To get things started on this page, I figured I should start with a simple definition. To 'innovate', according to my Mac's dictionary, means that you make changes in something established. The tricky part is that just about everything we have today is a product of something already established. We're all dealing with the same one hundred or so elements, so how we combine them is where it gets interesting.
For example, I'm looking at a few chairs right now and they are pretty nice. Made of wood, four legs, and they have a nice sheen. I suppose those chairs are innovative forms of stumps but with a smooth place to sit and with nice little pieces of felt so I don't scratch my floor. From my perspective, the biggest innovation is the felt. What a game changer.
Ok, so maybe chairs aren't the best starting point. How about telephones. At some point, Alexander Graham Bell made the leap from a telegraph to the telephone. He was working to improve the former, and soon enough we were talking through electricity. From my perspective, THAT is the type of innovation that's exciting. It was a leapfrog moment and it took the combination of several very different elements to get started.
True innovation sometimes requires ignoring current state (dashes and dots) and imagining something brand new that's never existed. Combine a stump with a back rest - pretty good. Combine a chair with a jet pack? Now that's disruptive and that's what American businesses need to set their sites on.