Recent debates on territorial development have highlighted the need for a more entrepreneurial approach to policy. Research on innovation in a private sector context is clear on the need for an open approach engaging with a range of different stakeholders (customers, providers, etc.). Seeking to translate the positive aspects of private sector innovation to the public sector however has proven difficult. This paper explores some of the challenges identified and some of the barriers to be overcome in implementing change at a large scale in the policy field. It does so by reflecting on a series of practical cases from both the public and private sector contexts in Scotland and the Basque Country. The particular challenges identified include risk appetite, fear of failure, the speed of feedback and the lack of a ‘safe space’ to innovate given the political consequences of failure by government. The paper also puts forward some suggestions about how these challenges might be overcome.