The aim of this special issue is threefold. Firstly, it highlights major recent methodological advances to address the two key issues referred to above: improving extended KPF analyses, on the one hand, and developing strategic approaches using microeconomic data, on the other:[br/][br/] * Two papers are presented using Knowldge Production Functions (KPF). They offer new methodologies to deal with the issue of regional heterogeneity when estimating KPF at the regional level in Europe. [br/][br/] * Using more microeconomic approaches, three papers contribute to the second topic. They use micro-economic data to show how firms’ strategies may interact with the local environment and impact upon the determinants of agglomeration dynamics.[br/][br/] Secondly, this issue draws attention to interesting new results emerging from the application of these new methodologies to the analysis of innovation dynamics in European regions and shows how they can help one to revisit some main tenets of received wisdom concerning the rationale and impact of public policies on the Geography of Innovation.[br/][br/] Finally this special issue also identifies issues that still require further research, particularly in relation to the development of new methodologies for the evaluation of public policies integrating the spatial dimension and the interdependencies between public policies implemented at different regional scales, which remains no more than an emerging field in the Geography of Innovation. [br/][br/] The special issue concludes with a paper presenting a new theoretical framework for the analysis and evaluation of local innovation public policies using simulation methodology. All these papers have important policy implications.