Innovation plays a crucial role in improving community welfare by enhancing economic productivity, expanding access to essential services, and fostering social development. However, despite the growing body of research on innovation, a significant gap remains between research outcomes and their practical implementation. This study aims to evaluate the research–implementation gap and analyze how innovation impacts community welfare through a systematic literature review approach. The study synthesizes findings from various academic sources to identify key themes, including the impact of technological and social innovation, barriers to implementation, and strategies to bridge the gap between research and practice. The results indicate that while innovation has strong potential to improve welfare, its effectiveness is often limited by factors such as inadequate infrastructure, low technological literacy, lack of institutional support, and misalignment between research outputs and real-world needs. Additionally, implementation challenges arise from organizational resistance, policy constraints, and insufficient collaboration among stakeholders. The findings also highlight that successful innovation implementation requires an integrated approach involving multiple actors, including governments, academia, industry, and communities. Strategies such as strengthening collaboration, promoting evidence-based policymaking, enhancing community capacity, and developing adaptive evaluation frameworks are essential to ensure that innovation can be effectively translated into practice. In conclusion, bridging the research–implementation gap is critical to maximizing the benefits of innovation for community welfare. Future research should focus on developing practical frameworks and context-specific strategies to support sustainable innovation adoption and implementation.