How to come up with an innovative project idea

I request all our CEans to post their own tips to help students come up with their own innovative project idea.

We do not intend to discuss project ideas; but how to come up with innovative project ideas.

We'll try to address following questions -

1. How to identify common problems.
2. Coming up with solution to identified problems.
3. Identifying own interest areas and selecting a project idea based on it.
4. Gathering technical knowledge required.

I hope it will be useful to most of our visitors.