Back in grace of mission-oriented innovation?

Not a day goes by without a newspaper announcing a new sustainable technology somewhere in the world or a government initiative to address a global challenge. This is certainly due to an awareness of our enormous challenges, but also to a new understanding of the role of governments in research and innovation (R&D). Indeed, governments seem to have rediscovered the virtues of mission-oriented R&D programs like Apollo (moon landing) or Manhattan (atomic bomb) missions carried out by direct interventions in R&D activities.

Major challenges of our societies and inadequacy of traditional R&D policy

If more and more governments are turning to more R&D interventions, it is because they see it as a solution to our major challenges[1] such as climate change, continued urbanization, income inequality, and an aging population.

Most of all, they find that traditional[2] R&D policy is inadequate to meet these challenges, essentially for two reasons:

• This traditional policy is based on the idea that all innovation is good for the economy and social welfare and that the free market leads to an optimal choice of technology and distribution of the gains from innovation. Therefore, it would be unnecessary and inefficient to favor one technology over another or to intervene in the distribution of market revenues. However, we now know that not all of our technological innovations have been climate and environmentally neutral and those inequalities are not always the result of a perfect market. This policy has not prevented the deterioration of environmental conditions and natural resources or growing income inequality. It is difficult to know at this point whether we have reached a critical point or not, but it seems clear that we need to change our production and consumption patterns through a proactive act.
• It does not take into consideration the consequences of innovations on different sectors and areas (social, environmental, etc.) because it is focused on optimizing an innovation in the sector where it was born. However, our challenges are interrelated and require coordination of the policies of the different sectors involved. For example, the climate challenge requires us to take into consideration the impacts that new technologies have on areas such as agrifood, energy and transportation and, above all, consumer behavior.

New mission-oriented R&D policy

This „problem-solving“ capacity of innovation is at the root of the UN’s development goals; just as it has inspired the „green deal“ of the European Union or new national policies[3]. All these policy initiatives are based on the conviction that an innovation policy should:

• Stop trying to be technologically neutral and give a direction to R&D; it is not a question of supporting a particular industry or company, but of directing R&D towards greater sustainability.
• Adopt a mission or challenge oriented approach. The challenge is no longer just technological, as in the case of the Apollo or Manhattan projects, but environmental, economic and social, and therefore much more complex. Therefore, it is very important to have a broad conception that allows for a coordinated approach to sectoral policies.
• It is not a question of abandoning the bottom-up approach to research and innovation activities but of combining it with a top-down approach.
• State intervention must help develop private investment in the desired direction and not substitute for it.
• Find solutions to involve society more in technological choices. Without an appropriation of innovation by society, the new choices cannot be fully implemented.

The hope of the advocates of the innovation policy is not only to bring about a transformation of our economy towards a sustainable economy but also to encourage the emergence of disruptive innovations. The latter will be able to emerge when new technologies break with old ones.

With such an approach to innovation, a very active role awaits public authorities in:

• The choice of the direction to give to R&D and to the various missions that result from it. This movement is already underway in many countries. It is not a revolution but a recognition of the role of innovation policy already implemented in these countries[4].
• The organization of the process leading to these choices as well as the right combination to be found between a bottom-up approach (free of direction) and a top-down approach that indicates a given direction.
• Monitoring the process and, if necessary, adapting the initial choices if they prove to be inappropriate.

To implement such a policy, it is essential to have a

• new set of policy instruments. Currently, generic R&D subsidies are the central element of innovation policy. They should remain so. However, it will also be important to combine them with other specific subsidies and taxes in favor of innovative solutions and encouragement through public procurement and regulation. This combination can only be the result of a careful examination of barriers to the diffusion of innovation, capacity shortages and uncertainty about future demand.
• political will to make the organizational and institutional changes necessary to implement a global innovation policy. A multisectoral approach to innovation means that responsibility for innovation need not necessarily lie with one department or agency, but shared by several ministerial bodies.
• learning-by-doing process consisting of developing the current system at the same time as creating the new innovation mechanisms needed to implement such a policy. This implies a reflection on the spaces needed to support public sector innovations and the mechanisms for political decision-making.

Conclusions

The European Commission, like many other government bodies, has already taken the turning point in the transition towards greater sustainability. Even if the announcements of green initiatives are less spectacular than elsewhere, this is no less real in Switzerland despite a certain amount of caution. There are two possible reasons for our reluctance. Firstly, because of a domestic market that is too small, our economy is very dependent on foreign countries, and this applies to new sustainable economic activities. Second, because many innovation rankings hammer us all year round that we are champions of innovation, we may have lost the habit of questioning our innovation policy. However, for many countries as innovative as Switzerland, the next decade will be the time to question and possibly reformulate their innovation policy.

Switzerland will not escape it.

The comments expressed here are the sole responsibility of the author.

Bibliography

European Commission. (2020), Science, research and innovation performance report. Brussels.

Foray, D., Mowery, D.C. and Nelson, R.R. (2012). Public R&D and social challenges: What lessons from mission R&D programs ? Research Policy, 41, 1697-1702.

Mazzucato, M. and Semieniuk, G., (2017). Public financing of innovation: new questions. Oxford Review of Economic Policy, 33(1), 24-48.

Schot, J., Steinmüller W.E. (2018, 01), Three frames for innovation policy: R&D, systems of innovation and transformative change. Research Policy, pp. 1554-1567.

Veya, P. (2020, June 21), Quelle stratégie de croissance ? Le Matin Dimanche, 12.

[1] Megatrends HUB https://ec.europa.eu/knowledge4policy/foresight/tool/megatrends-hub_en.

[2] The traditional policy consists to repair market failures and thus (a) finance R&D, (b) create favorable framework conditions for innovation and support networks for information exchange and collaboration, and (c) promote entrepreneurship.

[3] See the publication Science, Research and Innovation Performance (SRIP) report 2020 of the European Commission (DG R&I). This publication has the great merit to thematize a new direction in research and innovation (R&I) policy and to propose a new concept, that of transformative innovation. It thus joins the initiatives of institutions such as the OECD (2015, System Innovation) or the WEF (the great reset: https://www.weforum.org/great-reset/) or that of certain governments such as Sweden or Great Britain.

[4] See in this respect one of the latest examples, the very new Hydrogen initiative from Germany. Other classical examples are public financing of Apple products by different public institutions (Mazzucato and Semieniuk, Public financing of innovation, 2017) or mission-oriented R&D in US in health, agriculture, energy and defense (Foray et al, Public R&D and social challenges: what lessons from mission R&D programs 2012).