Demand-oriented innovation policy: Mapping the field and proposing a research agenda for developing countries

Abstract

This article conducts a scoping review of demand side innovation policies and its associated instruments in relevant English language academic literature. Demand-side innovation policies aim to improve contextual conditions to encourage innovation adoption to address government-defined societal challenges. From the demand approach, innovation policy is expected to involve a directionality, which originates from collective priorities around relevant problems. Based on a scooping review of the innovation policy literature from the demand perspective, this research has characterized trends in the discussion about innovation policies that target such challenges, a perspective that complements the traditional supply side policy instruments. Findings indicate that literature on demand-side policies has mainly addressed energy and sustainability issues in European countries and China. Additionally, although demand-side policies have been advocated for a relatively long time, the literature recognizes that a policy mix involving also the supply-side can be more effective in encouraging innovation. In Latin America, demand-side policies have been poorly understood, leading to a defective implementation of policies and instruments. The stage of research on demand-side policies is still evolving and this article advances research propositions on innovation policy, with a deep focus on how they can be implemented in innovation-lagging developing countries.