The aim of the paper is to analyse the correlation between the knowledge-based economy and its innovative activities. The secondary data analysis method - covering theoretical literature and empirical studies results - is applied to attain the above-mentioned research aims. Firstly, the innovation process is defined and the meaning of knowledge-based economy is indicated. Secondly, the “Research and Innovation performance in EU Member States and Associated countries. Innovation Union progress at country level” report is analysed. The strengths and weaknesses of the Polish economy are listed and the recommendations are proposed. The up-to-date data about the local cooperation networks in the Greater Poland region are considered. The results of the study indicate that efficiency of knowledge transfer among the education, business and government system might increase the quality of the innovation processes in the economy.