Insight into productive policy changes The world economy is based on creating, evaluating and trading knowledge. Decision makers can now find a solid platform for creating innovative European policy. Digital Economy © Thinkstock Funded by the EU, the project 'Policy incentives for the creation of knowledge: Methods and evidence' (PICK-ME) assessed current economic policy. The project was intent on fostering knowledge generation and exploitation on measures surrounding the economy of Europe. Researchers looked for patterns in the impact of market demand and public procurement. An economic and social understanding of the European innovation system and its drivers is crucial to identify effective consensual innovation policies. It is important to attain a deep understanding of national innovation ecosystems. By studying other nations, European innovation policies will be more innovative, more effective at impacting national policy, and better designed for the whole of Europe. The project's research suggests that policy measures should be designed to stimulate labour mobility across related industries. Demand will actually pull the generation and adoption of new technological solutions only when and if the customers are sufficiently creative and their demand is consequently competent. But even if competent, demand alone is inactive unless accompanied by insightful user-producer interactions. Policy should support attracting valuable individuals with distinctive skills that are linked to local demand conditions. The evidence advocates design of policy options that are aimed at tackling structural weaknesses, especially in peripheral regions, to favour retaining these valuable resources. At the same time, they should strengthen local capabilities by taking advantage of local skills and competencies. Also, policy should support upgrading of local capabilities and attract knowledgeable individuals. The research validates targeting local firms. The aim is to increase local capability for absorbing and exploiting external sources of information through effective linkages with other co-located actors. It is important to create incentives for large multinational firms to locate in the periphery and work towards increasing the industrial variety in peripheral regions. Policy must support older individuals for retraining and career change in order to increase their chances for reintegration into the labour market. The smart approach is to upgrade human capital in line with demand and link higher education programmes to industries and specialisations for which demand exists. Evidence also substantiates promoting long-term investment in technological education, which is vital for the survival and fortification of the high-technology industry. All of these goals in the light of existing specialisations are crucial steps towards better economic performance. This project's outcomes add value to the shaping of policy measures and foster knowledge generation and exploitation. Keywords Policy incentives, economic policy, market demand, innovation policies, labour market
