In May 2007, OECD Ministers mandated the preparation of an OECD Innovation Strategy. The Strategy has two broad aims: first, addressing countries’ needs for a more comprehensive, coherent and timely understanding of how to promote, measure and assess innovation and its underlying dynamics of change; and, second, shedding light on appropriate multi-sector and whole-of-government approaches to innovation as a driver of sustainable growth, productivity and development and as a tool to address global challenges. Work on the Strategy is to take place over 2008-09, with a synthesis report to be delivered to the Ministerial Council Meeting in 2010. This paper forms part of the first phase of work on the Innovation Strategy. It draws on OECD work from the last ten years to provide a broad-brush overview of “what we know” about good policy practices for innovation. It also highlights recent changes in innovation processes and patterns, describes the increasing levels of internationalisation, and draws together early thinking on the contribution of innovation to solving global challenges related to the environment.