The book analyzes how manufacturing firms bring new and improved products and production processes to the market. It examines sources of innovative ideas and technologies, the role of R&D, activity, the use of patent protection and other government policies, and the effect of innovation on employment and various performance indicators such as profitability and export performance. It reveals how these processes differ between small and large firms, domestic and multinationals, and across industries. Although the primary focus is on Canadian manufacturing firms, the results are adjusted to reflect recent empirical studies from other industrialized countries.