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Abstract
Europe suffers a handicap in terms of competitiveness that is mostly related to innovation. Structural factors such as weak linkages between science and industry and unfavourable conditions for fast-growing SMEs explain the inadequate levels of knowledge creation. Only innovation policy measures that actively support the emergence of innovative firms and lead markets will be able to transform Europe into a leader in the knowledge economy. Cluster and open-innovation policies can foster innovation, responding better to individual needs, while national reform programmes should foster society-driven innovation, paying greater attention to the regional level. This paper outlines the key assumptions and premises of the European Union's contemporary innovation policy.
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