Abstract
A multi-agent simulation embodying a theory of innovation networks has been built and used to suggest a number of policy-relevant conclusions. The simulation animates a model of innovation (the successful exploitation of new ideas) and this model is briefly described. Agents in the model representing firms, policy actors, research labs, etc. each have a knowledge base that they use to generate ‘artefacts’ that they hope will be innovations. The success of the artefacts is judged by an oracle that evaluates each artefact using a criterion that is not available to the agents. Agents are able to follow strategies to improve their artefacts either on their own (through incremental improvement or by radical changes), or by seeking partners to contribute additional knowledge. It is shown though experiments with the model's parameters that it is possible to reproduce qualitatively the characteristics of innovation networks in two sectors: personal and mobile communications and biotechnology.