Abstract: This study explored the relationship between innovation and sustainable development, highlighting innovation as a key driver for economic growth and social progress. In contrast, sustainable development ensures the long-term viability of this growth. This study finds through a systematic literature review that innovation activities must balance environmental, social, and economic aspects to achieve green, inclusive, and sustainable development. However, certain innovations may threaten sustainable development due to disregarding long-term impacts. The requirements of sustainable development for innovation may also sometimes limit the pace and space for innovation. Therefore, it is particularly important to explore the negative impacts of innovation and sustainable development and to find a balance between the theoretical and practical levels. The study emphasises the importance of understanding the dynamic relationship between innovation and sustainable development. Through interdisciplinary cooperation and practical exploration, balancing innovation and sustainable development is crucial for promoting global sustainability. Further attention should be paid to the interaction between innovation and sustainable development, and appropriate innovation and development should be selected to achieve a balance.