factor in stimulating small firm development (Mahemba and De Bruijn 2003). Innovative entrepreneurial organizations often are first-to-market with new product offerings (Covin and Slevin 2001). For individuality Creativity has been studied using many different approaches. Creativity and innovation are linked; in some ways, in the business context, innovation can be thought of as applied creativity. Technology strategy involves a firms commitment to acquire, develop, and de-ploy technology (Lumpkin and Dess 1996). In society, innovation aids in comfort, convenience, and efficiency in everyday life. Entrepreneurship / SMEs is the nations engine of economic growth. The innovation is the catalyst to growth. The economic growth required for Malaysias transition to a high income nation will require the development and application of new technology, supplemented by purposeful efforts to conceive and acquire innovative products and processes, while designing and adopting more effective management methods. As mention by (Lumpkin 2002; Lumpkin and Dess 2001) Innovativeness includes fostering a spirit of creativity, supporting R&D and experimentation, developing new processes, introducing new products/services, and techno-logical leadership. With the rapid advancements in transportation and communications over the past few decades, the old world concepts of factor endowments and comparative advantage which focused on an areas unique inputs are outmoded for todays global economy. In the organizational context, innovation may be linked to positive changes in efficiency, productivity, quality, competitiveness, market share, and others. All organizations can innovate, including for example hospitals,[6] universities, and local governments

There are several sources of innovation. According to the Peter F. Drucker the general sources of innovations are different changes in industry structure, in market structure, in local and global demographics, in human perception, mood and meaning, in the amount of already available scientific knowledge, etc. Also, internet research, developing of people skills, language development, cultural background, skype, facebook, etc. In the simplest linear model of innovation the traditionally recognized source is manufacturer innovation. . Innovativeness can span a continuum from a willingness to make a marginal improvement to a major commitment to be a technological leader (Lumpkin and Dess 1996).