Innovation comes out of the activities of many diverse actors, businesses, multinational firms, start-ups, but also public research institutes or universities. These actors co-operate and compete with each other. Their activity is determined by the availability of financial and human resources and by demand from markets or for addressing environmental or societal challenges. Government plays a key role in dynamising and orienting this system, by influencing framework conditions and setting innovation policies. The ability of a country to generate and benefit from innovation depends primarily on this complex system. The STI Outlook attempts to reflect this complexity by analysing major trends in STI and STI policies. The diagram presented below is specific to the OECD STI Outlook 2014 and aims to help readers visualise the composition and working of the innovation system. It will be used to introduce each relevant section of the following chapter.