Innovation enables an enterprise to upgrade it’s business, survive in the market and create new values. “The innovation also means taking on something new, original at work, working in a new, different way – of course, more successful than existing. On the other hand, an entrepreneur is a profession that accepts challenges, seeks opportunities, makes business decisions and takes risks.”( Brekić, J.,1994). The theories of innovation are associated with the analyses of J. Schumpeter in the first half of the last century who characterized innovations as a basic factor in technological progress and economic development. According to his proposal, innovations are divided as follows: - introducing a new product, - introducing a new method of a product (process), - opening a new market, - winning a new source of raw materials or semi-finished products, - reorganizing the industry. The research is conducted in order to bring innovation, economic growth and the development of the country into correlation by using different methods such as a descriptive method, desk research, using the different databases and comparing economic indicators. Innovation activities are the key to avoid stagnation and cessation of work. Innovation represents the different innovation activities that reflect on economic development and growth. According to this paper the economic growth is measured through the gross domestic product per capita. Therefore, the introduction and application of innovations in the activities of enterprises influence the economic development in the Republic of Srpska.

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