From the podcast transcript:
Matt Ridley: Yes. And the way I distinguish [invention and innovation] is that when a new device is invented, it also has to be made available, affordable, and reliable, and that process is innovation. And it's often much harder work than the original invention. Coming up with the first prototype is sometimes the easy bit. Turning it into something that people want and people can afford, and that people can get ahold of is really tough work.
There's a lovely story that Charles Townes, the inventor of the laser, used to tell, which rather nicely illustrates the difference between invention and innovation. He said, there's a beaver and a rabbit looking at the Hoover Dam and the beaver says to the rabbit, 'No, I didn't build it, but it is based on an idea of mine.'