Innovation Policy in the era of sustainability

Innovation Policy in the era of
Ben Dankbaar
Radboud University Nijmegen
EAEPE Conference
Krakow, October 2012
Innovation policy – why and how?
The challenge of sustainability
New innovation policies
Limits and Criticism
Creating new institutions
Innovation policy – why and how?
• Government innovation policies aim to improve the innovative
performance of companies in order to improve their competitive
performance and therefore employment, exports and economic
growth of the (national) economy
• Underlying assumptions
– Innovation takes place in companies / by entrepreneurial action
– Without innovation policies, companies would invest less in
innovation, because they can only appropriate part of the total
benefits of innovation for society
• Innovation policies in principle do not prescribe what direction
innovations action should take and in that sense they are not
– Sometimes innovation policies aim at to speed up the diffusion of a
specific technology
– Science and technology policies frequently are selective in the sense
that specific fields of science and technology are receiving more funds
than others
Innovation policy – why and how?
• Innovation policies should be distinguished from policies promoting
innovation in public goods, for which government has taken on
special responsibility:, e.g. in infrastructure, defense, health
– Where innovation policies usually fall within the domain of ministries
of economic affairs, policies promoting innovation in public goods are
the concern of various functional ministries
– Where government is the customer, its purchasing power can be used
to promote innovation in a specific direction
• In reality, these two kinds of policy overlap and interact
– Spending by the Dept. of Defense en the National Institute of Health in
the USA have been of very considerable impact on innovation in
electronics and biotechnology
– Companies producing products for use in the public sector may also
use the same or similar technologies for private markets
Innovation policy – why and how?
• Over time, a large number of instruments have been developed
– From indirect, fiscal instruments to support investment in R&D to
direct subsidies for individual firms
– From programs focusing on specific sectors to programs focusing on
specific regions and clusters
– Instruments focusing on different stages of the innovation process,
from fundamental research to implementation, from vision-building
and roadmapping to collaborative development
– Instruments focusing on large, R&D performing companies and their
– Instruments focusing on support for startups and spin-offs
• The effectiveness of all instruments (and indeed of innovation
policies as such) is constantly under discussion
– Additionality
– Costs and benefits
Innovation policy – why and how?
• Considerable debate on the optimal mix of policy instruments
• General trends
From direct support to fiscal incentives
From central government initiatives to local and regional initiatives
From science-push to demand-pull
From institutional funding to competitive funding
From single actor projects to multi-actor projects
From dedicated support to improvement of framework conditions
• Organizational concepts
Open innovation (collaborative or distributed innovation)
University patenting, technology transfer offices and spin-offs
Co-creation with users (democratizing innovation)
Triple helix constructions
• Debate inspired by evolutionary theory about the importance of
supporting new high-tech starters
– As opposed to “backing winners”
Innovation policy – why and how?
• General outcome currently
– policies supporting collaborative efforts in research and development,
explicitly encouraging collaboration between large and small/mediumsized companies, frequently with a geographical or cluster component
– Policies supporting high tech startups, especially from universities
– Policies providing indirect support for R&D
• Still considerable differences between countries
Direct government funding of BERD
Indirect government support through R&D tax incentives
No data/cost estimate available
Source OECD STI Scoreboard 20118
USA (2008)
ISR (2008)
FRA (2008)
KOR (2008)
ESP (2007)
ZAF (2008)
AUT (2007)
DEU (2008)
ISL (2008)
BEL (2007)
IRL (2008)
HUN (2008)
NZL (2007)
ITA (2008)
CHE (2008)
AUS (2008)
JPN (2008)
PRT (2008)
MEX (2007)
GRC (2007)
CHL (2008)
Direct and indirect support for R&D
The challenge of sustainability
• There are numerous definitions of sustainability
– Brundtland Report (Our Common Future)
"Sustainable development is development that meets the needs of the
present without compromising the ability of future generations to meet
their own needs. It contains within it two key concepts:
the concept of needs, in particular the essential needs of the world's poor,
to which overriding priority should be given; and
the idea of limitations imposed by the state of technology and social
organization on the environment's ability to meet present and future
• The Brundtland report changed the discussion about environmental
protection and shortages of raw materials into a discussion about
social and organizational issues
• The environment no longer an exclusive concern of the Ministries of
Environmental affairs
– Moving beyond regulation
– Moving beyond technology – but not without technology
The challenge of sustainability
• People, planet, profit
• The great social compromise that guaranteed social peace and
welfare in most advanced countries in the second half of the 20th
century was based on
Mass production and mass consumption
Extensive use of fossil fuels and other raw materials
Destruction of nature
Large-scale, capital intensive technologies
• Recognition of the value of nature (planet) and the need to ensure
its ‘reproduction’ in the same way as labor and capital need to be
reproduced is the first step to the construction of a new social
– But who is negotiating for nature?
– What about the aspirations of the world’s poor?
– How to deal with still increasing human population?
The challenge of sustainability
• Creating new technologies
• Creating new values and new institutions
– social innovation
• Co-evolution of social and technological innovation
New innovation policies (1)
• Mainstreaming sustainability
“… the time has come to move sustainable development (SD) beyond
being considered as a separate, ‘green’ issue which is a priority for only a
few Government departments. (…) (T)his Government wants to
mainstream SD so that it is central to the way we make policy, run our
buildings and purchase goods and services.
Ministers have agreed an approach for mainstreaming SD which in broad
terms consists of providing Ministerial leadership and oversight, leading
by example, embedding SD into policy and transparent and independent
“The Big Society puts individuals and groups in the driving seat and
Government in an enabling role removing the barriers, where
appropriate, which prevent others from taking responsibility. More
empowered communities and a society where people are more involved
in social action such as volunteering should lead to increased well-being,
stronger communities and stronger social ties.”
UK Conservative-Liberal Coalition Government 2011
New innovation policies (2)
• Quadruple helix
“Quadruple Helix (QH), with its emphasis on broad cooperation in
innovation, represents a shift towards systemic, open and user-centric
innovation policy. An era of linear, top-down, expert driven development,
production and services is giving way to different forms and levels of
coproduction with consumers, customers and citizens.“
”Quadruple Helix is more of a continuum or space for innovation, rather
than one discreet model. Public authorities can develop environments
which both support and utilize citizen centred innovation activities.
Utilising its potential calls for a long-term cultural change of all
Arnkil et al. 2010
• Approach inspired by user involvement in innovation
– but broadening the idea to include ’civil society’ as a fourth actor next
to government, business and science/universities
Citizen-centred Living Lab-models
Main goal of
innovation activity
•To produce products
and services relevant
for citizens
Type of innovation
•Innovations relevant
for citizens
Initiators of
innovation process
•Develop commercial
products and services from
citizens’ innovations
•Support citizens innovation
•Create citizen relevant
•Decide which innovations
are needed/developed
•Support citizens’ innovation
•Support firms and
public authorities in
the utilization of
citizen innovations
Public authorities
•Support the development
of citizen innovations
•Provide tools & skills
•Offer dialogue
forums to citizens and
forums to participate in
decision making
Source: Arnkil et al 2010
New innovation policies
• Civil society and local government…
• Cities
– Hodson (2010) Can cities shape socio-technical transitions and how
would we know if they were?
• ‘Energy regions’
– Späth (2010) ‘Energy-regions’. The transformative power of regional
discourses on socio-technical futures
• Citizen initiatives in the field of energy
– Cooperatives for production of wind and solar energy for collective use
– Building (local) smart grids
New innovation policies (3)
• Transition management (TM) and strategic niche management
(SNM), notions developed by mainly Dutch scholars
– Both notions contribute an important role to 'transition experiments',
i.e. innovation projects in which actors in society learn about social
– In TM, experimenting is one of four activity clusters. Each cluster
represents a distinctive set of activities that together form a cyclical
and iterative process. These activity clusters are 1) structuring the
problem in question and establishing and organizing a multi-actor
network; 2) developing a sustainability vision, a transition agenda and
deriving the necessary transition paths; 3) mobilizing actors and
establishing and executing transition experiments; and 4) monitoring,
evaluating and learning. Experiments are thus explicitly part of a wider
set of TM instruments.
– SNM attributes a more central role to experiments and elaborates
upon setting up niches through 'smart experimentation. (…) Another
difference is that TM is positioned as a tool for social transitions, while
the entry point of SNM is often technical.
(cf. Raven et al 2010)
New innovation policies (3)
• The literature on TM and SNM often makes use of the multi-level
– Niche
– Regime
– Landscape
• An element TM and SNM have in common with the Quadruple Helix
is the idea that changes at the lowest (niche) level may affect the
regime level
– “(T)ransitions only occur through the fruitful coupling of
developments at all three levels.” (Geels & Raven 2006)
From local projects to a new trajectory
Global level
Shared rules (problem agendas, search heuristics,
expectations, abstract theories, technical models)
Local projects,
carried by local
by local variety
Emerging technical trajectory carried by local projects (Geels and Raven, 2006).
Criticism of the new innovation policies
• The UK government’s ‘mainstreaming’ of sustainable development
has been criticized for not making it a responsibility of the Prime
Minister himself and for abolishing the independent watchdog
commission appointed by the previous government
• The ‘Big Society’ idea has been criticized as "aspirational waffle
designed to conceal a deeply damaging withdrawal of the state
from its responsibilities to the most vulnerable.“ (Archbishop of
Canterbury Rowan Williams)
• Transition policies in the Netherlands, inspired by TM theorizing,
have encountered problems and have shown limitations, which are
to a large extent inherent to all policy making, but were also caused
by underestimating the ‘powers that be’ in the energy sector.
Criticism of the new innovation policies
• The idea that transition management could be added to existing
policies (adding a long-term vision and carrying out experiments),
without (from the start) impacting on those policies, may have led
to lack of debate and communication with those responsible for
current policies.
• Whereas SNM was always focusing on changes in technology and
therefore maybe had an excuse to neglect politics, TM was
explicitly focusing on social change and learning, but with little
attention for the politics involved.
• “Recent debates on how to ‘manage’ policy transitions to
sustainability have been curiously silent on democratic matters,
despite their potential implications for democracy.”
Hendriks (2009)
Creating new institutions
• The literature on new innovation policies is questioning some of the
underlying assumptions of innovation policies today
– Innovation is not just taking place in companies
– Innovation and technological change will not automatically move in
the desired direction and with the desired speed, if the institutional
environment is not appropriate
• Therefore, innovation policies in the era of sustainability will have
to enable other actors (users, civil society, citizens) to contribute to
and participate in innovation programs
• The creation of a new institutional environment, however, will not
always be a matter of simple regulation
• Visions of the future may be helpful in organizing experiments, but
they may also be leading in the wrong direction
– It is easier to block certain futures (like nuclear energy) than to
envision the relative importance of upcoming new technologies (like
various sources of alterative energy)
Creating new institutions
• If ‘experiments’, ‘niche projects’, and ‘local learning’ have to lead to
new higher level institutions, new ‘regimes’, possibly even new
values, they will have to become part of political processes, which
may be less than manageable
• New social institutions are seldom rationally designed, but rather
the outcome of sometimes long-lasting and complex processes of
debate and negotiation
• The literature on new innovation policies is paying considerable
attention to governments, but very little attention to parliaments
– Logical if you think in terms of policy making, but less logical if you
think of transformations in society
Creating new institutions
• The various forms of new innovation policy have some
‘evolutionary’ elements in common, in the sense that they call for
experiments and local, bottom-up action, i.e. on the introduction of
more ‘variety’ into the system
• They are less clear on the ‘selection environment’ i.e. on the ways
in which experiments and local initiatives are to be evaluated and
how the ‘best’ can subsequently be ‘institutionalized’ at the level of
society as a whole
• The selection environment will probably always be political and
• The idea of including ‘civil society’ in innovation programs is helpful,
but not necessarily democratic, because it also encourages various
special interest groups to engage in innovation experiments
Creating new institutions
• Compared to the present-day ‘consensus’ combining indirect
support for R&D with triple helix type programs and support for
high-tech startups, the idea of (somehow) including citizens in
innovation programs is an important step towards the creation of
new institutions
– But it cannot be assumed that citizens are always more open for
change than vested interest groups
– Mechanisms for the translation of local learning into political
programs will need to be developed – but can they be part of
government innovation policies?
• There are good arguments to limit innovation programs (as
opposed to indirect support) to sectors in which some proven
strength is already present (backing winners)
– But there is no guarantee that the winners of past decades will come
up with the winning technologies of future decades

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