Innovation--in all its forms--and particularly technological innovation in recent years has become a crucial driver for spurring growth, enhancing competitiveness, and increasing social well being in all economies of the world. Innovation should be understood in a broad and diversified sense including not only the creation of new knowledge and technology and the adaptation of existing ones, but even more importantly, the diffusion and use of technologies, products, processes, and practices which are new in a given country context - a definition that is particularly relevant for low- and medium- income countries.Innovation policy, by its very nature, is an inter- or multi-departmental policy, touching policy areas as complementary and different as education and training, skills development, science and technology, the business environment, ICT and other infrastructure (e.g. logistics). This guidebook therefore necessarily draws upon a large and diversified set of policy areas as sources of knowledge and competence in order to provide a holistic discussion of innovation policy. It offers a broad methodological framework into which concerned policy making communities can design, conceive and implement policy measures adapted to their context. The framework would provide some fundamental principles which can then be applied and customized for specific circumstances. In order to foster a coherent and systemic approach to the design of innovation policy, this book integrates the analysis and information from policy-related departments that usually tend to work in silos and who need to work together for having a common, relevant and efficient understanding of innovation policy. In light of a key issue in low and medium income countries is the resistance of innovation systems to significant improvements, this book also addresses the relations between innovation policy and institutions.