Often, innovation is thought of as creating something new or something from scratch. Invention is innovation but the reverse is not neccessarily true. 
Innovation is a concept that more often than not "makes things better" or is "new to you." In other words, most things in life are made incrementally better through "do and learn" cycles - each cycle is an innovation. Also, innovation is not an absolute concept in another regard - it depends on the situation and audience.
12 Ways Companies Can Innovate
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This excellent article presents both the imperative and process for innovation. Must read!
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