In this paper I present a summary of my dissertation in which I study the relationship between information technology, outsourcing and innovation. I propose to do this in three distinct, but related, papers. The first paper will be a theoretical essay that reviews and synthesizes relevant literature from information systems, economics, public policy and management research. This paper will develop a model of innovation in firms and will propose research questions and hypotheses, grounded in relevant management theories, relating IT and outsourcing to innovation. The second paper will focus on the relationship between IT investments and innovation in firms. The third paper will specifically study the relationship between engaging in outsourcing and innovation in firms Both empirical papers will test their hypotheses on unbalanced panel data sets of large US-based firms using patent counts as the measure of innovative output.