Dude. Capitalism kills innovation. I hate that myth so much. Capitalism is more likely to stifle innovation than create it. The goal of capitalism is profit and nothing else. Innovation requires risk, which could cause a loss of profit, so it's a last resort. It's more profitable to hinder your opponents than to create something innovative.

Here's a good breakdown of some of this.

For example, much of our innovation in our society comes from research universities. These are, generally, outside of capitalism. They do research and make discoveries for the benefit they bring to society, or sometimes just to improve our knowledge. They don't do it for profit.

Humans like to improve things and to learn things. There's no need for it to be profitable. Creating a system that prioritizes this is possible, but it isn't capitalism.