Both currently and historically, there is intense discussion about what fosters the ability of companies to generate innovative ideas and solutions. Based on the influence of company size on the innovativeness of German companies between 1877 and 1932, it is shown here that the development of this ability follows a path-dependent process, resulting in a few highly innovative and many non-innovative companies. This significantly enhances the classical explanatory models and sheds entirely new light on the importance of regional factors.