Innovation is one thing, capitalism is another and communism is another still.
Communism has, of course, discouraged innovation. Eastern Europe used coal in huge amounts, and never did they come up with any way of making it less polluting. Lysenko's bogus biology was adopted as official despite being obviously bogus, as noted by the fact that two thousand years of circumcision did not decrease the foreskins of Jews by one bit, and anyone who questioned it was thrown in prison as a revisionist.
Capitalism is somewhat more friendly to innovation, but note how long it took American cars to adopt disc brakes, unibody construction, and more efficient engines. A 1982 v-6 Buick Regal I once owned had 231 cubic inches and a pitiful 85 horsepower. Now they can get that from 80 cubes. Only when competition and regulations forced change did the innovators get any attention.
Hollywood is certainly a capitalist place where innovation is ignored. How many times are they going to repeat Halloween, Die Hard, Beverley Hills Cop? There are 95 sequels currently in some stage of being made.
http://www.denofgeek.com/movies/866031/95_movie_sequels_currently_in_the_works.htmlCreativity is more valued in European films than in Hollywood films. I think Bollywood is even worse.
Note all the disparagement of solar power, geothermal power, wind power, tidal power that people are spouting.
Not all creative ideas will work: there is always some chance of failure. People claim they like creativity, but they will still buy tickets to Halloween 23 more readily than to a film that is truly innovative.
As a rule, Mercedes and BMW launch something innovative, and then Lexus and perhaps Infiniti make it user friendly. It has been years since Mercedes has been at the top of the least frequent repair ratings of Consumers Report. There is much to be said of micro-innovation that makes good ideas workable.