Innovation Policy Instruments Research Articles

Evaluating offsetting as a component of biodiversity governance

AbstractBiodiversity offsetting is considered to be an innovative policy instrument to balance land use changes with conservation priorities. Although advocates have pushed to establish biodiversity offset markets for over 20 years and critics have contested the social and ecological implications of such policy innovations, in practice, offsetting schemes have been difficult to set up, replicate, and sustain over time. Observing the underperformance of biodiversity offsetting, we argue that a critical analysis is urgently needed. We identify a need to analyze offsetting in relation to other features of biodiversity governance rather than focus on the merits and flaws of offsetting as a standalone policy instrument. Using a set‐theoretic model, we consider how different institutional arrangements determine if and when biodiversity offsetting produces positive environmental outcomes. We find that offsetting adds to biodiversity governance only when three thorny challenges are met—muscular enforcement of environmental regulations, rigorous impact management aligned with the mitigation hierarchy, and the existence of evidence‐based and cost‐effective platforms for offsetting. Short of these conditions, outcomes are either uncertain or outright harmful to biodiversity. Reflecting more broadly on the prospects of institutionalizing offsetting mechanisms for protecting biodiversity, we conclude a need to recenter attention toward the supportive role of the state in facilitating effective policy innovations.

The Influence of Demand-Based Policy Instruments on Urban Innovation Quality—Evidence from 269 Cities in China

Enhancing the quality of urban innovation is a powerful strategy for advancing urban sustainability. A strong public innovation policy is a crucial building block for advancing urban innovation quality. This study identifies innovative procurement instances from over 640,000 public procurement contract data through textual analysis to investigate how urban innovation quality could benefit from demand-based policy instruments. The study’s findings indicate the following: (1) It provides evidence that the adoption of public innovation procurement has a significant impact on urban innovation quality, suggesting an inverse U-shaped relationship between the two. (2) Heterogeneity analysis reveals public innovation procurement stimulates urban innovation quality more remarkably in cities with provincial status and provincial capitals, as well as in eastern cities. (3) We discovered that it is not possible to increase the quality of urban innovation in the city when human capital in the city is performing poorly and when there is also a lack of external technology and entrepreneurial activity. Finally, this paper argues that our findings also provide important insights for the development of proactive innovation policy instruments, the construction of innovative cities, and the realization of sustainable development in countries around the world, especially in developing countries.

Well-being Effects of a Subsidy Retention Fund for Renovation of Dwellings of Locked-in Owners in Ghent.

With its subsidy retention fund, the city of Ghent targets homeowners, who live in a dwelling of bad quality and do not have the resources to renovate or move out. Being in this no-choice situation, they are locked-in homeowners. Through this innovative policy instrument, Ghent aims to improve the quality of its housing stock targeting households who may not take up other renovation-encouraging instruments. To reach the households who would otherwise not be able to renovate, important efforts in outreaching and offering technical and social guidance accompany the renovation subsidy. Guidance activities substantially increase the cost of the instrument, but in reaching the households living in bad-quality houses, it has the potential to create major benefits not only technically but also socially as housing quality is related to well-being. Generally, the identification of a causal relationship is difficult as well-being and its mediators are complex matters. This case offered a unique opportunity to collect information from the beneficiaries on a range of well-being domains both before the renovation of their dwelling and after the renovation. Even though the research was restricted to short-term effects, the results suggest that improvements in different domains of well-being can be linked to the improvement of housing quality. These improvements in well-being in Ghent show that (local) government spending in housing renovation of locked-in homeowners can be an instrument to achieve social progress.

Meta-Regulation--An Innovative and Dynamic Policy Instrument for Platform Economy

The emergence of a variety of digital companies breaks up the competitive landscape of the market, which simultaneously changes peoples lifestyles as well. As the main tool to convenient peoples lives and to motivate the economic development of society, the progress made by digital technology proposed high requirements for authorities to update and adopt new regulatory approaches to retain the market order. Currently, the policy regulation for online agencies, known as platforms, causes intense academic discussion due to the inapplicability of the traditional regulatory model and the conflicting views of technical innovation or governmental restriction. This paper will focus on an innovative regulatory doctrine, namely Meta-regulation which enables the government to set up the rules for platforms from a unique perspective, and meanwhile, exploring two dimensions including an explanation of the standardized concept of Meta-regulation and giving an analysis of its generalization within the context of the digital economy. A conceptually accepted definition of Meta-Regulation and a series of reasons produced to demonstrate the applicability of Meta-Regulation for platform regulating will be figured out at the end of this paper.

Diffusion of electric vehicles in Beijing considering indirect network effects

Various policies on electric vehicles (EVs) have been implemented in Beijing to promote EV diffusion, but previous research has rarely considered the indirect network effects between EVs and EV charging infrastructures (EVCIs), and has not explored the impact of EVCI-related incentives on EV diffusion. This study aims to enrich the literature by incorporating EVCI development and indirect network effects in EV diffusion. A system dynamic model is proposed to systematically analyse the interactions among consumer, EV manufacturer and EVCI operator and simulate EV diffusion and ECVI investment in Beijing. Multiple scenarios are adopted to investigate the joint effects of the policy mix on EV diffusion. The results indicate that the oil-to-electricity subsidy promoted EVs and EVCIs to a greater extent than the license plate control policy. The EVCI maintenance policy outperformed EVCI construction and production subsidies on EV diffusion. Synergistic effects exist when the oil-to-electricity subsidy is mixed with EVCI-related incentives. This study provides implications for policymakers to promote EV diffusion with innovative and efficient policy instruments.

The EU's carbon border adjustment mechanism: Shaped and saved by shifting multi‐level reinforcement?

AbstractIn April 2023, the EU institutions finally adopted an innovative international climate policy instrument: the Carbon Border Adjustment Mechanism (CBAM). As the long and winding road to a CBAM has included significant EU‐internal and EU‐external opposition, a “shifting Multi‐Level Reinforcement” (MLR) perspective is helpful for understanding this development. When France assumed initial leadership from 2007, skepticism to the WTO, generous amounts of free allowances, combined with a low carbon price, provided a strong oppositional force. Then, influential elements in the European Parliament called for a carbon border tax, which was subsequently included as a central ingredient in the “Fit for 55” package launched by the Commission, In the decisionmaking process, leadership involving all the previous forces resulted in an institutional reinforcement dynamic strong enough to counter EU‐internal as well as EU‐external challenges and ‘turbulence’. This case shows the relevance of an updated MLR perspective for understanding also other EU processes, taking into account the growing role of both policy packages and trilogues as decisionmaking tools, indicating a possible strengthened role for the Commission also in the decisionmaking phase.

Theoretical principles of financial and economic stimulation of the development of smart industry

The article examines the research of scientists on the development of a new industrial policy and analyzes papers devoted to assessing financial and economic incentives for the development of new technologies, innovations, smart industry and Industry 4.0. The intervention of state industrial policy in cases where the market fails to allocate resources effectively is analyzed, and the relevance of industrial policy is substantiated by economists and political leaders of the leading countries of the world. The theoretical foundations of the state innovation policy are defined, which is the link between the policy of scientific and technological progress and industrial policy aimed at developing principles for supporting the bringing of ideas and innovations to the market. It has been established that the widely used traditional instruments of innovation policy are government support for research organizations, primarily state universities and scientific institutes. Other common tools for financial and economic stimulation of industry are competitive funding of research (both fundamental and applied), fiscal preferences (tax incentives and subsidies) for R&D by industrial enterprises, and government support for technology transfer. Foreign studies of the theoretical aspects of financial and economic stimulation of development are systematized and grouped into the following areas: justification of state support for research organizations and competitive financing of scientific projects, assessment of the effectiveness of the use of fiscal preferences for R&D, analysis of the impact of state support in the process of technology transfer for the development of smart industry and stimulating the development and commercialization of innovations (patent box mode). An example is given of one of the areas of modern research into financial support for stimulating a particular industry – fiscal preferences for the production and sales of electric vehicles and charging stations. It has been established that financial and economic incentives for the development of new technologies and their implementation in the smart industry have a positive impact on the development of start-ups, innovation activities, the development of new products, an increase in the number of patents, additional output volumes, growth in investment and employment. It would be advisable to focus further research on analyzing the experience of foreign countries in stimulating the development of smart industry with the help of financial instruments (including fiscal instruments).

Fostering in situ conservation of wild relatives of forage crops.

Most plant conservation strategies generally overlook the intra-specific genetic diversity of crop gene pools. Focusing on forage crops and their wild relatives, we present a novel approach to address the conservation of these species on meadows. Two-thirds of Swiss agricultural land is green land, mostly used for forage purposes, and their genetic diversity is being threatened. We focused here on eight plant associations gathering at least 18 taxa considered priority crop wild relatives of forage crops. Since 2020, about 1,217 high-quality surfaces (representing 1,566 hectares) nationwide have been integrated into an innovative auction-based policy instrument dedicated to conserving these populations. Here, we report the benefits and hurdles of implementing this bottom-up approach and try to estimate the quality of conservation of the forage plants' CWR gene pool. Although we focus on the Swiss case, our approach to in situ conservation offers opportunities to effectively guide conservation in other contexts. We also discuss possible ways to improve CWR conservation policy, particularly the need to better consider the populations and habitat levels.

Land consolidation as one of the innovation policy instrument for small LGs: The case of Estonian agricultural farms

Local governments (LGs) that are small and located in peripheral locations have several challenges to introduce policies for increasing local firms’ innovation activity compared to LGs located near agglomerations. This article reveals that one of the comparative advantages of small LGs is agricultural land. System failures are hindering the necessary innovativeness of farms and interventions at the local level. This article focuses on land consolidation as one possible intervention. Panel data consisting of 392 Estonian farms covering the years 2014 to 2019 were used to study the relationship between the farm structure measured by the area-weighted mean size of the parcels and the probability of implementing innovation activity. The result of the logit model with fixed effects shows that the structure of the farm and the probability to invest in buildings, machinery, equipment, and inventory are positively related. Small LGs can use this intervention for various aims and must consider environmental goals, country-specific planning systems, legislation, and farm owners’ willingness to participate in land consolidation.

Implementation of innovative EU approaches to regulatory policy for the development of agricultural production and rural areas

The study of the experience of the European Union in solving the problems of the weak development of agriculture as a sensitive sector and the polarization of the socio-economic living conditions of residents in rural areas has an applied value for the implementation of this experience in Ukraine, which determines the relevance and novelty of this research. The object of the research is the tools of the state innovation policy for the development of agricultural production and rural areas of the EU. The subject of this study is the experience of the European Union in supporting the development of agriculture, as a sensitive industry, and increased support for the development of certain depressed regions of the EU in order to reduce their socio-economic depolarization. The purpose of this work is to justify the need to strengthen state policy and its tools for the innovative development of agricultural production and rural areas on the example of the settlement of relevant issues in the European Union. The practical significance of the results lies in the possibility of practical application of the recommendations regarding the definition of instruments of the state innovation policy for the development of agricultural production and rural areas in Ukraine. To achieve the goal, the following were used: а systematic analysis of the evolution of solving the issue of the common agricultural policy of the European Union, which contributed to the formation of recommendations for the definition of innovative tools of state policy for the development of agricultural production and rural areas in Ukraine; management approach - to strengthen the control function of state management in the implementation of state programs related to the support of agriculture as a sensitive industry and the development of rural areas. Conclusions. The development of sensitive industries in each country has not only economic, but also social and political significance, since it is about preserving jobs, consumer opportunities of the population, generating GDP and deducting taxes to the local and state budget, reducing the depolarization of economic growth between individual regions and strata population, and, therefore, socio-political peace in the state. The multifacetedness of this issue affects the decisions of the governments of countries and international integration groups, in particular the EU, whose experience is very useful for research and further implementation in Ukraine. The starting point for the effectiveness of the Program for the Sustainable Development of the Agricultural Industry in Ukraine is a comprehensive approach to solving the problems of increasing the competitiveness of Ukrainian agricultural production and leveling significant disparities in the socio-economic development of rural areas. These tasks are two sides of the same problem, due to the neglect of which it is possible not only to lose a large number of small and medium-sized Ukrainian villages, but also to face the fact of food insecurity, which threatens the national security of Ukraine. Special attention in the process of implementation of the Program for the Sustainable Development of the Agricultural Industry in Ukraine is needed by the control function, which must be carried out permanently and qualitatively.

End-to-end digitalization factors: Challenges for Russian manufacturers

Despite clear progress in digitalization, Russia significantly lags behind global leaders in the use of digital technologies, including robots, artificial intelligence and 3D printing. In this study, we use the organizational characteristics of Russian industrial companies and the role of innovation diffusion channels to explain the digitalization factors of Russian industrial enterprises. The database is grounded on the results of a sample survey of 1.7 thousand companies; empirical estimates include the construction of logit regressions. The results of the study are mixed: digitized companies are focused on the domestic market, but are receptive to technology transfer from foreign investors, examples of other Russian and foreign companies in the industry, developments of research centers in the field of robotics and artificial intelligence. The study of the relationship between digitalization and firms’ use of innovation channels has shown the importance of market incentives and flexible public innovation policy instruments. Direct government involvement as an owner in stimulating digitalization affects innovative companies using robots and 3D printing, while indirect government support measures are significant for innovative companies using artificial intelligence. This suggests that Russian companies overcome the barriers of resource constraints and organizational rigidity in different ways, and are also selectively susceptible to external incentives, which should be taken into account by the government in its policies

Public support and returns from innovation: evidence from European countries

This paper aims at determining the role of public support in increasing outputs from product innovations. The effects of two different policy instruments, a supply-side, i.e. R&D grants, and a demand-side one, i.e. public procurement, are studied for 15 European countries. The analysis employed 2014 CIS micro-data in a logit model, which was verified using Bayesian Model Averaging. We confirmed that both, R&D grants and public procurement matter for returns to product innovation, and public procurement outperforms the other instrument, however, the impact of grants depends on the source of funding. In-house R&D expenditure was proved to have some impact on firms' product innovation, but it is relatively weak. Furthermore, some positive effects of cooperation on returns from product innovations were confirmed. The study indicates that there is a need to transform innovation policy instruments by integrating supply-side measures with demand-side ones. More emphasis should be put on problems to be solved or functions that are missing instead of being focused on supporting a specific type of innovation. Thus, this paper provides an evidence supporting a mission-oriented (challenge-oriented) approach to innovation policy.

Northern Sea Route development plan until 2035 as an instrument of state innovation policy

The Northern Sea Route is a promising transport project. Its effective development requires the use of various innovative technologies. The purpose of the study is to determine the role and significance of the Northern Sea Route development plan until 2035, adopted by the Government of the Russian Federation in August 2022, as an instrument of the state’s innovation policy. After analyzing the content of the activities presented in the plan, the author comes to the conclusion that, despite some shortcomings (the inclusion of activities already underway, measures to develop railway infrastructure that are not related to the Northern Sea Route, arithmetic errors that are usually not typical for documents of this level) the practical implementation of the proposals presented in the plan for the development of a nuclear icebreaker fleet, the creation of an Arctic satellite constellation, the formation of an environmental monitoring system is impossible without the active introduction of innovations, fundamental and applied research in the field of natural, technical, medical and social sciences. This allows us to consider the plan as an instrument of the innovation policy of the federal executive authorities for the development of the country’s national economy in the long term.

A taxonomy of competition-based approaches as innovation policy measures to foster external knowledge search

PurposeThis paper aims to provide a comprehensive view of the different competition-based approaches that policymakers can exploit to foster external knowledge search and their positioning among innovation policy measures. A growing number of companies have implemented initiatives to access external knowledge to increase their innovativeness, consistently with the open innovation paradigm. Competition-based approaches have received increasing attention by the private sector as a way to access external knowledge. However, despite their potential role as innovation policy measures, a limited attention has been devoted so far to investigate them from the policymakers’ perspective.Design/methodology/approachTo this aim, a two-stage empirical analysis has been carried out to develop a taxonomy of competition-based approaches. The first stage leveraged a multiple case study methodology including a sample of 20 competition-based approaches, while the second one leveraged interviews with Italian and European key informants.FindingsThis paper proposes a novel taxonomy including eight competition-based approaches, which differ among each other in terms of policy strategy, scope breadth and output required. Moreover, this paper enriches a well-established taxonomy of innovation policy instruments with the identified competition-based approaches.Originality/valueThis study contributes to the current debate on innovation policy by providing a taxonomy that includes eight competition-based approaches that can be exploited by policymakers to foster external knowledge search as well as their positioning among the innovation policy instruments. The taxonomy will hopefully support policymakers in identifying of the most suitable instruments in the light of their policy strategy and objectives.

Innovation policy in the Norwegian aquaculture industry: Reshaping aquaculture production innovation networks

While aquaculture production in a number of countries has been highly successful in terms of production growth, there is also a number of instances where the rapid growth has been curtailed due to sustainability challenges. In response, fostering sustainable aquaculture production has become a key policy and research agenda. The point of departure for this paper is the radical technological innovations based sustainable restructuring dynamics of the Norwegian salmon farming industry, which despite becoming one of the most profitable aquaculture industries in the world, has in recent years seen its growth curtailed due to sustainability challenges. To address these challenges and to enable the use of new areas currently inaccessible by the incumbent aquaculture technology, the Norwegian authorities launched in 2015 a new type of innovation policy instrument, known as development licences. Based on a mapping of the aquaculture production technology development projects as well as in-depth interviews, this paper elucidates how the targeted innovation policy instrument has instigated the sustainable restructuring process of the Norwegian aquaculture industry. Our findings indicate that in the short term, the innovation policy appears to have succeeded in the reconfiguration, and more precisely, the 'renewal' process of the aquaculture production technology innovation networks (ecosystems) thanks to the entry of the new capable actors into the segment. However, we emphasise that the overall success of the innovation policy instrument will ultimately hinge upon sufficiently addressing certain aspects of the institutional failures in the sector.

Financing renewable energy: policy insights from Brazil and Nigeria

BackgroundAchieving climate targets will require a rapid transition to clean energy. However, renewable energy (RE) firms face financial, policy, and economic barriers to mobilizing sufficient investment in low-carbon technologies, especially in low- and middle-income countries. Here, we analyze the challenges and successes of financing the energy transition in Nigeria and Brazil using three empirically grounded levers: financing environments, channels, and instruments.ResultsWhile Brazil has leveraged innovative policy instruments to mobilize large-scale investment in RE, policy uncertainty and weak financing mechanisms have hindered RE investments in Nigeria. Specifically, Brazil’s energy transition has been driven by catalytic finance from the Brazilian Development Bank (BNDES). In contrast, bilateral agencies and multilateral development banks (MDBs) have been the largest financiers of renewables in Nigeria. Policy instruments and public–private partnerships need to be redesigned to attract finance and scale market opportunities for RE project developers in Nigeria.ConclusionsWe conclude that robust policy frameworks, a dynamic public bank, strategic deployment of blended finance, and diversification of financing instruments would be essential to accelerate RE investment in Nigeria. Considering the crucial role of donors and MDBs in Nigeria, we propose a multi-stakeholder model to consolidate climate finance and facilitate the country’s energy transition.

Technology Readiness Levels for vaccine and drug development in animal health: From discovery to life cycle management.

Public research and innovation initiatives in animal health aim to deliver key knowledge, services and products that improve the control of animal infectious diseases and animal welfare to deliver on global challenges including public health threats, environmental concerns and food security. The Technology Readiness Level (TRL) is a popular innovation policy instrument to monitor the maturity of upcoming new technologies in publicly funded research projects. However, while general definition of the 9 levels on the TRL-scale enable uniform discussions of technical maturity across different types of technology, these definitions are very generic which hampers concrete interpretation and application. Here, we aligned innovation pipeline stages as used in the animal health industry for the development of new vaccines or drugs with the TRL scale, resulting in TRL for animal health (TRLAH). This more bespoke scale can help to rationally allocate funding for animal health research from basic to applied research, map innovation processes, monitor progress and develop realistic progress expectations across the time span of a research and innovation project. The TRLAH thus become an interesting instrument to enhance the translation of public research results into industrial and societal innovation and foster public-private partnerships in animal health.

The relation between innovative policy instruments and SMEs resilience: conceptual analysis

In recent years, we have been witnessing a succession of economic, financial and health crises on a global scale, the most recent being the 2020 COVID-19 health crisis. Monetary and macroprudential stability policies have been implemented in order to address the harmful effects of these crises on both capital markets and the real economy. In addition, central banks have innovated and mobilized the arsenal of instruments at their disposal for the implementation of new “so-called unconventional” monetary policies in order to influence the economic and financial behavior of private agents and strengthen resilience of SMEs. The aim of the paper is to study the efficiency of traditional monetary measures and emphasize the role of innovative tools in driving the economic growth. various “unconventional” monetary policy measures put in place by the monetary authorities to stimulate economic growth, absorb health and financial shocks and strengthen the resilience of SMEs are analyzed.

Innovation policy instruments for grand challenges: targeting constellations of diverse R&I actors?

ABSTRACT Many countries have created research and innovation (R&I) policy instruments with the mission of addressing grand challenges. The new policy rationale suggests that these instruments must target civil society actors in new and more diverse constellations, combining them with ‘traditional’ R&I actors (universities and firms). Investigating the extent to which policy instruments are designed according to this requirement, this paper analyses co-occurrences of targeted R&I actors in science, technology and innovation policy instruments and identifies five typical constellations of targeted R&I actors. We focus on two constellations that are likely to include civil society actors. Wide constellations (dominated by universities and firms) are positively associated with grand challenge policy instruments. Civil-society-led constellations are less heterogeneous and possibly associated with grand challenge instruments. This original contribution shows partial consistency between the grand challenge policy rationale and its instruments, and evidence of civil-society-led actor constellations not yet considered in the literature.

A Circular and Bio-based Renovation Strategy for Low-income Neighbourhoods

The impact of climate change is expected to increase in the following decade. Possible effects on the built environment are identified as urban heat stress, air pollution, extreme weather conditions, etc. As a result, there is an increase in disease and mortality specifically in the cities among the vulnerable citizens such as elderly people and children. Moreover, many cities worldwide are in the evolution of urbanization which leads to increased carbon emissions as well as a demand for more material production and waste. Consequently, the construction industry embodies great potential for reaching the energy and carbon mitigation goals. For regeneration of the built environment, the European directives requires for the renovation of existing building stock as quick as possible. In Flemish context, cities stimulate renovation projects on a systematic and planned basis, by defining ‘urban renovation districts’ which received special financial facilities and subsidizing. Consequently, there is a growing demand for affordable housing in combination with a shortage of qualitative and energy efficient housing opportunities. In the last decades, there has been an intensive effort to develop different retrofit strategies, but there is a lack of comprehensive approach that delivers innovative technical solutions such as circular and bio-based construction methods as a solution to the increased housing demand of vulnerable people. For this purpose, this study combines the efforts of two initiatives, (1) Interreg Circular Bio-Based Construction Industry (CBCI) and (2) the innovative financial policy instrument of subsidy retention for low-income groups (refers to citizens living in poor quality houses with insufficient economic means & social skills to renovate). The study has the ambition to explore the coherence between technical, economical, legal, social aspects for circular urban retrofit strategies. Circular building materials and methods were developed and tested in real-life setting with construction of a prototype living lab (LL) in Technology Campus, Ghent. Depending on the results from the LL, an urban renewal strategy for Flemish districts is proposed by using subsidy retention on macro-economic and social level. The scenario is envisaged as a collective approach with the local community in which the vulnerable users also benefit as direct participants to the research.