Transformative Innovation Policy: An Analytical Review of Key Methods and Challenges

Transformative Innovation Policy (TIP) is an emerging approach to science, technology, and innovation policy that addresses social and environmental challenges. While TIP literature highlights the importance of considering multiple innovation pathways, it often overlooks the injustices hindering them. This paper explores how the Capability Approach (CA) can enhance the analysis and practical considerations of directionality within the TIP. We begin by discussing the TIP’s directionality principle, adopting a more politically nuanced view that sees innovation as irreducible pluralities of possibility in balanced ways ([Stirling, A. 2024. “Responsibility and the hidden politics of directionality: opening up ‘innovation democracies’ for sustainability transformations.” Journal of Responsible Innovation 11 (1): 2370082.]). Based on this conception of directionality, we propose rethinking TIP principles, emphasizing the democratic aspect of innovation and, to this end, introducing a new principle: democratic decision-making. We argue that strengthening democracy is vital for continuously refining and improving collective decision-making processes locally and globally, making it an essential feature for TIP and innovation policy in general. Furthermore, we examine the core elements of the CA – capability, agency, and conversion factors – and demonstrate how these can inform TIP by adding justice considerations to its core framework. This potential is illustrated through a case study, showing how the CA can guide specific considerations in TIP policy engagements. Finally, we conclude by discussing the mutual benefits: how TIP’s directionality can be enriched by the CA, and conversely, how the CA can be enhanced with the new understanding of TIP directionality.

Transformative innovation policy or how to escape peripheral policy paradox in European research peripheral countries

Government policies increasingly focus on transformative innovation policy (TIP), as programmes are being reoriented towards addressing societal challenges and contributing to sustainability transitions. Evaluation practices need modification to keep up with this change. While a small number of frameworks for TIP evaluation have been proposed, building upon different sustainability transition approaches, little is known regarding the extent to which TIP thinking has been integrated into policy evaluation practice. Hence, there is a need, first, to understand the implications of TIP for evaluation, based on the TIP literature and, second, to investigate the extent to which TIP thinking is used in innovation policy evaluation practice, and the main challenges policymakers face in making evaluation more transformation oriented. To do this, we adapt Edler et al.’s (2012, The Practice of Evaluation in Innovation Policy in Europe’, Research Evaluation, 21: 167–82) innovation policy evaluation dimensions to create a framework within which to develop an archetypal TIP programme evaluation, based on the literature. We then investigate the take-up of TIP principles in evaluation in the specific case of Sweden. We use a cross-case comparison of three Swedish innovation programmes, namely the Vinnväxt programme for sustainable regional growth, Challenge Driven Innovation, and the Strategic Innovation Programmes, to analyse the extent to which innovation policy evaluation practice aligns with this archetypal framework. Finally, we identify three challenges policymakers face when trying to reorient evaluations towards being more aligned with this archetypal framework.

This paper criticizes attempts to present narrow perspectives on innovation policy as reflecting the use of the concept innovation system. While it is correct that innovation policy, at least until recently, has given higher priority to economic growth than to global challenges such as climate change and income inequality this is in no way immanent in the innovation system concept. To illustrate, the author introduces concepts and perspectives related to the innovation system approach which are particularly useful, when it comes to develop innovation policies aiming at system transformation. It is concluded that there is a need to combine different theoretical framings as inspiration for transformative innovation policy. In addition, all framings need to have a double focus on climate change and global income inequality, and they need to go beyond national perspectives and consider policies aiming at system transformation at the global level. While the paper refers to empirical illustrations it is principally conceptual.

This article conceptualizes the role of social innovation (SI) in transformational innovation policy, identifies policy options, and points out potential risks of mobilizing SI for transformations. We illustrate our conceptual claims based on selected policy examples and propose a set of distinctions about the basic role of policy for SI in the context of transformation. We distinguish the importance of SI for the two policy approaches: transformative innovation policy and mission-oriented innovation policy. It follows that politics must differentiate between the various types of SI and their different significance for missions and transformations. To decide whether and how policy intervenes, ex ante and ex post analyses of the transformational effects of SI and the policies that act on them must be developed and applied. It is crucial to accompany and promote the diversity of SIs politically in such a way that they can constructively unfold their transformation potential.

The entrepreneurial and innovative activities that universities perform in addition to teaching and research have been aligned to an Innovation Systems Policy framework, which has been the dominant paradigm of innovation policy for several decades. However, Innovation Policy is being reframed in response to the growing recognition that inequality, poverty, climate change, and environmental challenges persist and are deepening despite substantial public investment in science and technology and the growth of university outreach activities associated with the entrepreneurial Third Mission vision. This paper outlines an alternative Transformative Innovation Policy agenda that unpacks the role of Universities in social change. This conceptual framework is operationalised through a description of the research practices that would underpin a Transformative Innovation Policy mission for Universities in addressing major social changes associated with obesity, decarbonisation of transport, ocean plastics, and pandemics.

The aim of this article is to improve knowledge about how directionality is implemented in transformative innovation policy and mission-oriented innovation policy. Academic literature conceptualizes attention to societal challenges as the directionality of innovation systems. Directionality requires an opening-up to include actors from the demand side of innovation processes. But this opening-up raises questions about who determines the direction of transformative change. In Sweden, transformative innovation policy has taken the form of strategic innovation programmes. A case study of one programme, Internet of Things Sweden, provides the opportunity to examine how directionality is implemented. The analysis shows how a focus on demand articulation made it possible to avoid making decisions about the direction of change. Innovation projects that mimicked public procurement limited the potential for radical transformative change. However, policy layering was an enabling factor at the urban level, where regional innovation actors facilitated the participation of urban infrastructure companies.

Geopolitics and global security increasingly shape the conditions for energy innovation and innovation-industrial policies and, hence, also transformative innovation policy (TIP) that aims for systemic innovation generating environmentally and societally beneficial systemic change. Connections between TIP and security/geopolitics have been less explicit previously but have heightened after the global geopolitical context has become more turbulent, with many countries increasingly oriented to protectionism and narrow conception of security. This paper contributes to an emerging debate on TIP, security, and geopolitics, drawing examples from the energy and digital sectors. It centres on the core principle of TIP—directionality—to explore potential interconnections with geopolitics and security. It also provides an overview of the interconnections between transformative innovation and geopolitics/security in three continental contexts: energy transition in Europe and Asia, and digitalization in Africa. Via exploring the phenomenon in the three contexts, we find that, although increasing attention is given to directionalities towards environmental and social sustainability, the prioritization of economic growth and traditional security appear to undermine them. Directionality is essential for realizing sustainability in a world undergoing energy transitions and rapid digitalization. Yet, recent global security and geopolitics developments may mostly hinder TIP-based directionalities in practice, unless specific policy focus and experimentation is placed at finding and employing synergies.

Transformative innovation policy: Addressing variety in an emerging policy paradigm

The focus and instruments of innovation policy have changed fundamentally over the last decades. Recently transformative innovative policy has caught the attention of scholars and policymakers, who argue that this is a new shift in the policy discourse. Even though grand challenges such as global warming and migration flows, as well as technological change such as artificial intelligence and industry 4.0 have fired the debate on transformative innovation policies in recent years, it has a long history - even going back to Schumpeter. This book chapter unfolds the historical and conceptual roots of transformative innovation policy, compares critically the different strands of literature, and discusses important questions for future research

The Transformative Innovation Policy (TIP) views the university as part of the national systems of innovation. Furthermore, higher education institutions are at the core of such policy. This chapter presents the contribution the Colombian University is making to selected United Nations Sustainable Development Goals (SDGs). The SDGs include: SDG 4—Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all; SDG 16—Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and effective, accountable, and inclusive institutions at all levels; and SDG 17—Strengthen the means of implementation and revitalize the global partnership for sustainable development. The chapter describes the manner in which Colombia University was involved in drafting the National Science and Innovation Policy and document the importance of the University as a fundamental axis for a transformative structure. This is evident in the manner in which the University became a center for the generation and dissemination of knowledge, basic and applied research, and technology transfer. Such academic activities can be aligned with the TIP by following a series of recommendations to develop a public innovation policy that contributes to the country’s achievement of the 2030 Sustainable Development Agenda and its 17 interlinked SDGs.

In response to the need for exploring transformative innovation policy (TIP) implementation dynamics across sectors and contexts, this paper examines the emergence of TIP in the Chilean agri-food sector. Our findings indicate that TIP has been developing in recent years, primarily in high-level policy discourses, while implementation efforts and the coordination of concrete instrument mixes lag behind. Contextual factors strongly influence TIP development, which include (1) the organization of public administration, (2) national political dynamics, (3) national policy cultures, and (4) geographical contexts. Importantly, our work emphasizes the need for developing policy capabilities and underscores the significant role of proto-institutions in supporting TIP development, through innovation system coordination, science-policy advice, fostering cross-sectoral collaboration, multiactor engagement, and learning and experimentation. Better considering policy contexts as the starting point for developing TIP could advance its implementation and contribute to a broader understanding of TIP dynamics.

This paper reviews the emerging literature on “transformative” innovation policy (TIP) in order to (1) identify unique TIP characteristics and the challenges they imply for policymakers throughout the policy cycle and (2) examine the literature's contribution to practical policymaking. We identify five main distinguishing TIP characteristics and analyse the literature's understanding of how they influence the policymaking process. The analysis shows that the literature discusses TIP-related challenges in all stages of the policy cycle but does not provide much guidance on how to address key cross-cutting policymaking challenges such as how to achieve broad stakeholder involvement, evaluate transformative outcomes, and build up dynamic policymaker capabilities. In order for TIP ideas to be implemented in real-life policymaking, TIP scholars, therefore, need to more explicitly consider the practitioners’ perspective and develop concrete models, tools and guidelines that help policymakers address the identified challenges.

Building a knowledge infrastructure for Transformative Innovation Policy (TIP). An analytical approach based on the experimental TIP conference 2022

In the context of governing innovation systems for low-carbon transitions, learning is paramount. In this article, we look specifically at the issue of learning through innovation policy review processes. We begin by reviewing the academic literature on innovation policy reviews as well as the emerging literature on transformative innovation policy (TIP) in the contexts of major challenges such as climate change. Drawing from this review, we argue that traditional policy review frameworks fail to provide the kind of learning required to assess challenge-oriented innovation policies and that new, more reflexive approaches are required. We then propose a novel evaluative framework, the Sustainability Transition and Innovation Review (STIR), which incorporates insights from the TIP literature in order to address this gap. The basis for the proposed STIR framework in the theoretical literature is reviewed, and we then describe the results of a test of the STIR framework to evaluate Canada’s policy mix for driving a socio-technical transition from fossil-powered to electric vehicles. Insights from the test application show that the STIR approach helped uncover key explanatory dynamics around incremental vs. transformative change in Canada’s innovation policy performance, and highlighted the interplay between governance and substantive weaknesses in the policy mix. We conclude by arguing that these findings demonstrate the importance of updating policy review frameworks with the insights of the recent TIP literature.