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In this paper we characterize the national innovation systems of two moderate innovative countries – Italy and Portugal. We argue that moderate innovative countries are at a crossroads, since they do not have the attributes to compete with either the most advanced economies or the emerging countries. Bearing this in mind, we provide some elements for the design of a comprehensive catch-up strategy aimed at overcome the barriers, constraints and weaknesses of these national innovation systems. Knowledge intensive sectors in moderate innovative countries in Europe: Overcoming the missing links, stepping over barriers  3 DINÂMIA’CET – IUL, Centro de Estudos sobre a Mudanca Socioeconomica e o Territorio ISCTE-IUL – Av. das Forcas Armadas, 1649-026 Lisboa, PORTUGAL Tel. 217938638 Fax. 217940042 E-mail: dinamia@iscte.pt www.dinamiacet.iscte-iul.pt

Knowledge intensive sectors in moderate innovative countries in Europe: overcoming the missing links, stepping over barriers