"This paper discusses, first, the properties of scientific and technological knowledge and the institutions supporting its generation and its economic applications. The evidence supports the broad interpretation that we call the ‘Stanford–Yale–Sussex’ synthesis. Second, such patterns yield important implications with respect to the so-called ‘European Paradox’, i.e. the conjecture that EU countries play a leading global role in terms of top-level scientific output, but lag behind in the ability of converting this strength into wealth-generating innovations. Some descriptive evidence shows that, contrary to the ‘paradox’ conjecture, Europe's weaknesses reside both in its system of scientific research and in a relatively weak industry. The final part of the paper identifies a few normative implications: much less emphasis should be put on various types of ‘networking’, and much more on policy measures aimed at strengthening both frontier research and European corporate actors."