AbstractThis paper1is concerned with the process of innovation in scientific instruments. It begins by describing several features of the innovation process which are specific to the scientific instruments industry. These include the dominant influence of users, the location of many inventive users in academic and government laboratories, and the important role of small ‘specialised supplier’ companies in the industry.There follows a discussion of policy options for promoting innovation in scientific instruments, drawing extensively but not exclusively on experience in the United Kingdom and the United States. Proposals are then put forward for policies which might be considered for adoption in Australia.