The European Strategic Programme for Research in Information Technologies was created as a defensive response to the US and Japanese lead in information technology. Esprit was driven by the belief that intra-EU collaboration is an effective means to enhance the competitiveness of the European IT industry. Esprit has undergone a number of changes to facilitate collaboration and innovation. Yet, only after eighteen years of Esprit did the European Commission appreciate the need to encourage worldwide cooperation within its new Fifth Framework Information Society Technologies Programme. In the emerging Information Society it is conceded that new ideas are as likely to be found outside Europe as within. This chapter seeks to demonstrate that successful Esprit projects maintained valuable external links with many unacknowledged partners worldwide throughout the 1990s. It argues that the world of innovation is borderless and 1 that Commission policies to impose boundaries to collaboration are unlikely to contribute to successful innovation. ESPRIT: EUROPE'S RESPONSE TO US AND JAPANESE DOMINATION IN INFORMATION TECHNOLOGY 1. Introduction Established in 1983, Esprit (the European Strategic Programme for Research in Information Technologies) is the oldest of the European Commission's research and technology development (RTD) programmes. It is also the largest and has been a model for all the Commission's other RTD programmes. Esprit arose from the fear that Europe was lagging far behind the US and Japan in vital information technologies (IT) (Georghiou, 1999; Mytelka and Delapierre, 1987). Collaboration, rather than competition, among Europe's IT companies, it was imagined would yield synergies, the flexibility to adapt in volatile markets, and the shorter product cycles essential to international competitiveness (Assimakopoulos and Macdonald, 1999). The complementary notion of pre-competitive research allowed the Commission to subsidise RTD while avoiding the accusation of interfering in the market (Quintas and Guy, 1995). The collaboration of Esprit has attracted considerable academic attention (e.g., Hagedoorn and Schakenraad, 1993; Hagedoorn et al., 2000); whatever Esprit's success in encouraging innovation, it has become a classic in innovation policy. Esprit in the 1980s was very much the child of the large firms of the European IT industy, the Big Twelve. Some would argue that Esprit was still fulfilling their requirements in the