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In the last few decades, innovation has been widely recognized to be the engine of wealth and prosperity as it intensifies competition and increases productivity, which both in turn lead to significant economic benefits such as higher income per capita and increased employment. However, empirical evidence in this article illustrates that innovation seems not to have paid-off for some of the most innovative regions in Europe, as these regions, despite being highly innovative, grow at a slower pace than their national counterparts, as well as presenting poor economic outcomes such as low income per capita and high unemployment rates. The aim of this article is to communicate this intriguing observation to both innovation scholars and to policy-makers, since its very existence seems to cast doubt not only on one of the most principal assumptions in the field of innovation studies (i.e. innovation as the engine of growth) but also on one of the most fundamental pillars currently underpinning several regional, national and supranational economic policies. [ABSTRACT FROM PUBLISHER]