Mahdi Elyasil - Assistant Professor in Faculty of Management and Accounting, Allameh Tabatabaei University, Tehran, Iran
Mohammad Reza Attar Pour - PhD candidate in Technology Management in Faculty of Management and Accounting, Allameh Tabatabaei University, Tehran, Iran
Mohammad Sadegh Saremi - PhD candidate in Faculty of Management, University of Tehran, Tehran, Iran

In developing countries moving towards a knowledge-based economy is very difficult without governmentintervention, but the complexity of the government interventions has increased since this issue ismultidimensional and the government should have special and holistic approach to the tradeoff and balancebetween different policies including supply and demand sides and infrastructure. Global STI Statistics showsthat Iran fails to achieve balanced growth in various aspects of the development of knowledge-basedeconomy. While Iran has good results in scientific output and human resource development, the innovationoutputs are not in good situations. In this article, to design a suitable innovation policy system failures andpolicy mix approaches have been applied. To do this, first the main challenges and correspondent solutionshave been identified. Then the solutions prioritized by using TOPSIS method via a focus group. The resultsshowed that the most important strategies for development of knowledge-based products are quality ofservices and products and specially related infrastructure and standards, transparency of government demand,and utilization of foreign investment in the field of knowledge-based. For these strategies, 15 instruments aspolicy tools offered and modified by focus group interviews. The integrity and alignment of these instrumentswith the NIS functions confirms the validity of these tools. By analyzing the tools suggested that theregulatory tools like design and implementation of technology annex, big corporation‟s investment in researchand development, diversification of financial services, and facilitation of the relationship between the publicand private sector have been addressed

Innovation Policy, System Failures, policy mix, Focus Group, MCDM