Public advisory service to SMEs is a multibillion pound activity throughout the industrialized world. Yet very little research has been done on the theoretical basis for this field. This paper proposes some elements in a theoretical understanding of the rationale behind public measures.The authors argue that public intervention should be considered at two levels, as a public market intervention and as a consultant-client relation at the micro level. At the market intervention level, public advisory service is seen in the perspective of economic theory, comparing neo-classical and neo-Austrian theory. Two different kinds of services are identified and discussed: operational and strategic.At a micro level, the concepts of client identity and clientifying power relations serve to understand the small business manager's way of responding to services. In combining both levels -the market perspective and the micro level -it is argued that the neo-classical theory is connected to operational/expert services and objectifying power technologies. The neoAustrian theory corresponds with the empirical findings at the micro level showing strategic services embedded in a subjectifying power technology. With the neo-Austrian perspective the rather symmetrical relations between client and consultant at the micro level is comprehensible.

Interest in innovation as a way of meeting societal challenges is increasing. Interest in different types of public innovation support is therefore increasing as well. Umeå University has many years of experience in developing and operating a well-functioning innovation support system. A common theme is to offer project owners creative arenas as context for entrepreneurial judgments and assessments during the various steps of the innovation process. Improved program theories are needed to enable evaluations that provide feedback, learning, and accountability.