Innovation has become a key factor for economic growth, but how does the process take place at the level of individual firms? This book presents the main results of the OECD Innovation Microdata Project -- the first large-scale effort to exploit firm-level data from innovation surveys across 20 countries in an internationally harmonised way, with a view to addressing common analytical questions. These include: Which characteristics of companies affect their propensity to innovate? Which types of firms invest more in innovation? What is the impact of patenting on innovative behaviour? What are the different innovation strategies that enterprises adopt, and are they the same across countries? These are important issues for policy makers who seek to promote innovation. Through the use of common indicators and econometric modeling, this analytical report presents a broad overview of how firms innovate in different countries, highlights some of the limitations of current innovation surveys, and identifies directions for future research. Innovation in Firms is part of the OECD Innovation Strategy, a comprehensive policy strategy to harness innovation for stronger and more sustainable growth and development, and to address the key global challenges of the 21st century. For more information about the OECD Innovation Strategy, see www.oecd.org/innovation/strategy.