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This paper suggests that the scholarly field of industrial organisation is shaped and directed by the debate concerning some of the most pressing policy issues at any historical time period about the link between the organisation of industries and economic performance. By industrial organisation, we mean the scholarly field of research. By the organisation of industries, we mean the actual way in which economic activity is organised within the unit of observation of an industry. A shift in the organisation of industries that is taking place, away from economic activity based on the traditional factors of production, such as labour and capital, and towards knowledge-based economic activity. Accompanying this shift is a new public policy debate focusing on how to create new knowledge and facilitate its commercialisation. The field of industrial organisation is responding with a new focus on the link between the dynamics of the organisation of industries, or how industries and firms evolve and change over time, and innovative performance.JEL Classification: L10, L20, L40.