Here are some examples of articles/texts that address the conflation or relationship between design and innovation (I will keep adding to this): John Thackara's 'In the Bubble. Designing for a Complex World'
'Getting Schooled in Innovation', Business Week, Jan 3, 2005 "When people talked about innovation in the '90s, they really meant technology. When people talk about innovation in this decade, they really mean design."
On this blog, they ask does design have a role in rule making? Or, is design a way of innovating new systems based on new rules? They make this distinction: "Design is testing the rules and innovation is the result."