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policy approaches for innovation. Presentation 10 UNU-MERIT Phd Programme Innovation Studies and Development (2006-2007). René Kemp. Innovation is many things.

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policy approaches for innovation

policy approaches for innovation

Presentation 10

UNU-MERIT

Phd Programme

Innovation Studies and Development (2006-2007)

René Kemp

slide3

Innovation is created in distributed systems of knowledge and its success depends on economic frame conditions and many other factors not under the control of the innovator

rationale for innovation policy market failure
Rationale for innovation policy: market failure
  • private markets provide too little incentive for innovation, because of:
    • knowledge spillovers
    • Market entry barriers
    • Information imperfections

This is the traditional economic argument which is used by policy makers

  • As a guide to policy it is poor
system failure as a rationale for innovation policy
System failure as a rationale for innovation policy
  • System failures refer to inappropriate infrastructure of knowledge, poor capabilities to adapt, institutional barriers and lock-in
  • Here it is not so much the divergence between private benefits and social benefits but the innovation systemitself that is a hindering factors, by being insufficient developed for certain types of innovation
slide6
Smith (2000) distinguishes the following forms of system failure:
    • Infrastructure problems about inadequacies in the physical infrastructure (transport, etc), the scientific infrastructure (high-quality universities and research labs, technical institutes, etc) and the network infrastructure (IT, telecom).
    • Transition problems: difficulties that arise when firms and other actors encounter technological problems or face changes in the prevailing technological paradigms that exceed their current capabilities.
    • Lock-in problemsderived from the socio-technological inertia
    • Hard and soft institutional problemslinked to formal rules (regulations, laws) as well as more informal and tacit ones (social and political culture for instance).
because of the many factors shaping innovation
Because of the many factors shaping innovation

Countries have multiple policies for innovation:

  • Support of R&D
  • Knowledge transfer
  • Investment support
  • Green taxes
  • Science and technology programmes
  • Skills and educational policies
  • Competition policy
  • Regulations for the uptake of clean technologies
government policy and sustainable innovation in the netherlands
Government policy and sustainable innovation in the Netherlands

Courtesy of Geert van der Veen

there has been a shift towards more integrated approaches
There has been a shift towards more integrated approaches
  • Which combine push and pull
  • having a long-term focus
  • Involving a platform of interaction
  • Bringing together different knowledge holders
  • With government as a facilitator (asking the platforms to define programmes and offer suggestions to policy)
long term programming
Long term programming

Courtesy of Geert van der Veen

long term programming11
Long term programming

DTO-programme (Sustainable Technology Development) in the NL

  • Scope: 2040
  • Factor 8-thinking
  • Approach towards either functions in society (living, food, transport) or sectors (chemical sector)
  • Backcasting
  • Stake holder involvement in idea generation
  • Technological focus

Courtesy of Geert van der Veen

top down elements
Top-down elements
  • 26 transition paths
  • Platforms for energy transition themes
    • new gas
    • sustainable mobility
    • green resources
    • chain efficiency
    • Sustainable electricity
  • Interdepartmental programme directorate energy transition (IPE)
improving the innovation system
Improving the innovation system
  • Butter argues for a three layered approach:
  • -Layer 1:Innovation climate: the creation of a supportive generic climate for sustainable innovations.
  • Layer 2: Singular innovations: the development, dissemination and adoption of singular innovations in individual organisations.
  • Layer 3: System innovations: the stimulation and alignment of singular (individual) innovations that will contribute to the system innovation.
technology specific innovation systems tis
Technology-specific innovation systems (TIS)
  • … network(s) of agents interacting in a specific technology area under a particular institutional infrastructure to generate, diffuse and utilize technology (Carlsson and Stankiewicz, 1991)
  • Components are:
    • Actors
    • Artefacts
    • Networks
    • Regulations
    • Attitudes
    • Formal knowledge

(Bergek, Jacobsson and Sanden, 2006)

key processes functions of tis
Key processes (functions) of TIS
  • Informing the direction of search
  • Market formation
  • Development of formal knowledge
  • Entrepreneurial experimentation
  • Resource mobilisation
  • Materialisation
  • Legitimation
  • Development of positive externalities
niche policies
Niche policies
  • A focal point for transition policy could be the creation of niches for promising technologies. Historical analysis of the innovation process across a large number of industries shows that new technologies typically commercialise initially through small niche markets, in which experience is gained and cost reductions through learning can be made (see Utterback, 1994; Kemp et al., 1998; Foxon, 2003)
  • Market development is driven not just by price signals and expectation of profits, but also by the development of appropriate knowledge and skills bases, and the formation of institutional structures which support the emerging new technologies (cf. Norberg-Bohm, 1999a,b; Hoogma et al., 2002).
slide18

Cartoon: Paul Hoogma

Strategic niche management?

slide19

What is SNM?

SNM is a method for introducing new technologies in society, which relies on the real use of new technologies in selected settings (niches). The niches consist of selected domains of application in which the technology (or new mobility system) is already attractive to use due to specific circumstances.

Experiences in the niche are used to inform decisions about technical improvement and support policies.

Strategic niche management is thus a concentrated effort to create niches for promising technologies. The niche may be a technological niche or market niche.

slide20

The aims of SNM are

  • to articulate the necessary changes in technology, and in the institutional framework that are necessary for the economic success of the new technology;
  • to learn more about the technical and economically feasibility and environmental gains of different technology options ─ i.e., to learn more about the social desirability of the options;
  • to stimulate the further development of these technologies, to achieve cost efficiencies in mass production, promote the development of complementary technologies and skills, and stimulate changes in social organisation that are important to the wider diffusion of the new technology;
  • to build a ‘constituency' behind a product─ of firms, researchers, public authorities ─ whose semi-coordinated actions are necessary to bring about a substantial shift in interconnected technologies and practices.
slide23

Cartoon: Paul Hoogma

…the innovation should be able to survive without protection measures…

snm is being used successfully in bangladesh for treadle pumps and for micro irrigation
“SNM” is being used successfully in Bangladesh for treadle pumps and for micro-irrigation
  • (i) A research and technology development function. Identifying a niche technology and undertaking adaptive research and development to ensure that it works in the smallholder context.
  • (ii) A marketing, production and distribution function. Establishing the mechanisms/facilities/ skills by which the technology can be produced and distributed. Together with a marketing/ promotion function, generating awareness of the technology and creating a demand for it among smallholders.
  • (iii) A sustainability function. Disengaging itself from intensive involvement in facilitating both technology promotion and marketing functions, so that the program is ongoing even after IDE’s involvement is fully withdrawn.

Source: Clark, Hall, Sulaiman and Naik