Innovation policy has emerged as a new field of economic policy during the last few decades. This paper explores the rationales for national innovation policies, as laid out in the existing literature on the subject, and considers what the lessons and challenges for theory and practice in this area are. Innovation policy attempts to influence innovation activity, often with the purpose of increasing economic growth. But it can also have more specific aims such as preventing unwarranted climate change, improving national health, and so on. The increasing attention given to innovation policy at the national level from the 1990s onwards went hand in hand with the development of a new, systemic understanding of innovation, which in a better way than before accounted for the ‘stylised facts’ of innovation activity as identified by empirical work. The system approach, as the paper shows, came to have a significant influence on the subsequent policy discourse. Drawing on recent advances in innovation‐systems theory, a synthetic framework for the analysis of innovation policy is developed and used to highlight issues of particular relevance for the conduct of innovation policy and future scholarly work in this area.