Asian Journal of Research in Business Economics and Management

India is considered to be among the fastest growing economy in the world. Manufacturing and services sectors are driving force of India. Both of these sectors plays a decisive role in determining the mounting economy of the nation. Innovation because of its paramount importance have really evolved as a research discipline. Earlier, innovation was considered primarily in terms of Research and Development (R&D). The role and definition of innovation has moved far beyond from R&D especially in the manufacturing sector. Innovation in manufacturing sector can be instituted in various categories such as supply chain, procurement, technology, management etc. Innovation plays an important part in developing competitiveness and its role has become extremely imperative. Equally important is to understand the concepts that lie around the domain of innovation. Not only organizations bust even the countries are focusing on formulation of innovation based policies to compete in the world's economy.

The literature on innovation is expanding into diverse areas and also to inter-disciplinary domains of knowledge such as marketing, economics, management to name a few. The focus of this paper is to trace the nature and concepts of innovation. A section is also dedicated to study innovation in manufacturing sector. The study provides a comprehensive and a holistic view of literature. It also aims to identify various sources and factors that drive and hamper innovations in an organization respectively.