The best general definition of innovation I know (and I've done a lot of research on the topic) is from The Diffusion of Innovations by Everett Rogers, first published in 1962:
"An innovation is an idea, practice or object that is perceived as new by an individual or other unit of adoption."
I like this because it's value-neutral--innovations can be beneficial for certain groups but detrimental to others (for example, the widespread use of automobiles certainly hurt the manufacturers of horse-drawn carriages). Also, Rogers stresses that what matters is the PERCEPTION that the innovation is new--something that is old news to one person may be new and "innovative" to another. The degree to which something is "innovative" is related inextricably to its context.