The Community's Strategic Programme for Innovation and Technology Transfer (SPRINT) has recently published a Memorandum which discusses a framework for Community policy on technology transfer and innovation now and in the future. The publication, "An Integrated Approach to European Innovation and Technology Diffusion Policy. A Maastricht Memorandum" reports on a series of meetings held by leading experts in innovation research and policy, and sets out a broad conceptual framework which can be used to guide innovation and diffusion policies both in the short and long term. Special emphasis is also placed on policy implications for environmentally sustainable technologies. An introduction to the report explains that technology diffusion and diffusion policies have, for a long time, received comparatively little attention from policy makers, industrialists and economists. This position can no longer be maintained. Examples of highly innovative economically successful regions demonstrate the great importance of technology diffusion. If industrial innovation is seen as a "system", rather than a linear process, it becomes clear that the innovative competitiveness of firms, sectors and regions strongly depends on their ability to continually absorb, integrate and develop technologies, adapt management techniques, and organize structures and networks with other firms and public support structures. The Community's role in strengthening the competitiveness of European industry, reinforced in the Maastricht Treaty, will lead to a reorientation of Community RTD policies to develop a systematic view of the innovation process, to become more demand oriented and, therefore, to give more attention to the application and diffusion of technologies. The development of the Fourth Framework Programme for RTD, as well as this stronger orientation towards innovation and competitiveness in Community programmes and actions in the fields of regional development, SME support, education and training, norms and standards, infrastructure networks and services for the manufacturing industries, will require a Community policy framework on innovation, further developing the Commission's guidelines on "Industrial Policy in an Open and Competitive Environment" (COM(90) 556 of 16.11.1990). With a view to providing such a framework, the report first articulates a realistic workable conceptualization of technical change as a "system" and then examines the general implications of this approach for diffusion processes and policies. Though specific policy suggestions are not made, it is considered that such policies may be easily developed by further elaborating the systems approach and applying it to the analysis of specific policy issues. Opening chapters introduce and define the main concepts and guiding principles, develop the systems view of technical change and set out the general theoretical and conceptual framework. The report then considers the application of the systems approach in the case of environmentally sustainable technologies. Short and medium-term challenges to diffusion policy are examined by focusing on policies to improve the competitiveness of European industry. Policy conclusions, derived from the systems framework, are presented as part of a short historical overview of innovation and technology programmes at the supra-national level in Europe and in a discussion of the effect of these programmes on diffusion and related areas. A final section makes several recommendations for further research.