Innovation is at the heart of policy discussions on how to achieve transformative change for sustainable development. Over the past decades, the systems of innovation approach has gained widespread use and is arguably the most influential framework guiding innovation scholars and policymakers today. Notwithstanding its explanatory power, the systems of innovation approach is mainly directed at optimising innovation systems to fulfil national economic policy objectives, such as growth, jobs, and competitiveness. The frame of reference has changed following the adoption of the United Nations 2030 Agenda for Sustainable Development and with it, the requirements for conceptual approaches that underpin innovation policy. It is increasingly understood that addressing societal challenges, such as poverty, inequality, and climate change, requires more than optimising innovation systems to fulfil economic policy objectives but also inducing directionality and processes of transformative change toward a broader range of societal and environmental objectives. This ‘normative’ turn towards transformative innovation policy is grounded in an understanding of system innovation of socio-technical systems towards more sustainable modes of production and consumption. The objective of this research is to conceptually refine the systems of innovation approach, and in particular revise the national innovation systems concept, thereby taking steps towards the development of a more integrative innovation policy framework that incorporates directionality and a strategic orientation of innovation systems to address contemporary societal challenges of the type of the United Nations Sustainable Development Goals. Focussing mainly on the needs and challenges of developing countries to accumulate the capabilities needed to manage innovation and technological change, three separate case studies are used to validate central features of transformative innovation policy: capabilities, networks, and directionality. The first empirical chapter develops an understanding of how a Brazilian latecomer firm accumulated the capabilities needed to pursue innovation in new and different directions along more sustainable development pathways. The second empirical chapter furthers the understanding of how the formation of global innovation networks enhances interactive learning in national innovation systems, and in what way international technology cooperation complements creation and accumulation of innovation capabilities. A mapping of the growing number and variety of international cooperative initiatives in the context of climate change helps to illustrate the different forms of global innovation networks. The third empirical chapter integrates insights from the system innovation perspective and opens up the systems of innovation approach to incorporate directionality and a strategic orientation of innovation systems towards a broader range of societal and environmental objectives. The compatibility of the innovation policy framework is assessed with reference to the Sustainable Development Goals.