This innovation can also come from the people who make the machines. It is not only in manufacturing that Smith discusses the division of labor. He also notes that there is an 'intellectual' division of labor. The division of labor allows people to specialize in certain 'disciplines' and consequently produce more. Smith also notes that this division of labor should create greater wealth at all levels of society.
People are able to trade their products with each other.
Production appears to be social. We shall be sensible that without the assistance and co-operation of many thousands, the very meanest person in a civilized country could not be provided, even according to, what we very falsely imagine, the easy and simple manner in which he is commonly accommodated. The items that are produced increase the comfort and convenience of everyone in society. The similarity with Marx that I see is that there is the acknowledgement of the social nature of the forces of production, but where he would diverge from Smith is that they don't equally benefit then all. It is the social relations that surround the material forces of production that provide the contradiction.