1. Introduction

The mainstream economic development policy in Europe has until recently relied on a cluster approach and on the power of knowledge and research as the sources of innovation. Innovation policy has been to a great extent equivalent to science and technology policy, and cluster policies have aimed at building competitive advantage with strong regional and national clusters. Recent discussions have, however, emphasised other forms of economic order and origins of innovation. According to some innovation surveys, only a few percent of innovations are based on scientific sources. Cluster policy seems to have its weaknesses, as well. The current science and technology policy is not very effective, partly due to the fact that innovation policy, on the one hand, and science and technology policy, on the other, are not clearly defined but are mixed up in speech. Moreover, the practical context and interaction between the two subsystems of an innovation system (acquisition and assimilation of knowledge; transformation and exploitation of knowledge) seem to offer a lot of unused potential for innovation.