A model is developed to study the e®ectiveness of innovation and its impact on structure creation on agent-based societies. The abstract model that is developed is easily adapted to any particular ¯eld. In an interacting environment, the agents receive something from the environment (the other agents) in exchange for their e®ort and pay the environment a certain amount of value for the ful¯lling of their needs or for the very price of existence in that environment. This is coded by two bit strings and the dynamics of the exchange is based on the matching of these strings to those of the other agents. Innovation is related to the adaptation by the agents of their bit strings to improve some utility function