Joseph Schumpeter (1934) defined economic innovation as:
1.The introduction of a new good — that is one with which consumers are not yet familiar — or of a new quality of a good.
2.The introduction of an improved or better method of production, which need by no means be founded upon a discovery scientifically new, and can also exist in a better way of handling a commodity commercially.
3.The opening of a new market, that is a market into which the particular branch of manufacture of the country in question has not previously entered, whether or not this market has existed before.
4.The conquest of a new source of supply of raw materials or half-manufactured goods, again irrespective of whether this source already exists or whether it has first to be created.
5.The carrying out of the better organization of any industry
Innovationi is studied by a variety of economists for its value in wealth creation. In LED, there is an increasing focus of LED strategies on encouraging innovation in a locality to bring economic benefits. Interventions include supporting incubators, offering tax incentives and increasing access to finance and other services for innovating enterprises.