Book excerpt: Global knowledge flows can be a key driver of economic development, by encouraging the inflow of new ideas. This publication considers how countries can develop effective policies that governments and development agencies at national and regional levels can adopt in order to stimulate the participation of firms and research organisations. Issues highlighted include: promoting cross-border alliances involving firms and universities; stimulating knowledge transfers from foreign direct investment ventures; attracting highly-skilled workers from overseas; and creating vibrant national and regional innovation systems. Examples are given from leading programmes in Scotland and other countries in Europe, North America and the Pacific region.