Piedmont is one of the top ten manufacturing regions in Europe and enjoys the highest levels of business investment in R&D in Italy. Birthplace of the most famous Italian automotive company - Fiat - and home to many heavy engineering and manufacturing firms, the region has long been a central part of the national industrial core. Yet since the early 1970s, the fragility of Piedmont's production system has slowly became evident. Like many regions around the OECD, Piedmont is seeking to use innovation policy to drive the modernisation of its economic base and to help it meet the challenge of developing new strengths while also drawing on existing assets. This report reviews how Piedmont's new regional strategy supports innovation and how its efforts can be improved. It will be of interest to policy makers, firms and others active in promoting innovation and regional economic development. ALSO AVAILABLE IN THE OECD REVIEWS OF REGIONAL INNOVATION SERIES: 15 Mexican States (2009); North of England United Kingdom (2008); Globalisation and Regional Economies: Can OECD Regions Compete in Global Industries? (2007); Competitive Regional Clusters: National Policy Approaches (2007)