From technological to transformative missions: institutional capacities and capabilities for contemporary mission-oriented policies

Caetano C.R. Penna, Diana Velasco, Johan Schot and Jordi Molas-Gallart

Chapter 8 in The New Role of the State for Transformative Innovation, 2026, pp 129-146 from Edward Elgar Publishing

Abstract: This chapter examines the increasingly transformative role of the state in modern economies. The core argument is that the state's transformative function can be best understood in terms of distinct sets of capacities and capabilities. As the state moves away from a passive and facilitating role towards a proactive role to drive innovation addressing societal challenges such as climate change, its involvement manifests in the form of transformative missions. These missions, influenced by technological feats of the past, now focus more on the transformation of socio-technical systems, which factor in societal acceptance and economic viability, on top of technical feasibility. The chapter offers a comprehensive framework to conceptualise this transformative role, unifying the perspective from multiple fields (public administration, business management, evolutionary economics, innovation studies) on different types of institutional capacities and capabilities. Unsuch as existing models that emphasise mission motivations or objectives, this framework concentrates on the practical aspects of mission design and implementation. By distinguishing between capacities and capabilities and their sub-dimensions, the authors argue that successful transformation of socio-technical systems necessitates a balance of institutional mechanisms and dynamic transformative strategies. The chapter concludes with implications for policymakers and outlines potential avenues for further research.

Keywords: State; Transformative Role; Mission-oriented Policies; Transformative Innovation Policies; State Capacity; Capabilities (search for similar items in EconPapers)
Date: 2026
ISBN: 9781839100253
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