Directionality challenges for transformative innovation policy: lessons from implementing climate goals in the process industry

In the new paradigm of ‘transformative’ or ‘mission-oriented’ innovation policy, which addresses broad societal challenges, policy makers are given a large responsibility for setting or shaping the direction of socio-technical transitions. However, the literature has so far not provided much concrete advice on how to achieve directionality in practice. The main argument of this conceptual article is that a more detailed approach is needed to better understand the challenges policy makers might face when they attempt to translate societal goals into more concrete and actionable policy agendas. It identifies and discusses eight analytically derived directionality challenges: handling goal conflicts, defining system boundaries, identifying realistic pathways, formulating strategies, realising destabilisation, mobilising relevant policy domains, identifying target groups, and accessing intervention points. To illustrate these challenges, the article uses examples from the implementation of the Swedish climate goal in the process industry

Policy mixes and policy feedback: Implications for green industrial growth in the Swedish biofuels industry

Policymakers have increasingly voiced an ambition to combine the transition to a climate-neutral society with a “green” domestic industrial agenda. In recent years, innovation systems scholars have advanced the understanding of the evolution of industries around renewable energy technologies as well as the role of policy feedback (and indeed politics) surrounding the development of domestic green industrial development policies. To take a step towards combining these literature streams, the purpose of this paper is to investigate the role of policy mixes and policy feedback in the emergence of domestic green industries. This is achieved in the empirical case of biofuels in Sweden, and the findings show that policy feedback dynamics created difficulties in aligning the national policy mix with the technology and industrial developments in the country. The resulting political uncertainty predominantly hampered the scaling up of domestic production capacity, while R&D and import of biofuels instead could grow strong. Based on this empirical case, a process model is developed to explain the role of policy feedback in the development of domestic industries, thus demonstrating how the growth of domestic industries is driven by the interplay of policy effects and various feedback processes. The findings suggest that future research into the role of policies in “green” domestic industry growth should devote more attention to the dynamics driving the co-evolution of policy, technology and industry structures

The outcomes of directionality: Towards a morphology of sociotechnical systems

The sustainability transitions literature departs from the idea that grand challenges such as climate change and rising inequality call for far-reaching changes in sociotechnical systems of production and consumption. This implies a dual interest in the directionality of innovation; some directions of change can be perceived as more desirable, while others may be more plausible due to the path dependent nature of sociotechnical change. The specific characteristics of the potential outcomes of directionality have, however, received little attention. Our aim is therefore to unpack and conceptualize the multidimensional space in which sociotechnical systems may adopt different shapes and configurations. We also provide three illustrative empirical examples where directionality has resulted in systems with different technical, social and spatial characteristics. The ideas put forward in this paper can be seen as a contribution to a morphology of sociotechnical systems and thereby support efforts to investigate or promote specific directions of change

How can pilot and demonstration plants drive market formation? Lessons from advanced biofuel development in Europe

This paper analyzes through what enabling mechanisms pilot and demonstration plants (PDPs) reduce supply and demand uncertainties, and thereby contributing to the market formation for novel sustainable technologies. The analysis builds on three case studies within the advanced biofuel development in Europe. For each case, we construct a narrative of the technology development and derive detailed insights into how technology actors use PDPs to drive market formation. We develop a comprehensive analytical framework, which highlights how PDPs contribute to supply uncertainty reduction through three main enabling mechanisms: building credibility for the technology, business ecosystem orchestration, and technology learning. The corresponding enabling mechanisms behind demand uncertainty reduction include technology standardization, constructing the narrative, and the creation of legitimacy for the technology. The paper also unfolds the composite activities of each mechanism, and outlines implications for technology developers, policymakers, as well as for the research community

Managerial and organizational challenges encountered in the development of sustainable technology: Analysis of Swedish biorefinery pilot and demonstration plants

Pilot and demonstration plants (PDPs) perform critical tasks in the development of new sustainable technology by bridging basic knowledge generation and large-scale commercialization. Significant private and public funding has therefore been allocated to PDPs addressing climate change, pollution abatement technology and/or increased resource efficiency. After technology verification, PDPs typically struggle with evolving objectives, and reports of stalled or delayed development are common. Key problems may center on technical difficulties, but challenges of a non-technical nature are equally important, not least for the development of clean technology. This paper draws on a longitudinal case study of four PDPs used for advanced biorefinery technology development in Sweden and delineates the key managerial and organizational challenges that arise in and around such plants. By taking the actor networks around PDPs as the main unit of analysis, this paper gives a detailed description of various challenges, such as the division of responsibility for the operation and ownership of the PDPs, unclear roles and objectives, and the lack of specific competences and resources in the actor networks. One important conclusion is that improved knowledge about such challenges should increase the resilience of actor networks in and around PDPs, and also help shorten the formative phase of developing sustainable technology

Photovoltaics in Sweden – Success or failure?

Promoting global energy transitions while stimulating domestic industrialization requires national policymaking that shapes technological innovation towards specific outcomes. Although this is inherently difficult, historical case studies may bring a better understanding of innovation dynamics and thereby guide the design of future policy interventions. The purpose of this paper is to review and analyze the emergence of Swedish photovoltaics technology from a policy perspective. Our main aim is to provide a retrospective account of historical developments, but we also derive more general insights about technological innovation and related policy challenges. The paper departs from an adapted analytical framework based on the technological innovation systems approach. Our review identifies four decades of Swedish research that has largely failed to drive domestic commercialization, the rise and fall of an industry that mainly served international markets, and a rapidly growing domestic market based on imported products. This situation is the result of mismatches and fragmentation among key innovation processes, which have not been addressed by strategic policy interventions. We suggest that policymakers should promote a full range of innovation processes and consider making innovation support subject to a payback mechanism that delivers a return on public investments even if industries and markets emerge abroad. Our study also demonstrates how the technological innovation systems approach can be extended to include the function commercialization and emphasizes the importance of paying attention to the directionality of technological innovation processes

Transformative innovation policy: A systematic review

This paper reviews the emerging literature on “transformative” innovation policy (TIP) in order to (1) identify unique TIP characteristics and the challenges they imply for policymakers throughout the policy cycle and (2) examine the literature\u27s contribution to practical policymaking. We identify five main distinguishing TIP characteristics and analyse the literature\u27s understanding of how they influence the policymaking process. The analysis shows that the literature discusses TIP-related challenges in all stages of the policy cycle but does not provide much guidance on how to address key cross-cutting policymaking challenges such as how to achieve broad stakeholder involvement, evaluate transformative outcomes, and build up dynamic policymaker capabilities. In order for TIP ideas to be implemented in real-life policymaking, TIP scholars, therefore, need to more explicitly consider the practitioners’ perspective and develop concrete models, tools and guidelines that help policymakers address the identified challenges

Shaping factors in the emergence of technological innovations: The case of tidal kite technology

The technological innovation systems (TIS) literature offers a detailed and dynamic understanding of factors that enable successful innovation. However, few studies analyze what determines where in space value chain elements are developed as a new technology is diffused on a large scale. The purpose of this paper is to show how the TIS approach can be used to identify and analyze factors that shape spatial trajectories of emerging technologies. It proposes an adapted analytical framework that expands the conventional focus on one-dimensional supporting and blocking factors, to shaping factors that incorporate the spatiality of innovation. The approach is illustrated by examining innovation in tidal kite technology. The analysis finds that a supportive local context in western Sweden during the infancy of tidal kite technology, together with the availability of competent engineers and business development professionals, promoted the formation of locally embedded knowledge and competence. This in turn created a spatial path dependency that made developments gravitate towards Sweden, although the lack of domestic markets has also increasingly driven an expansion of activity to other regions, in particular the UK. Moreover, the analysis shows that shaping, and not only stimulating, the growth of emerging TIS is an important challenge for regional policymakers, and highlights the need for international policy coordination. The paper concludes that analyzing shaping factors in the emergence of new TISs can yield important insights, some of which may be overlooked with a narrow analytical focus on supporting and blocking factors

The policymaking process of transformative innovation policy: a systematic review

There is an emerging literature discussing the limits and boundaries to governing socio-technical change for addressing grand challenges through innovation policy.\ua0While there are differences within this literature with regard to the researchers\u27 points of departure, there seems to be an agreement on two points: that there is a need for knowledge on how innovation policy can be used to address grand challenges and that practices and associated changes in administrative and organizational capacities of public organizations will be key for delivering such transformative policies.\ua0In the literature, important steps have also been made towards formulating a new transformative innovation policy agenda and supporting the re-organization of the innovation policy process.\ua0In this paper, we address the fact that the current understanding of what characterizes the transformative innovation policy paradigm, its roots and branches, and the actual contributions of the proposed frameworks on practical aspects of the policymaking process is rather unclear. One of many remaining questions is to which extent current writings contribute to our basic understanding of the policymaking process in terms of agenda setting, policy design, legitimation, implementation, evaluation and policy learning.\ua0The purpose of this paper is therefore to take stock of the current understanding of the specificities and challenges of transformative innovation policy throughout the policymaking process and examine the actual contributions for practical policymaking. This is achieved through a systematic review of the received literature on transformative innovation policy (and related concepts). We\ua0synthesize the contributions of the current literature to our understanding of how policymakers – in the context of transformative innovation policy – should set agendas; design, legitimate, implement, monitor and evaluate policies; and learn from their experiences.\ua0This allows for identifying important aspects and challenges related to different stylized stages of the process, as described by the transformative innovation literature, as well as avenues for further research