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This article reviews two recent handbooks in economics of innovation. It analyses the large empirical evidence summarized and identifies the foundations of the theoretical approach to the economics of innovation of these two publications. We highlight their common research questions and fields of investigation, and point to differences in their orientation to research in the economics of innovation. It seems that despite the large number of sector studies and theoretical developments we need to know more about the complex interactions among agents and the effects of pecuniary externalities. Both handbooks have different objectives and theoretical underpinnings, but both conclude that innovation is as much the result of individual action as the characteristics of the system in which individual agents are embedded. [ABSTRACT FROM AUTHOR]