Employee participation and co-determination are often seen in political, economic, and to some extent, social science debates as obstacles to innovation, as they are believed to hinder "creative destruction," which is widely regarded as central to innovation. This study takes a different perspective and focuses on the constructive side of innovation. Where innovation is pursued strategically, there must be resources available that can generate the new. These primarily include the skills and commitment of employees, as well as their ability and willingness to contribute these to the inherently uncertain business of innovation. Rules of engagement are necessary, which all parties can adhere to. Based on case studies of work on product innovations in the chemical, pharmaceutical, and metal industries, the authors demonstrate this.