Governance and learning in innovation policy - lessons

from MONITSvend Otto Remøe

Prokontra AS

OECD

Contents

• MONIT: Background and issues

• Governance and policy learning

• Obstacles and challenges in policy learning

Background

• The innovation driven economy and NIS• The OECD growth study illustrated the

importance of innovation for growth• Is there a new role of government?• From general NIS systems perspectives to

sectoral case studies and integration of policy as endogenous in NIS

• A greater need to develop a 3rd generation innovation policy

Objectives of MONIT

• How national traditions and contexts generate and sustain policy orientations and mixes.

• How different policies interact to create a basis for developing horizontal policy.

• How to co-ordinate policies across institutional boundaries through inter-ministerial. collaboration and institutional mechanisms for policy learning within and between agencies and ministries.

• The key national capabilities for effective processes of policy formulation, co-ordination and implementation

• Exploratory study, ready-made generic solutions not to be expected

Key concepts

• From government to governance: A need to learn more about policy processes and institutions

• Co-ordination and coherence• The policy cycle: Agenda setting and

formulation, implementation and learning• Horizontalization: Spanning ministerial

boundaries• Policy learning: managing the production,

diffusion and use of policy relevant knowledge

Two views on policy making

• The exchange perspective: Actors with interests and preferences ”negotiate” and outcomes are easily achieved without frictions (a perfect market view)

• The evolutionary perspective: Policy making take place within institutional arrangements, and cannot be understood without reference to historical, cultural and other factors (path dependency)

The policy cycle

Policy makers

PoliticiansMinistry

staff

Agencies, etc

Operational level

Constituency

Industry,institutes,

research groups etc.

Policy analysts

Policy research,consultants,

OECDetc.

Proposals

Funding

Proposals Funding

Promises

Lobbying

The real thing

Lennart Elg, VINNOVA

The policy co-ordination scale

9. Government strategy8. Establishing central priorities

7. Setting limits on ministerial action6. Arbitration of policy differences

5. Search for agreement among ministries4. Avoiding divergences among ministries

3. Consultation with other ministries (feedback)2. Communication to other ministries

1. Independent decision-making by ministries

Integration

• Sectorial policy integration” implies:

– the incorporation of environmental concerns – the protection and long-term sustainability of natural life-support systems – into all stages of policymaking in non-environmental policy sectors, with a specific recognition of this goal as a guiding principle for the planning and execution of sectorial policy

• this should be accompanied by:

– an attempt to aggregate presumed environmental consequences into an overall evaluation of governmental policy, and a commitment to minimize contradictions between environmental concerns and sectorial policies by assigning principled priority to the former over the latter.

A taxonomy of innovation policy (Den Hertog, Dialogic)

DOMAINS / GOALS Sectoral innovation policy

Multi-sectoral innovation policy

Core innovation policy i.e. aimed primarily at innovating (ultimately) industry and economic growth

Innovation policy in a limited sense (basically technology and industrial policies)

Integrated STI policies

Broad innovation policy i.e. aimed at (ultimately) economic growth and Quality of life

Innovation policies in other sectoral domains e.g. innovation policies in health, innovation policies in the environment

Horizontal / comprehensive / integrated or coherent / systemic innovation policies

Barriers to horizontal policy integration

• Lack of understanding of IP in other domains• Strong, segmented belief systems• Schools of thought being reproduced through

recruitment and socializing• Lack of capability to exploit windows of opportunity to

recouple problems, proposals and politics• Definition/understanding of other policy areas as rivals• Dominance of efficiency imperative in policy making• Ineffective involvement of stakeholders• Drivers and instruments of policy differ across domains

History

• Economic specialization defines long term path dependency

• Institutions and priorities have their ”defining moments”

• Priorities and agendas are implicitly strongly influenced by traditions and corporatist systems for stakeholder involvement

• Reflective governance needed

6. Knowledge about biases

• Are biases reflected in processes of policy making?

• Do governments know what they represent and exclude?

• Are there misconceived holy cows in the system?

• Are the biases resulting from economic specialisation?

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C2 BUSI NESS FI NANCED R&D AT GOV.

C4 SHARE OF CO-OP I NNOVATORS

D1 TERTI ARY EDUC. (25-64)

D2 PARTCI PATI ON LLL

D3 KNOWLEDGE I NVESTMENTS

DX VENTURE CAPITAL

F1m % I NNOV. FI RMS MAN.

F1s % I NNOV. FI RMS SER.

F2 CAGR LABOUR PROD. (HOUR WORKED)

F3 CAGR VA I N MT/HT [MANUF?]

F4 CAGR EMPOYM. IN MT/HT [MANUF?]

S Mean

NorwayPicture 1: NOR

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C4 SHARE OF CO-OP I NNOVATORS

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D2 PARTC I PATION LLL

D3 KNOWLEDGE I NVESTMENTS

F1m % I NNOV. FI RMS MAN.

F1s % I NNOV. FI RMS SER.

F2 CAGR LABOUR PROD. (HOUR WORKED)

F3 CAGR VA I N MT/HT [MANUF?]F4 CAGR EMPOYM. I N MT/HT [MANUF?]

NOR Mean

Sources of incoherence

• Often persistent gaps between what is perceived as challenges and institutional responses to meet them

• Competing rationalities in governments• Persistent short-termism tend to undercut strategic

needs• NPM: Needs strategic support to enhance long-termism• Different views and understanding of IP• Different imperatives for different policy areas• Fragmentation reduces strategic capabilities • Competition and personal ambitions

Fish farming as nexus of policies

Aquacultureis fishing!

Aquacultureis fishing!

Aquacultureis farming!Aquacultureis farming!

Aquaculture is anenvironmental hazard!Aquaculture is anenvironmental hazard!

Aquaculture shouldbe process industry!Aquaculture should

be process industry!

Farmingof fish in the sea

MDMDNHDNHD

LDLD

What is this newphenomenon

”aquaculture”?

FIDFID

Who is to takeadministrative responsibility?

Long termism

• Most countries need long term approaches for strategic priority setting

• But existing institutions and practices (fragmentation, budget mechamisms) prevail

• Many countries compensate for this through by-pass operations and new funding mechanisms

The use of evaluations in Austria

Impacts of conducted evaluation

N %

Ex-post legitimating of the programme

27 90 %

Re-allocation of funds 10 33 %

Input for stop-or-go decisions

6 20 %

Substantial change of funding policy

9 30 %

Change of processes 2 7 %

Other 9 30 %

Total 30

Source: tip survey, Jörg 2004).

Building intelligence into policy learning

• Policy learning mostly takes place through ex ante mechanisms like foresight and white papers

• Evaluation too often used for legitimization • Organisational mechanisms like tasks forces, team work

etc support learning• Increasing need for socio-institutional adjustments

stimulate knowledge flows• More systemic and integrated evaluations in innovation

policy are needed• Implementation and monitoring systems may boost

learning

Some conclusions

• Integrate learning across the policy cycle• Governance practices are tightly linked with

capacities for policy learning• Leadership and communication will support a

learning oriented organisation• Develop appropriate knowledge bases to

support agenda setting, prioritization and implementation

• Develop pragmatic public-private interfaces to enhance information exchange

• Balancing imperatives in horizontal approaches