The panel’s theme is stated in its title. We will explore various aspects of the Global Challenge of policy to encourage continued economic development and productivity growth, with policy emphasis on R&D, innovation, and the knowledge economy. Innovation, as the main driver of long run economic growth, presents a unique set of policy challenges and potential solutions. The panel consists of papers researching different facets of policy in the Knowledge Economy. One paper examines how R&D affects regional economic growth, with particular emphasis on geographic R&D spillovers. This paper discusses implications for state and federal policy toward R&D and innovation such as R&D tax credits. A second paper is a case study on the semiconductor industry, both as an important driver of growth and productivity in the US economy and as a puzzling case of decline in the pace of price‐performance improvement in microprocessors. This paper points to the role of public funding of R&D, as well as official encouragement of R&D consortia in semiconductors, as drivers of past growth in this industry. The paper then addresses whether new perspectives are needed in addressing the global issue of continued improvements in information technology, for example shifting policy foci from the PC to the Internet. A third paper looks at knowledge workers—those performing the work leading to the productivity improvements and economic growth highlighted in the first two papers. In particular, the paper examines the phenomenon of apparent occupational mismatch, in which science, technology, engineering, and mathematics (STEM) majors enter occupations unrelated to their college major. The paper argues that these apparent mismatches may instead be the result of selection into occupations where the new graduates have a comparative advantage, resulting in the diffusion of STEM skills throughout the workforce. If so, then the policy goal in the US of increasing the number of STEM majors becomes all the more important. Our panel includes a diverse mix of research approaches and fields. One paper focuses on macroeconomic growth, another is an industry case study, and the third looks at policy in the labor market. Two papers feature econometric investigations, while the other employs a mix of quantitative and qualitative research methods. The participants also bring the varied experiences of diverse backgrounds to the panel. In addition to the gender balance among participants, we have one international participant and two others originally from outside the US. The academic disciplines and training of the participants include sociology, environment and resources policy, public policy, science and technology policy, comparative politics, and economics. We also strove to include individuals at different stages in the career lifecycle, from graduate students to distinguished full professors. Final note: Although we have already carefully looked through the single papers submitted in the Science and Technology Policy area for the conference (and indeed found one of our papers there), we would welcome a fourth paper for the session if a suitable opportunity exists.