Holistic Innovation Policy

This book, written by two experts on innovation systems and policy, aims at providing a theoretical framework for the conduct of innovation policy. Their main argument, as explained in the three first chapters of the book, is that successful innovation depends on not just one but a number of different “activities”, which hence need to be taken properly into account by policy makers when designing and implementing innovation policy. This is what they call “holistic innovation policy” in contrast to so-called “partial innovation policy” targeting just one activity (say R&D). The book can thus be read as a plea for changing policy practice away from the currently dominant “partial” policies towards a more holistic stance.

The attempt to get a firmer understanding of the working of innovation systems at various levels by emphasizing the various activities (or functions or processes) these systems entail has been a hallmark of Swedish innovation research for several decades already, as exemplified by the works of Bo Carlsson, Staffan Jacobsson, Anna Bergek and – not the least – Charles Edquist. In the current book seven such activities (knowledge, skills, demand, organizations, networks, institutions and finance) are taken into account, each with a separate chapter (chapters 4-10), followed by a chapter on the selection and combination of policy instruments and – finally – a summary. The seven activity chapters vary somewhat in ambition and style. Several survey the activities as such, covering a broad range of relevant literature, rather than concentrating on the nitty-gritty of policy practice. Nevertheless, the chapters on demand and finance differ by concentrating on specific policy instruments, public procurement in the first instance and early stage finance in the other, and Charles Edquist’s own experience from working with policy makers on these issues in the Swedish context. This is certainly interesting reading. But it also means that other aspects than those particularly highlighted by the authors are not dealt with in much detail, for example other types of demand- oriented innovation policies than public procurement, or finance beyond the very early stage. Nor are relevant policy experiences from other countries  – i.e., a comparative focus – central to the discussion.

A central topic that figures prominently both in the introductory and closing chapters of the book concerns the identification of issues meriting policy makers’ attention. The authors repeatedly state that policy makers’ “ultimate objectives” (e.g., economic, environmental and so on) need to be “translated” into “direct objectives” for which innovation may be relevant. Assuming that “direct objectives” can be identified the next step would according to authors be to assess the extent to which the innovation system lives up to the expectations. If not a “policy problem” may be said to exist, e.g., in the form of “deficiencies, imbalances etc. in the activities of the innovation system” (p.45), which would be the basis for design and implementation of innovation policy.  Sometimes, the authors point out, such problems may be the “unintended consequences” of policy, which would need to be identified and rectified.

The book is an important and timely contribution to the literature on innovation policy. However, despite its convincing argument for more holistic policy making, the volume contains little on how this can be done in practice. In fact, there is no discussion – not a single example – of how the “translation” between so-called “ultimate” and “direct” objectives may be done. For example, how may innovation – and innovation policy – contribute to solving the climate challenge? This very timely question, which has been central to innovation policy discussions among academics and policy makers for some time already, is not even raised. Another problematic aspect concerns the lack of attention to the capabilities required for successful design and implementation of innovation policy. Arguably, the holistic policies they advocate may be very demanding in this respect. They note that capabilities might not suffice in many cases, with the consequence that problems may not be “solvable by innovation policy” (p.236). This is hardly the place to stop, though. Rather, a relevant question, that would have deserved more attention, is what can governments do to raise the capabilities for innovation-policy-making to the required level. Moreover, presumably the broad perspective they recommend would mean bringing in actors from a variety of activities, sectors and layers of government into the decision-making process? However, there is surprisingly little attention to what types of changes in governance holistic innovation policy may require.

Susana Borrás and Charles Edquist: Holistic Innovation Policy – Theoretical Foundations, Policy Problems and Instrument Choices, Oxford University Press, 2019, 295 pages