Knowledge is fast becoming one of the main sources of wealth, yet it can also become a source of inequalities. This study attempts to determine whether it is possible to hasten the transition towards a knowledge-based economy and enhance competitiveness with increased employment and improved social cohesion across Europe. The text is an amalgamation of the scientific and political agendas which led to the European strategy for the knowledge-based economy adopted by the European Union. Its authors illustrate their own influence on European policy-making with contributions on a broad range of subjects, including: the potential for the growth of a knowledge-based global economy; new challenges for the welfare state; emerging trends in employment; the role of international benchmarking as a policy learning tool; the construction of European identity; and the building of multilevel governance required to undertake reforms. The results of the European strategy for the knowledge economy have become apparent throughout the EU in policy areas including research, innovation, single markets, education and employment, amongst others.