The European Union, in the face of mounting geo-political and climate challenges, needs a more effective innovation policy. Currently, its broad experimentalist approach to innovation policies gives Member States and regions autonomy for policy design. However, this often needs more effective organisations and capabilities to take advantage of the policy space. Thus, European countries face quite a substantial rethinking of how innovation policy is designed and implemented through innovation agencies. This policy paper argues that on all levels of European governance, policymakers should pay closer attention to designing and developing organisational ecosystems for innovation, focusing on fostering new capabilities.