Innovation is the main driving force of the development of firms, industries and economies. The causes and effects of innovation cannot be explained in a satisfying way by focusing on only one of these levels. The lecture therefore provides an integrated bottom-up analysis of the innovation process, starting at the microeconomic firm level (innovation management), moving on to the industry level (innovation competition), the aggregate macroeconomic level (innovation and economic evolution), and finally the global level (innovation and international trade).