What environment helps innovation - well after years of banging my head against brick walls of many workplaces I can tell you the most devastating is the word NO. Closed minds. I'm talking more about designers not users, though it is still true to a lesser degree.
What helps innovation? Brainstorming, co-operation in design, broad minds, competion - witness MS v Apple, who can afford not to compete and who has to. Mind you I do remember when Apple was pre-eminent and wearing the NIH badge with pride.