Innovation is viewed as the driver of technological change and economic growth. It is also a risky and costly process for firms. In the course, we first provide an understanding of the innovation process, its determinants and consequences, both economy-wide and at the business level. Second, we focus on the institutional environment for the production of innovation. We pay particular attention to the intellectual property (IP) system. By offering a temporary monopoly over innovative ideas, IP rights (e.g. patents, trademarks) provide incentives for the production of innovation. In a nutshell, this course provides a toolbox to understand the drivers and consequences of innovation both at the macro and micro levels, and to learn about innovation strategies that help firms defend against competitors and increase their profits.