Countries throughout the world are looking to innovation (particularly derived from advances in science and engineering) not only for wealth creation and job growth but also to help solve the global grand challenges – in energy, food security, water supplies, climate change, environmental sustainability, social unrest and aging populations. And the debt crises in the US and the Euro zone have given an added urgency to the importance of understanding how to build a supply chain of innovation and entrepreneurship that goes all the way from quality, curiosity-driven research to the development of innovative products and services. Publicly supported research and research funding agencies are seen to play a key role in this supply chain. And much attention is being directed in many countries to designing ways to better harness the contributions made by this type of research to innovation. This comes at a time when Western governments in particular are questioning the sustainability of their investments in the research enterprise and looking for ways to maximise the impact of these investments. For some this has led to a preoccupation with measurement and an enhanced role of bibliometrics in the funding allocations process – sometimes with brutal consequences for researchers who have become disenfranchised as a result of the ‘concentration and selectivity’ drive. In my presentation I will overview some of the pluses and minuses of bibliometrics as used for judging research performance for funding purposes. Attention will also be directed to recent initiatives such as STAR-METRICS in the US and the Lattes Platform in Brazil and the SIAMPI project coordinated by KNAW. However, my main message is that governments first need to be clear about what it is they want to achieve from investing in research and to differentially support and measure research activity and outcomes based on these investment objectives. The European Research Area Board’s recent contribution to the Common Strategic Framework for Research and Innovation consultation provides important leadership in this quest.