Innovation has been defined in many ways, all having certain elements in common:
“The process by which knowledge is developed and applied in new ways to the needs and material operations of society.” (Peter Drucker)

“To create and bring into profitable commercial use new products, processes, and businesses.” (Gifford Pinchot)

“The process of bringing new problem-solving idea into use.” (Rosabeth Moss Kanter)

“An innovating organization is one committed to renewing itself.”
(H Smith Richardson)

“Putting into effect something that is new.” (Edward de Bono)

While creativity is mostly an individual effort, innovation is usually a team effort.  It is not just one simple step, but an integrated process of creative steps that the defined goal.  Innovation is important in all functions, including marketing, manufacturing, R&D, finance and human resources.  It is usually, but not always, triggered by “market pull” vs. “technology push”.