Currently an industrial perspective dominates the EU policy framework for a European bio-economy. The Commission’s proposal on the bio-economy emphasises greater resource-efficiency, largely within an industrial perspective on global economic competitiveness, benefiting capital-intensive industries at higher levels of the value chain. However a responsible bio-economy must initially address the sustainable use of resources. Many farmers are not only commodity producers but also providers of quality food and managers of the eco-system. A public goods-oriented bio-economy emphasises agro-ecological methods, organic and low (external) input farming systems, ecosystem services, social innovation in multi-stakeholder collective practices and joint production of knowledge. The potential of farmers and SMEs to contribute to innovation must be fully recognised. This approach recognises the importance of local knowledge enhancing local capabilities, while also accommodating diversity and complexity. Therefore the bio-economy concept should have a much broader scope than the dominant one in European Commission innovation policy. Socio-economic research is needed to inform strategies, pathways and stakeholder cooperation towards sustainability goals.