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          Today, innovation moves through most sectors of the economy with lightning – like speed.  Innovation has become not only the domain of a few progressive enterprises, but the key to survival and success of the many (Sapolsky, 1967; Ettlie & Bridges, 1982; Oldham & Cummings, 1996; Hoffman, 1999).

           However, research in the domain is primarily grounded in a universal approach to the study of innovation.  Further support for the recognition of innovation is needed if the intended goal is to promote innovation.  This study empirically validates the study of innovations by examining the differential effects of organizational and environmental constraints on innovation in a third world country (Kuwait).  A survey administered to employees in the banking sector; a sample of 248 managers were selected from the nine banking organizations in Kuwait.  The results indicate that environmental constraints (complexity) and organizational constraints have a direct and positive effect on innovation.