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An increasing body of literature has been generated regarding the role that services play in innovation systems, in which special attention has been paid recently to Knowledge-Intensive (Business) Services – KIS & KIBS. As not only developed nations but also emerging economies and regions embedded in this country-level unit of analysis show an economic structure strongly based in the tertiary sector, it is mandatory for policymaking processes to better evaluate and understand the idiosyncrasies of these innovation-generating services and its relationships with National, Sectoral and Regional Innovation Systems. Thus, this article aims at approaching the dynamics of Foreign Direct Investment (Inward and Outward flows) in KIS in Spain considering the Regional (NUTS 2) level of analysis and taking into account their interactions with the innovative environment of two specific regions (Madrid and Andalusia) by testing a regressive model built upon technological and innovation systems’ variables. The novelty of our approach is to propose a model based on innovation-driven determinants of FDI attraction where: a) the size of innovation systems is approximated by GERD (controlled by GDP) and by a Human Resources variable (Researchers in R&D); and b) technological heterogeneity is measured according to the technological gap between region/country (using a Patent Index proxy). This approach, although novel to our understanding is based on a broad set of references on FDI (Investment Development Path, Asset Augmenting Strategies), internationalization and Innovation Systems (Knowledge Generation, Absorptive Capacity). Preliminary results do not indicate that Innovation Systems affect relevantly the FDI flows for the analyzed regions/countries, suggesting that FDI behaves generally according to a market seeking logic, rather than asset seeking. Improvements for econometric estimations are suggested.

Innovation is a process that faces several “market failure” situations and for this reason – and for being considered one of the main drivers of economic growth throughout the world – a large number of governmental and supranational policies are designed to foster technological progress. In Europe this situation could not be any different and the “European Paradox” is used as the main argument for the implementation of innovation related initiatives. Along with these policies, there is an increasing concern with their continuous evaluation aiming at providing valuable feedback for these program’s adaptation and adequacy to the player’s needs. In this sense, this paper develops an evaluation of Eureka Programme’s impact for the case of Spanish companies participating in this initiative and that had projects finished in the period 2000-2005 (analysis performed through the information contained in Eureka’s Final Reports). A total of 77 firms were assessed through quantitative methods, namely correlations, chi-square tests, discriminant models and cluster analysis. Findings show that Spain participates in Eureka mainly through SMEs, and that the overall rate of technological achievements is impressively good. Commercial achievements seem to be influenced mainly by the quality of the project’s functioning and the capacity of firm’s exploiting results in the industry by the end of the project. A basic typology of participants is offered in which three clusters are built: (1) Risky Innovators; (2) Inventors; and (3) Consistent Innovators.