A Complexity-Theoretic Perspective on Innovation Policy

Koen Frenken

No 1619, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: It is argued that innovation policy based on notions of market failure or system failure is too limited in the context of current societal challenges. I propose a third, complexity-theoretic approach. This approach starts from the observation that most innovations are related to existing activities, and that policy’s additionality is highest for unrelated diversification. To trigger unrelated diversification into activities that contribute to solving societal challenges, government’s main task is to organize the process of demand articulation. This process leads to clear and manageable societal objectives that effectively guide a temporary collation of actors to develop solutions bottom-up. The combination of a broad coalition, a clear objective and tentative governance are the means to cope with the inherent complexity of modern-day innovation.

Date: 2016-08, Revised 2016-08
New Economics Papers: this item is included in nep-cse, nep-edu and nep-ino
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