Knowledge is becoming increasingly important in contemporary economic systems, and economic growth and welfare depend on how promptly economic agents are able to exploit the benefits derived from technological innovations. In a landscape characterized by globalization, the contributors to this volume analyse some of the major trends and policy challenges in this ‘new economy’ from the viewpoint of technical innovation and competence building, and offer a new perspective on the transformation undertaken by firms, universities, and other agents. They urge for a wider involvement of public policies to foster learning and innovation. The individual chapters report on the most significant policies adopted, and assess them in the light of the European experience in comparison with that of the USA and Japan. They are primarily based on research pursued under the European Commission's Targeted Socio‐Economic Research (TSER) programme. The book is arranged in five parts: Europe in global competition; New trends in firm organization, competition, and cooperation; The globalizing innovation process; New challenges in Europe: inequality, sustainability, and organizational innovation; and Innovation policy in the new context.