The paper discusses the origins and emerging ideas of smart specialization, and in particular its translation from a non-spatial concept to an explicitly spatial and regional concept. This discussion is then set in the context of debates regarding the nature, rationale, and role of modern innovation policy, and the governance and institutional issues arising are then examined. We extend this discussion to discuss the experience of these issues in EU regions, and the arguments are then broadened to the potential lessons for other parts of the world which are aiming to enhance their innovation potential.