Increasing investment in innovation has been a major goal of research and innovation policy in Europe over the past decade. Yet to secure competitive advantage and achieve growth, R&D investment has to be translated into successful innovations, and this is first and foremost the task of firms. Turning R&D into successful innovation is a tricky business, however. Consequently, managerial economics has proposed a variety of approaches for getting the most out of R&D investments. A recent study funded under the SEEK research programme examined the use of flexible resource allocation as a management tool for achieving successful product innovation.