Mission-driven innovation policy: what, how, why?
There's a new term in the Dutch field of research and innovation: 'mission-driven innovation policy'. But what exactly is that? Is it a logical step in the history of innovation policy? (spoiler: yes) And why do science, politics, business and civil society organisations need to work together? An article for anyone who wants to know more about the new buzzword and why the Rathenau Instituut is researching it.
It's July 13, 2018. Minister Wiebes and State Secretary Keijzer, both from Economic Affairs and Climate, present their implementation of the innovation policy announced in the coalition agreement. From now on, according to the letter to parliament, innovation policy must focus on four major societal themes:
- energy transition and sustainability;
- agriculture, water and food;
- health and care;
- safety.
In order to tackle these challenges, innovation policy with clear missions is needed.
Different kind of missions
The government is clearly inspired by leading missions from the past. Think of the Delta Works that had to protect the Netherlands from the rising water and the American Apollo space programme that wanted to have a man on the moon within ten years. These missions from the past, however, were mainly technically complicated. The current themes are much more complex and therefore require different kind of missions.
More cooperation
On 26 April 2019, State Secretary Keijzer presented an explanation of the innovation policy. A large number of parties must work together on each theme. These will not only be the usual suspects such as knowledge institutions, companies, research funders, and ministries. No, the government also sees an important role for start-ups, regional authorities and citizens' organisations, for example.
The idea is that the usual way in which we organise research and innovation in the Netherlands will not suffice for the major social themes. Until now, researchers in the Netherlands have mostly worked in disciplinary or public-private projects and programmes. Although this approach has yielded scientifically impressive successes and creates economic opportunities, in order to contribute to transitions the knowledge ecosystem has to change direction. This includes collaboration between scientists, governments, and social parties.
The collaborating parties must lay down their plans in so-called Knowledge and Innovation Agendas (Kennis- en Innovatieagenda’s) or KIAs. Such agendas were also used in previous top sector policy. An example of a new KIA is the one about agriculture, water and food. One of the missions will be about the transition to a circular agrofood system.
Transition to a circular agrofood system
The Dutch agriculture and horticulture sector needs to change tack: the sector wants to switch to a circular agrofood system. In the KIA Agriculture, Water, Food of 15 October 2019 the authors write: 'In 2030 the use of raw materials and auxiliary materials in agriculture and horticulture will be substantially reduced and all end and residual products will be valorised as high as possible. Emissions of polluting and eutrophying substances to ground and surface water will be reduced to (virtually) zero. Ecological conditions and processes are the starting point for food production, restoring biodiversity and making agriculture more resilient'.
Achieving these ambitions will require a major social change in agriculture and horticulture. A transition. More is needed from farmers and horticulturists than only improving the current production processes.The entire system needs to be overhauled.
Other protein sources
Take, for example, the change in protein supply. In a circular agrofood system, farmers use less raw materials for protein from outside Europe. So soy from Brazil is out of the question. New sources of protein will have to be tapped, such as algae, seaweed and fungi.
New routines
This change requires new routines in protein production and processing. Entrepreneurs need to develop new earning models and value chains. In addition, the sector must also ensure that food is safe and that it is produced and processed in a sustainable way. And then, of course, there is also the question of how consumers will experience the taste of a product based on, for example, algae.
Research and innovation are crucial to make the transition possible. Think of biotechnological research into the growth of algae as an alternative source of protein, the resilience and sustainability of large-scale production systems and research into changing consumer preferences.
Mission-driven innovation policy to accelerate transitions
The government is therefore choosing a new strategy to speed up transitions. The associated term is mission-driven innovation policy. The term is new, but the strategy does not come out of the blue. The emergence of this approach fits in with a broader development in thinking about innovations.
If you think of innovation policy as a long drink glass, then that glass in the 1950s-1990s was mainly filled with policies to seduce companies. In the period 1990-2020 the policy became a mix of one part attracting companies and one part stimulating cooperation. From 2020 onwards, the cocktail consists of three parts: attract companies, stimulate cooperation, accelerate transitions. Incidentally, this comparison with the long drink glass is not about money. Over the years, the government has started to spend more on innovation.
1950-1990: attracting companies
Up to and including the 1980s, the government's innovation policy mainly tried to entice companies to invest more in research and development by means of subsidies, tax breaks and protection of intellectual property. The justification for this policy was the principle of market failure: companies will invest less in R&D for their own sake than is socially desirable, because others will benefit from the results.
1990-2020: connecting stakeholders
From the 1990s onwards, thinking in terms of (national) innovation systems became dominant. In that context, the government's role is primarily to repair system failures. Innovation policy focused more on connecting parties in the innovation system, particularly by stimulating public-private partnerships between knowledge institutions and companies.
2020 - .. Accelerating social transitions
Over the past few years, we have seen the emergence of a third generation of transformative innovation policies. The aim of this policy is to stimulate targeted and selective innovations that help accelerate societal transitions. In this new approach, the government has a more substantive and guiding role in helping to find innovative solutions and transition paths for pressing societal challenges, such as the transition to a low-carbon economy or a circular economy (Schot & Steinmueller, 2018).
Broader understanding of innovation process
In addition to market and system failure, transition failure is now also a legitimation for innovation policy. (Frenken & Hekkert, 2017). Characteristic of this new approach is that the policy agenda is broader than economic growth and increased productivity and is more focused on making society more sustainable. Part of this broadening is also a broader view of the innovation process. The focus is less exclusive on technological R&D. A broader range of knowledge and expertise is needed to realise the formulated missions. (Diercks et al., 2019).
The Netherlands and Europe
The new mission-driven innovation strategy of the Netherlands is similar to that of the European Union. An important part of European research only receives funding to contribute to societal transformations. Horizon Europe, for example, the forthcoming European framework programme for research and innovation, includes a special section for societal missions. While the Netherlands is deploying 24 missions within four social themes, the European Union is deploying six clusters. The European clusters and the Dutch themes overlap. One of the European clusters, for example, is 'soil health and food'. This can be compared to the Dutch theme 'agriculture, water and food'.
Incidentally, there is sometimes confusion about the term mission. For example, a distinction is made between transformer missions and accelerator missions. Transformer missions, then, focus on transitions. Accelerator missions are intended for technological developments. For simplicity, this article uses the umbrella term 'mission'.
Transformer missions
In the context of transformative innovation policy, the type of mission that focuses on accelerating a transition is particularly relevant. These types of 'transformer missions’ (Goetheer et al., 2018) aim for a broad and far-reaching change process of which the solutions are only partly known. In order to accelerate the transition to a circular agriculture, for example, major changes are needed in existing systems of food production and food distribution. Technological innovation is only one dimension of this transformation process. Innovations in production chains and earning models, changes in legislation and regulations, and changes in the views and routines of farmers, supermarkets and consumers, for example, are at least as important.
Accelerator missions
There are also 'accelerator missions'. These are not explicitly aimed at transformative change, but at 'accelerating technological development and groundbreaking application'. Examples include the legendary Apollo project, the EU programme to develop a vaccine for Ebola, and the US SunShot Initiative that uses solar energy for all. All these initiatives aim to achieve an ambitious, radical, groundbreaking technology or innovation goal. The underlying idea is that this can achieve both social and economic impact.
How do you bring groups together?
A major challenge for the government is how to organise governance and the execution of the missions. Recycling agriculture, for example, is a fine ideal on which many parties want to work, but how do you bring researchers from different disciplines and knowledge institutes into contact with farmers, supermarkets and consumers to jointly develop the necessary knowledge and innovations? And what roles should each of them play?
Co-creation
One way of integrating the social embedding of innovation into the research and innovation process is cocreation. Cocreation is actually a nice word for collaboration. It means that in addition to researchers and technology developers, end users, professionals, companies, governments, regulators, citizens and/or social parties are given an active role in putting innovative solutions on the agenda and co-developing them that are practically applicable and contribute to the mission.
The Netherlands has experience
In the Netherlands, some experience has already been gained in involving a wide range of groups in putting research and innovation on the agenda for societal goals and missions. All kinds of groups, for example, have participated in drawing up the Knowledge and Innovation Agendas (KIAs) of the top sector policy and in the National Science Agenda. The challenge now is to get a good mix of parties from science and practice to work together in the programming of this agenda, in the implementation of the projects, and in the management of the programme and the projects.
Cocreation with parties from all corners and gaps of society is important if innovations are to contribute to societal transitions. Knowledge of professionals and experts about, for example, earning models, marketing, legislation and regulations or about the views, preferences and routines of users is often just as important as scientific or technological knowledge.
If the government wants to mobilise scientists and engineers for missions, it can stimulate this by making co-creation a precondition for the distribution of funding for research and innovation, or by stimulating networking between scientists, engineers and professionals and other parties with relevant (embedding) knowledge. They can also actively participate as cocreators themselves, on the basis of their knowledge and expertise on, for example, legislation, regulations and policy processes.
Cocreation doesn't happen by itself. The Rathenau Instituut already showed in 2013 that this method of knowledge production is at odds with prevailing practices and routines in science. Ecologists work more often with other ecologists than with scientists from other disciplines, let alone supermarkets or the Consumers' Association. In addition, cocreation requires new competencies from all parties involved. They need to immerse themselves in each other's language and reserve more time for consultation and contact than they were used to.
Encouraging collaboration
Back to the question: how do you bring groups together? The government tries to encourage that cooperation. It does so, for example, by imposing conditions on the content of the innovation agendas, on the partners and on the form of collaboration. We will explain briefly below:
- Content of research and innovation agendas
A broad focus on innovation in which the social embedding is co-developed in the research and innovation process. - Partners in consortia
Not only scientists, but also non-scientists with knowledge and experience relevant to the societal embedding of innovation. - Cooperation methods
Special attention for transdisciplinary or cross-sector collaboration in research and innovation.
Social embedding
One point related to cooperation is the embedding of the innovations. An innovation can only successfully contribute to a transition if it becomes socially embedded. This means that innovation with a view to transitions requires much more than the development and application of a new technology. In the Rathenau report Voorbij lokaal enthousiasme: lessen voor de opschaling van living labs (Van den Broek et al, 2020) We distinguish four important dimensions for the social embedding of innovations. Namely, the technological dimension, the economic dimension, the legal dimension and the socio-cultural dimension.
The government can regulate any of these dimensions. If we take the circular agrofood system, for example, a technological dimension could be a competition for innovative solutions. An economic dimension is a lower VAT rate for vegetable food. The legal dimension then includes, for example, laws and regulations that impede the import of foreign proteins. And an intervention around the socio-cultural dimension (and also around the economic dimension) would be if the government only offered vegetarian products in company restaurants and at social gatherings.
Dimension 1: technology
The first dimension is technology. An application can only function if existing technical systems and infrastructures are adapted. For example, digital tools for farmers can only function if the farmer has good digital networks on his farm. And innovations with sustainable packaging materials can only succeed if packaging and logistics systems are adapted accordingly.
Dimension 2: economy
The second dimension is economics. New applications need to be embedded in markets and chains for production and distribution. Farmers who want to use an innovative application must therefore develop a suitable earning model and convince their suppliers and customers to join.
Dimension 3: regulation
The third dimension is regulation. Innovations can only survive if they comply with laws and regulations, such as safety standards. Existing rules often have to be adapted to enable or enforce innovation.
Dimension 4: social-cultural
The fourth dimension is socio-cultural. Innovations can only lead to sustainable innovation if they fit in with the values, views, expectations and routines of consumers, citizens and other stakeholders in society.
An innovation can only successfully contribute to a transition if it becomes socially embedded.
Rathenau Instituut investigates three points of interest
Well, the above is a long introduction to the government's new mission-driven innovation policy. But what does that have to do with the Rathenau Instituut? It's quite simple. The Rathenau Instituut stimulates public and political opinion formation about the social aspects of science and technology. We conduct research and organise the debate on science, innovation and new technologies. And since mission-driven innovation policy is a new fate for the tribe of science and technology, it forms a research field for the Rathenau Instituut.
In a new project, the Rathenau Instituut is investigating three main points of focus of the mission-driven innovation policy:
- the level of democracy;
- the effectiveness;
- the regulation.
1: Democracy
The Rathenau Instituut's first point of attention concerning mission-driven innovation policy concerns the level of democracy. Transformative missions focus on social issues and are partly financed from public funds. The organisation, governance and execution of the missions therefore also require accountability according to democratic principles. This applies to the formulation and selection of missions, the programming of projects and initiatives, the distribution of money, the implementation of projects and evaluation. Precisely because of the innovative approach, which crosses boundaries between organisations (both within the government and between public and private parties), this accountability is not self-evident. However, interest groups, such as LTO and nature and environmental organisations, can help to generate support for a programme by helping to decide on the course of action on behalf of the business community or organised citizens. But they are not accountable to society outside their own constituencies, so their efforts do not guarantee democratic legitimacy.
2: Effectiveness
The effectiveness of mission-driven research and innovation programmes is our second focus area. How do you design embedding programmes that actually contribute to accelerating a transition? A new meat substitute only really contributes to circular agriculture if it can be produced on a large scale, if there is a good earning model for a producer, if the product complies with food safety rules and if the meat substitute is appreciated by the consumer. The way in which the social embedding of an innovation can be achieved cannot be clearly defined in advance in terms of objectives - let alone how the innovation and embedding process contributes to accelerating a transition. The dynamic nature of transitions calls for an adaptive approach in which the goals and activities are regularly adjusted, depending on social or technological developments. Flexibility, however, is often at odds with effectiveness. Principles of transdisciplinary research can provide direction in this regard. (Lang et al., 2012, Hoffmann et al., 2019).
A possible pitfall is that the government tackles a transformer mission as an accelerator mission. This underestimates the far-reaching changes in policy and governance associated with a transformer mission. Accelerator missions try to accelerate technological development, while transformer missions try to use research and technology as part of a broader approach to guide and accelerate a process of societal change.
3: Regulation
Finally, the management of missions requires attention. Who monitors the coherence and progress of a transformer mission? Because of the public nature of the mission, it is obvious that a government organisation will take this responsibility. But the question is whether a ministry is equipped for this. After decades of new public management, the ministries have put a great deal of professional knowledge at a distance and have become more dependent on external advisors and knowledge organisations to implement their policies. In addition, a lot of policy implementation is accommodated by implementing organisations and there are many generalists working in ministries who, moreover, regularly change functions, which limits knowledge accumulation. Transformative innovation policy requires different ways of operating on the part of the government (Kattel en Mazzucato, 2018). This requires new knowledge, skills, working methods and routines. It requires different competencies and capacities in government. It will have to operate itself more as a dynamic, responsive and learning organisation. It must not shy away from uncertainty, but embrace exploration and experimentation in order to deal with it properly.
To combine existing practices and policy instruments with new experimental approaches in innovation policy, public authorities need dynamic capacities to respond to changes in the environment. This concept comes from the business world and refers to the ability to perform within the current business model (to maintain turnover and profit) while innovating (to remain competitive in the future). It is the ability to continue to exploit existing strengths and explore and try out new opportunities at the same time. In management literature one speaks of ambidextrousness (literally: two-handedness). A government that wants to use transformative innovation policy to accelerate sustainability transitions must invest in dynamic capacities.
All in all, mission-driven innovation policy is a logical step in the history of innovation policy. Especially in view of the societal challenges that the government wants to tackle. In the coming period, the Rathenau Instituut will provide knowledge on how this new mission-driven innovation policy can be implemented.