With the ever-growing importance of knowledge in the economy, science and technology-induced innovation will be decisive for meeting the Lisbon process target of making the European Union "the most competitive and dynamic knowledge-based economy in the world by 2010"1. While this statement is widely shared and easily formulated, it is a key-challenge to establish Research and Technological Development (RTD) policies that lead to this objective. Economic and social realities have changed significantly during the past decade and created a "policymaker's dilemma". New forms of knowledge and their application in products and services go together with complex exchange processes. Innovation occurs in networks and alliances rather than in an individual firm or Research and Development (R&D) lab, which increases the importance of innovation systems. This distributed nature of innovation creates a much more complex and volatile picture than the traditional view of a successful invention. Most policy relevant science and technology applications affect wider society. This increases the importance of policy impact assessment that is able to take account of the shared nature of innovation. In addition, the rising demand for greater transparency and participation in public decisions about Science and Technology (S&T) creates new patterns for S&T decision-making. Risks and decisions are increasingly negotiated between different stakeholders in society. This is exemplified by the increased profile of Science and Governance issues in recent years, and the demand for higher levels of participation and transparency in setting S&T agendas2. It also finds its expression in a reinforced public attitude that policy-makers be able to explain and justify their decisions at almost any time. Taken together, these trends increase the complexity and uncertainties about the impact of RTD policies even more. In addition, they raise the stakes for decision-makers because of the increased importance of providing framework conditions that are fit for the future. This makes the policy-maker's task of establishing systemic policies much harder.