A high level independent Expert Group on Knowledge Transfer and Open Innovation was set up at the end of 2012 to assess if there is a case for more policy action on Open Innovation and Knowledge Transfer. In order to meet the objective, the Expert Group considered whether Europe performs below its potential in creating value out of knowledge and ideas, and what can be done to foster knowledge sharing and utilisation. Europe faces two existential challenges: (1) how to create sustainable growth given the vast overhang of public and private debt and (2) how to do this given the transformational impact of disruptive technologies on traditional models for business and public sector organizations, banks, universities and public research organizations. The response to the challenges Europe is facing has to be smart, radical and above all, innovative. For the EU to continuously raise and reach its growth potential, it has to be innovative and thoroughly enterprising. This report delivers a new, advanced Open Innovation paradigm: building and funding ecosystems for co-creation. It provides a coherent whole of policy recommendations for Open Innovation and Knowledge Transfer, across four priority areas where this Expert Group recognizes that actions must be taken. The necessary building blocks for an ecosystem for co-creation are: 1) to put Open Innovation and Knowledge transfer in the spotlight; 2) to embrace innovative businesses, grow innovative markets, innovation hubs and networks; 3) to make Universities and PROs more entrepreneurial and 4) the smart integration of capital into the ecosystem. In order to bring Open Innovation and Knowledge Transfer to the next level it is essential to build an ecosystem in which Open Innovation and Knowledge Transfer, or co-creation, can thrive. An ecosystem for co-creation in turn will breed trust, visibility and transparency. Co-creation ecosystems will thereby act as magnets for innovation and economic development