Since the 80s of the 20th century, being the reasons of business cycles and economic growth, technological changes have become again a subject of great interest to economists. The development of Real Business Cycle Theory and Endogenous Growth Theory have contributed to a lot of research on the causes of the business cycles and on the incorporation of a technological factor into macro-econometrics models. The objective of this paper is to review definitions of an innovation and a technology shock and to analyze relations between these two concepts. The interpretation of innovation and its taxonomy on a microeconomic level is made with a respect to the analysis of a technological shock on a macroeconomic level. The authors argue that every new idea affecting the relation of factors of production in a given enterprise can be called, at best, an innovation or a change in technology but not a shock. Due to technology diffusion, only big innovations in one enterprise could spread on the entire economy and cause a technology shock possible to identify.