ABSTRACT The EU faces a number of major challenges: to shift its support from the industries of the past to the knowledge-based industries of the future; to rescue the Lisbon strategy, designed to build a knowledge-based economy but so far achieving little; to re-engage with the European public after the difficulties with the Constitution. The paper argues that these challenges are intimately connected and that it is only by addressing them together that there is any hope for success. It elaborates these connections with particular reference to a reinvigorated Lisbon strategy with a strong social dimension. It concludes by delineating the corresponding challenge that faces the research community: to undertake a fundamental revision of its analysis of social policy in relation to modern economies; and to build a new toolkit for intelligent benchmarking.