Globally, we are living in an era of change. Politically, we are experiencing the collapse of socialist systems and the decline of authoritarian regimes in developing countries; economically, the advent of the WTO system has ushered in borderless, unlimited competition; and technologically, the development of information and communication technologies is bringing about revolutionary transformations. A systematic understanding and application of innovation theory is essential for proactively responding to such changes. This paper provided a comprehensive review of the conceptual definition of innovation, systematic analysis and understanding of the innovation process, units of analysis in innovation research, and the academic perspectives and major theories in innovation research, followed by a detailed discussion of technological innovation and organizational innovation from multiple perspectives. Additionally, the paper presented trends in innovation research and comprehensively analyzed and organized future research agendas and issues.