The ongoing global economic crisis is seriously challenging advanced capitalistic economies. In the last year the GDP has fallen at dramatic rates, creating the conditions for the upsurge of unemployment, above all in areas characterized by specialization in mature industries. According to recent growth models and empirical evidence, innovation and knowledge creation represent the main factors able to improve the competitiveness and the long run perspectives of growth of countries. Yet, innovation and technology policies have mainly been designed by relying on a supply side perspective so as to affect the creation of knowledge by providing funds to carry out R&D activities and by enhancing education and training for researchers. However, a debate has recently emerged, about the need for grafting innovation and technology policies in a demand-oriented framework. The aim of this project is to provide an original contribution to the ongoing debate, advancing the understanding of the mechanisms through which demand-based innovation policies may stimulate effective knowledge creation process, and eventually trigger competitiveness and productivity growth. To this purpose, the research activity will consist of both theoretical models and empirical analyses, the results of which should be able to inform the policy design process. We shall distinguish between public and private demand for both final and intermediate goods and services and will analyze their effects on the generation, diffusion and exploitation of technological knowledge by articulating the research activity on different dimensions (regional, sectoral and institutional). The research activity will be conducted by pursuing a great deal of multidisciplinarity and combining a number of diverse methodologies. The results of the analyses will in turn provide the basis upon which a taxonomy of demand-oriented technology policies may be elaborated.