Policies to promote innovation need to take into account the diversity in regional institutional structures and innovation potential, based on well-defined priorities and strategies. Strategic choices for regions depend on national development patterns and policies as well as the specific regional situation: frontier regions that are already capitalising on strong knowledge-based assets; regions that need to find a new development path due to exhaustion of past development models; or regions in a more difficult catching up situation. To implement strategies responding to these diverse conditions, a smart mix of policy instruments has to be developed. This mix should strike the right balance between the goals of knowledge creation, diffusion and absorption as appropriate for the regional context. The mix should also ensure synergies across individual instruments in view of their overall effectiveness.