This paper summarises recent data on Scotland's innovation performance and how this compares to other countries, using data from the UK Innovation Survey and the European Union’s Community Innovation Survey. The paper assesses the reasons for Scotland's absolute and relative improvement in innovation activity by examining the performance of individual types of innovation. The paper concludes that although Scotland's headline innovation performance has improved, this has been driven more by improved performance of 'organisational innovation' than by companies introducing new products, services or processes. This implications of this for company performance are unclear