In this paper, the EU Structural Fund intervention framework is critically assessed in an effort to reflect on the problems faced by policy-makers when trying to make sense of the complexity associated with innovation. An assessment is made of the `evidence-based' approach for reporting on EU Structural Fund interventions in the Welsh economy. It is argued that the measurement of quantifiable inputs and outputs fails to engage sufficiently with the process qualities of innovation. Building on this critique, the paper reports on a study of innovation practice and performance in a sample of Welsh manufacturing SMEs to demonstrate empirically the problems of assuming universal best practices and linear models of innovation. The evidence leads to recommendations for policy improvements in two areas: the need to improve the identification and support of innovative practice in SMEs; and the need to improve the monitoring and evaluation of innovation effects from policy interventions.
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