Abstract
The purpose of this article is to introduce some methodologies of economics that can enhance the program of "science of science, technology and innovation policy" to non-economist readers. I classify the theoretical elements into three parts: incentive, market and welfare, and knowledge and externality. It is important for policy makers to understand the ultimate goals of stakeholders so that the policy generates intended effects. By theorizing the purposeful behavior of stakeholders, policy makers obtain a hypothesis on policy effects that can be estimated, tested, and used for predictions. Welfare economics puts those purposeful stakeholders in the context of markets, and by using equilibrium analysis it provides a model of market- oriented policies such as deregulations and globalizations or labor market regulations in the field of science and technology. Finally, I describe some properties of knowledge, which is at the center of innovation and yet often fails to be properly supplied.
