Challenge-Driven Innovation Policy: Towards a New Policy Toolkit

Abstract

Policy makers are increasingly embracing the idea of using industrial and innovation policy to tackle the 'grand challenges' facing modern societies. This article argues that through well-defined goals, or more specifically 'missions', that are focused on solving important societal challenges, policymakers have the opportunity to determine the direction of growth by making strategic investments across many different sectors and nurturing new industrial landscapes, which the private sector can develop further, and as a result induce cross-sectoral learning and increase macroeconomic stability. This 'mission-oriented' approach to industrial policy is not about 'top down' planning by an overbearing state; it is about providing a direction for growth and increasing business expectations about future growth areas and catalysing activity that otherwise would not happen. It is not about de-risking and levelling the playing field, nor about supporting more competitive sectors over less since the market does not always 'know best' but tilting the playing field in the direction of the desired societal goals, such as the sustainable development goals. To achieve this requires a different policy framework, what we call the 'ROAR' framework, which involves strategic thinking about the desired direction of travel (Routes), the structure and capacity of public sector Organisations, the way in which policy is Assessed and the incentive structure for both private and public sectors (Risks and Rewards). The article argues that if we want to take grand challenges such as the SDGs seriously as policy goals, market shaping should become the overarching approach followed in various policy fields.

Organizational Culture as an Indication of Readiness to Implement Industry 4.0

“…Innovations are considered to be the processes of 'economy-wide learning' and 'self-discovery' that help companies to provide analytical linkages connecting macroeconomic financial stability and microeconomic firm behavior. Companies will seek to innovate if they are confident about their technological and market opportunities in future, otherwise, they will not innovate [20].…”

Supporting food systems transformation: The what, why, who, where and how of mission-oriented agricultural innovation systems

“…Also, it has been argued that agricultural innovation systems, in view of them supporting particular transition pathways towards future food systems, need to become ‘mission-oriented’ ( Klerkx and Rose, 2020 ; Pigford et al, 2018 ). These missions need to tackle grand societal and planetary challenges, such as ecosystems integrity, biodiversity, climate change mitigation and adaptation as also comprised by the Sustainable Development Goals ( Mazzucato et al, 2020 ).…”

The Role of Social and Institutional Contexts in Social Innovations of Spanish Academic Spinoffs

“…Furthermore, governments should continue to develop fiscal and normative programs to create a specific regulatory environment for these companies in order to stimulate their creation and future development. As Mazzucato [122] suggests, the state should reinforce its role as creator of social innovations and markets, and specifically, policies not should be focused "on technological challenges alone, but rather on areas traditionally falling under public services such as education or welfare state, and entail changes across various economic and policy sectors" [123] (p. 6). Focusing on Spain, the information provided by the COTEC Report 2017 [124] reveals that Spain does not have an explicit and well-articulated social innovation policy at the state level, since it is ranked 26th out of 45 countries analyzed by the Social Innovation Index.…”

“…This recommendation is aligned with the arguments of Mazzucato [126], who noted that inclusive and sustainable innovation policy requires a new framework based on market co-creating. Specifically, policies should "be broad enough to engage the public, enable concrete missions, attract cross-sectorial investment, and remain focused enough to involve industry and achieve measurable success" [123]. Moreover, universities should continue to internalize the cultural values related to corporate social responsibility in order to enable their transmission to research groups during the development of their research for the creation and commercialization of scientific knowledge that can meet social demands.…”