By reviewing the practicalities of industrial structures in Europe, the regulations of the European Union and the latest advances in the economic theory of technological innovation, twenty-five eminent economists draw far-reaching conclusions for business, policy making and scholarship.

Introduction: the organization of innovative activity in Europe: towards a conceptual framework A. Gambardella and F. Malerba; Part I. Patterns of Innovative Activity: 2. The co-evolution of technological knowledge and corporate organizations G. Dosi and L. Marengo; 3. Large firms in Europe's innovative activities K. Pavitt and P. Patel; 4. Technological entry and diversification in Europe, the United States and Japan F. Malerba and L. Orsenigo; 5. Spatial patterns of innovation: evidence from patent data S. Breschi; 6. Innovation and the size of industrial clusters in Europe P. Swann; 7. 'Convergence' and corporate change in the electronics industry N. Von Tunzelmann; 8. The dynamics of localised technology changes: the role of demand-pull in a skill intensive industry; The case of the Italian mechanical industry C. Antonelli and M. Calderini; 9. Interfirms collaborations and research networks P. Llerena and M. Matt; 10. Cooperative learning and the evolution of inter-firm agreements in the European electronics industry A. Bureth, S. Wolff and A. Zanfei; 11. Firm specialisation and growth: a study of the European software industry S. Torrisi; 12. European biotechnology: leaning and catching up M. Sharp and J. Senker; 13. The research network and the new economics of science: from metaphors to organizational behaviours P. David, D. Foray and E. Steinmueller; 14. The dynamics of research networks in Europe W. Garcia-Fontes and A. Geuna; 15. Patterns of university research in Europe A. Geuna.