Innovation can be argued to have an important part in economical policies of both the EU and its member states. In this research innovation and its policies is studied from a European and Dutch perspective. Due to the large importance for modern nations economies, the service sector and especially the ICT services are the focus of this research. The policies from the European Union are largely appointed towards technology and manufacturing innovation. However significant parts of the EU economies are dependent on ICT and Service industries. There is a gap between the reality in the market and the existing innovation policies. In this thesis this gap is studied.