This edited volume serves as a background study for the WRR (Netherlands Scientific Council for Government Policy) advice on innovation policy in the Netherlands. This WRR-advice, which is released separate, emphasizes the importance of effective functioning of innovation as a key determinant of wealth creation and the role and responsability of the government for the functioning of the innovation system.

The Netherlands seems to lose momentum with respect to innovation. Before we can say anything about policy directions for innovation, we need to have an adequate understanding of how innovation works. To reach this understanding the WRR has asked several experts to conduct indepth studies on the different facets of innovation. These studies resulted in the notion of innovation as a system which needs further development of insight in what goes on in the interactions between individual and organizational actors, in the creation of ideas their application in innovations, and their diffusion. A central element of innovation is that it thrives on cooperation between actors that are at a cognitive distance that is sufficiently large to lead to a novelty, but sufficiently small in order to make collaboration possible between the actors involved.

This background-study also builds bridges in order to come to a better understanding of innovation and the foundation of the possible role of government policy. This book not only functions as a background study for the advice on innovation policy in the Netherlands. It aims to make a contribution to the international debate on innovation and innovation policy, especially in the European Union.

The volume brings together insights from WRR staff (Gerrit Kronjee, Gerard de Vries and Robert Went) and external staff from a range of disciplines such as economics, sociology, geography and psychology. We (the WRR) are indebted to Neil Anderson, Ron Boschma, Rosina Gasteiger, Leo van der Geest, Lars Heuts, Patrick Kenis, Marius Meeus and Leon Oerlemans for the extensive scope of their research, productive questions and comments during the preparation and execution of this project and the meetings they were willing to attend.