OBJECTIVES: Both individuals and society stand to benefit from encouraging health technological innovation – individual patients through quicker access to promising technologies, and society through the development of a competitive life sciences sector. The “Innovation Pass” (UK) and the “Critical Path Initiative” (US) are 2 examples of current health policies aimed at promoting innovation. However, there does not seem to be a clear agreement on what constitutes innovation. The objective of this project was to identify existing definitions of innovation, values inherent in innovation initiatives, and important considerations for the development of policies to promote innovation of health technologies. METHODS: A literature search of bibliographic databases including PubMed, EMBASE, Web of Science, Centre for Reviews and Dissemination databases, National Library of Medicine Gateway, EconLit and the New York Academy of Medicine Grey Literature collection was conducted for the period January 2005 to April 2010. The search terms were intended to capture concepts of “innovation” and “policy” in the health technology (drugs, devices, etc,) sector. Two researchers reviewed titles and abstracts of over 4500 references identified; 200 papers were retrieved for full review.  Key components of innovation were extracted and summarized in tabular form to identify trends and emerging themes.   RESULTS: System disrupting, development of relationships and improvement on current practice are examples of components of, or criteria for defining, health technology innovation.  Thematic concepts that emerged during the review include innovative health technology as a novelty and as a mechanism for achieving some benefit or good (broadly-defined) at various levels of the health system.  CONCLUSIONS: Based on the variety of definitions in the literature, lack of a common understanding of innovation may result in policy incoherence.  The use of a consistent and unambiguous definition provides a solid framework from which to develop policy that is measurable, meaningful and, therefore, has a greater chance of being effective.