Innovation Policy and the Economy: Introduction to Volume 20

The idea of the innovation policy dance suggests that innovation theory, policy and practice correspond to each other. This chapter analyses these three elements of innovation studies in two highly unequal societies: Brazil and South Africa. The question is how innovation theory, policy and practice account for the steep income inequalities in developing countries. How do innovation policies address both high- and low-income demands? The analysis finds that theories, policies and practices still don’t fully account for the characteristics in highly unequal developing nations. Theories and policies continue to derive from experiences in the industrialized nations. The analysis of Brazilian and South African innovation policy shows that the discourse and practice on social and pro-poor innovation are still rudimentary and not prioritized. The Brazilian government passed specific innovation legislation and runs skills development programmes to boost innovation. The South African programmes show very little focus on social innovation. Both governments adopted legislator and institutional design from Europe as opposed to designing their innovation policies according to the local practitioners’ needs. In these instances the innovation policy dance is out of sync.

Aim. The work aimed to develop an approach to assessing the impact of the implemented innovation policy on the indicators of digital transformation and the innovation climate in Arab countries, especially developing ones. Objectives. The work seeks to analyze the problems faced by Arab countries, especially developing ones, in the formation and development of innovation policy; to determine the key indicators of digital transformation and innovation climate; to create assessments of the impact of innovation policy on the indicators identified.Methods. The study was based on the descriptive and comparative approaches used in the analysis, as well as on the quantitative statistical approach (calculation of the effect size) used to compare the impact of innovation strategies, policies and programs on digital transformation indicators relative to groups of developed countries and countries in the early stages of generating the innovation policy and strategy.Results. The study revealed that the elements of innovation policy have a significant impact on the indicators of digital transformation and innovation climate in countries. The effect size between these groups of developed and developing Arab countries is large. Three realistic options for forming innovation policy were proposed in order to level out this effect, and their expected results for developing Arab countries were determined.Conclusions. High income developed Arab countries implementing innovation policies have proven their ability to accept the digital transformation of the economy and achieve high indicators in the values of global strategic innovation indicators. Developing Arab countries have the opportunity to improve the innovation climate, economic and social conditions, increase the level of international and regional competitiveness, using the elements of the developed scheme for creating the innovation policy in accordance with the possibilities. Based on the study results, policymakers are invited to review and refine the strategies and programs being implemented, as well as to attempt to introduce innovative measures to accelerate the process of digital transformation and create a highly competitive innovation climate.

The presented study summarizes the results of the implementation of import substitution and innovation policies in Russia. It is established that cluster structures created and supported by the state are primarily meant to solve the problems of import substitution and innovative economy formation in the country. Aim. The study aims to assess the prospects for the development of cluster initiatives as a key tool for implementing import substitution and innovation policies in the country. Tasks. The authors examine the role and importance of clusters in the development of regions and countries; summarize theoretical models of cluster structures; determine stages in the development of cluster initiatives in modern Russia; analyze the results of the formation of industrial and innovative clusters; formulate conclusions regarding the problems of innovation policy implementation; provide recommendations to facilitate the development of cluster initiatives and innovative economy in Russia. Methods. This study uses general scientific methods of cognition to analyze the results of the formation of cluster structures meant to facilitate the implementation of innovation and import substitution policies in Russia and proposes possible directions and tools for the formation of Industry 4.0 in the country. Results. The study shows that the current solution to the problem of import substitution based on industrial clusters is unsatisfactory. Effective support for the activity of innovation clusters also does little to increase the share of innovative products created in Russia. At the same time, it will obviously take at least 10-15 years to see the effects of the implementation of innovation and import substitution policies, which makes it impossible to draw a definitive conclusion about the effectiveness of the examined policies or to assess the overall activity of cluster structures in the country. Conclusions. Based on the results of the study, it is concluded that instead of extractive development institutions that hinder the country’s development, civil and entrepreneurial initiatives, Russia needs inclusive development institutions that are now practically absent but would allow citizens, organizations, and companies to influence economic and political processes. Furthermore, special government support is required for the rapidly growing medium-sized tech companies, which can become a source of economic growth for the country and a factor of global competitiveness in the world market in the next 10-15 years. Without their active development, building Industry 4.0 is impossible.

PurposeThe purpose of this paper is to examine how national innovation policies strategically interact to form emergent de facto global entrepreneurship and innovation policies.Design/methodology/approachReviews the innovation economics theory and policy literature, synthesizing the existing work into three models (autarky, cooperation and competition), then adds four new models of strategic interaction (asymmetric information, duopolistic competition, competitive factor mobility and complementary assets).FindingsThe different models predict very different outcomes. Therefore, it matters which model is true. Entrepreneurship and innovation policy needs to start with an improved science of strategic global interaction of national innovation policy.Research limitations/implicationsConceptual approach only, without empirical analysis, calls for empirical analysis to test the different models.Practical implicationsPoints to the problem of absence of global coordination in innovation policy arising from strategic interactions between national innovation policies. Recognizes that entrepreneurship public policy is caught in this strategic game, and that there are missing global institutions here.Social implicationsImproved innovation policy should enable more effective entrepreneurial environments.Originality/valueProposes seven models for understanding global strategic interaction of innovation policy, out of which four are new. These new ones are highly relevant to entrepreneurship policy.

The link between innovation and education policies has strengthened over time, becoming very close in contemporary capitalism. Today, innovations depend on specialised knowledge, which is mostly owned by a university-trained working force, and increasingly emerge from university-industry collaboration in R&D activities. At the same time, the state’s commitment to widening the participation in higher education is one of the main levers for inequality reduction. Thus, education and innovation policies have become more and more strategic axes of the political economies of advanced economies. Using many indicators, the chapter highlights that each growth model has its style of intervention in education and innovation policies. In inclusive growth countries – especially those of the egalitarian variant – public funding is higher and universities represent a fundamental cornerstone for development policy, but also for inequality reduction. So far, the competitiveness of the economic systems mainly comes from private investments. In these cases, the state has mainly an ancillary role. It follows that the effects on the reduction of inequalities are lower. Finally, the non-inclusive low-growth model shows a modest investment in education and innovation policies.

Is what is known from research on systemic innovation reflected in innovation policy, both as guiding principles and as actions? This paper highlights a major paradox in the translation of research on innovation into innovation policy in Australia. The innovation studies literature has established the central role of the vocational education and training (VET) system and VET-trained workers in technology generation, diffusion and incremental innovation. Research has also established that the pattern of innovation in Australia, compared with that in many other OECD countries, makes firms more reliant on VET skills to implement innovation. Despite this recognition in the innovation literature, this paper argues that the VET system is largely excluded from government innovation policy and programmes in Australia. Evidence for this exclusion is derived from a textual analysis of the principal Australian government policy statements and government-sponsored studies of the Australian innovation system, and from an analysis of the interest groups represented on government innovation advisory and policy structures. Tentative explanations are advanced for this exclusion and a number of important benefits are identified for the VET system and the wider innovation system arising from closer integration of VET into innovation policy

Innovation policies under the Transformative Innovation Framework (TIF) aim to change sociotechnical systems. The Framework considers that production and consumption patterns should satisfy human needs and also be oriented by sustainable development and inclusive goals. Differently from earlier innovation models, transformative innovation aims to articulate new problems and actors neglected by existing innovation policies. The TIF has been considered for regional policies in Colombia under the National Science and Innovation Policy for Sustainable Development of Colombia, the Green Book 2030 (Colciencias & SPRU, 2018). From this perspective, we analyse the (mis)alignment between theory (the TIF), Science, Technology and Innovation (STI) policies at the regional level, and practices implemented by policy actors, universities and civil society organisations. These three components create the governance of the transformative innovation policy in Colombia. Our theoretical approach is focused on the territorial perspective to investigate regional innovation policy in Colombia. This chapter aims to analyse how the TIF has been taken by policy actors and which possibilities and limits brings at regional level in Colombia. We implemented a qualitative approach in our research and the data collection covered 31 semi-structured interviews during 2019 with actors involved in the STI regional policies in Colombia, among those, government officers, university faculty members and researchers and civil society.

Innovation policy is embedded in local contexts that shape its courses and outcomes. However, the role of context is often neglected in the design and implementation of innovation policies. Critical questions such as what innovation actually means, what kind of innovation policies may be beneficial in a given country and for specific sectors, regions and actors, and what kinds of policies and programs can help promote innovation in a feasible and effective manner are rarely addressed. Focusing on Mediterranean Arab countries with their political and economic proximity to the EU, this article proposes three conceptual shifts towards a context-sensitive approach to innovation policy design and analysis. Drawing on insights from relational economic geography, interpretive policy analysis, and science and technology studies, the article discusses how these three shifts enable new perspectives on innovation policies in Tunisia, Jordan, and Egypt. The article suggests a research agenda that can stimulate discussion and lead to a new approach in innovation studies and policy for Arab countries in the EU's neighborhood.

What Should We Expect from Innovation? A Model-Based Assessment of the Environmental and Mitigation Cost Implications of Climate-Related R&D

This paper uses both descriptive and comparative approaches to discuss science, technology and innovation policies in Sudan. Differing from the studies in Sudanese literature, a novel element of our analysis is that we examine innovation, science and technology policies after integrating recent secondary and primary data. We examine the main factors hindering and those contributing towards the promotion of research and development (R&D), innovation, science and technology (S&T) in Sudan. We find that insufficient financial and human resources, weak cooperation between universities and the productive sector, lack of management and organization ability, lack of R&D culture, lack of favourable conditions and necessary facilities hampered the potential role of R&D to contribute towards the development of local technologies, promotion of innovation and science, technology and innovation (STI) policies and economic development in Sudan.

1HE LITERATURE MAKING USE of quantitative data in the comparative analysis of policy outputs across the American states has largely been dependent upon public expenditure levels as indicators of policy efforts. One of the few potential altematives has been measurements of policy innovativeness, most recently reintroduced for political analysis by Jack L. Walker.' While policy innovation might be measured in a number of ways, Walker has been especially concemed with a general tendency toward innovativeness of state govemments, or as rural sociologists refer to it, adoptionproneness.2 Certainly, American political folklore is rich in suggesting that some states are innovators while others are laggards. Findings by others in later research, however, cast some doubt upon not only the adequacy of the quantitative measures devised

In OECD countries, Science, Technology and Innovation (STI) policies were seen as key aspects of coping with the Covid-19 pandemic. Now that the pandemic is over, identifying which policy mix portfolios characterised countries in terms of their non-Covid-19 related and Covid-19 specific STI policies fills a knowledge gap on changes in STI policies induced by exogenous shocks. The descriptive nature of this exercise sheds light on the emergency phase, which was addressed in different ways by countries with similar STI policy portfolios in the last decade before the pandemic. Using information on STI policy initiatives in OECD countries, this paper proposes a multidimensional analysis to classify policy initiatives based on both codes (of innovation policy themes, policy instruments and target beneficiaries) and free text policies’ descriptions. Based on text mining and clustering techniques, the multidimensional analysis highlights semantic similarities between the combinations of codes and terms, making it possible to identify policy mixes that characterise non-Covid-19 related and Covid-19 specific STI policies. The cross-country comparison draws attention to the specific policy mix portfolios implemented by countries during the pandemic. The paper contributes to the literature on innovation policy mix in terms of research methods and results in identifying STI policy portfolios and groups of countries with similar structural composition of their innovation policy portfolios, implementing a range of STI strategies in tackling the pandemic. Policy implications of the findings are discussed, with a forward-looking perspective for the analysis of post-pandemic STI policies.

The article carries out a comprehensive study of innovation and investment policy as a tool for boosting human capital development in Ukraine, considering the deep transformation processes that intensified after the start of the full-scale war in 2022. In the context of the growing role of knowledge, digital technologies, and intellectual capital, effective coordination of innovation and investment policy is a determining factor in ensuring sustainable development. A comparative characteristic of these policies made it possible to identify their functional features, mechanisms of influence on human capital, and their role in the modernization of the knowledge economy. Innovation policy is characterized as a source of demand for new knowledge, competencies, technologies, and investment policy as a material and financial basis for implementation. The strategic prerequisites until 2022 were analyzed, particularly regulatory documents and program guidelines forming state innovation and investment policy foundations, including the National Economic Strategy 2030, digitalization strategies, entrepreneurship support, and scientific and technological development. It was determined that despite the political desire for reforms, institutional capacity and financing remained limited, and the investment indicators in R&D were significantly lower than in Europe. The study focuses on the transformation of state policy in innovation and investment after the start of the full-scale invasion. It reveals changes in strategic priorities, reorientation to support economic sustainability, preservation of entrepreneurial potential, digital transformation, and international cooperation. The role of interdepartmental coordination, public-private partnerships, and flexible instruments for stimulating human capital is increasing in the new conditions. Special attention is paid to analyzing the problems of human capital development in wartime. Three key blocks of threats are identified: first, large-scale losses of labor resources due to mobilization, emigration and forced displacement; second, physical destruction of educational, scientific and innovative infrastructure; third, increased socio-economic instability, which led to a reduction in investments in human development by the state, business and households. It is emphasized that boosting human capital development requires financial resources, strategic management, an adaptive education system, flexible professional training, and preservation of the nation's intellectual core. Summarizing the results, the authors justify the need to implement a coordinated, multi-level innovation and investment policy as a key condition for the restoration and qualitative renewal of human potential in the post-war period.

This paper examines the implication of establishing innovation policy accelerator to enhance the effectiveness of implementing, usage as well as scaling-up the innovative public policy in the context of government intervention, especially in developing countries where economic and social demands constantly require the government to come up with innovative policies to tackle the problems and propel the competitiveness of the country in the international arena. Various models of policy and government lab are explored and discussed in detail. The paper primarily investigates the case study of Thailand Innovation Policy Accelerator (THIPA) which was in the early stage and identifies the key success factors as well as limitations in implementing such kind of program in Thailand. The paper concludes with the recommendations for moving forward with the innovation policy lab in developing countries.

Industrial innovation processes are becoming more open. The large, vertically integrated Research and Development laboratory systems of the 20th century are giving way to more vertically disintegrated networks of innovation that connect numerous companies into ecosystems. Since innovation policy ultimately rests on the activities and initiatives of the private sector, it is vital that policy follows this evolution.Previous innovation policies relied on large companies to act as the engines of innovation in the EU. While large companies remain quite relevant to innovation within the EU, they themselves report that their processes involve many more small and medium-sized enterprises (SMEs) and other contributors outside their own walls. Therefore, innovation policy must also move outside the walls of these large companies and consider the roles of human capital, competition policy, financing, intellectual property (IP), and public data in promoting an environment of open innovation that is equally beneficial to SMEs.In this chapter, we combine new research and analysis on open innovation with focused interviews of major participants in the European innovation system. The result is a series of recommendations for public policies that could, if implemented, improve the climate for open innovation to take place in the European Union — and thereby improve the competitiveness of the European economy overall. Taken together, these recommendations comprise an informal “charter” for EU open innovation policy.