Making Innovation Policy Work

Learning from Experimentation

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This book explores emerging topics in innovation policy for more inclusive and sustainable growth, building on concrete examples. It develops the notion of experimental innovation policy – which integrates monitoring and feedback at the policy design stage, and occurs continuously to improve impact and implementation. This approach should help improve the quality and efficiency of public expenditures supporting innovation policy.

Experimental policy making is particularly important for new and emerging innovation domains, where the scope for learning and improvement is the greatest. To make the discussion as concrete and relevant as possible for practitioners and policy makers, three emerging domains of innovation policy are explored in greater detail: innovative entrepreneurship, green innovation, and pro-poor or base-of-the-pyramid (BoP) innovation.


Scaling up and sustaining experimental innovation policies with limited resources: Peripheral Schumpeterian development agencies

This chapter examines how two historically low-technology economies, Finland and Israel, assumed leadership in new and rapidly evolving innovation- based industries. It argues that “Schumpeterian development agencies”, the Finnish Fund for Research and Development and the Israeli Office of the Chief Scientist in the Ministry of Trade and Industry, played a transformative role, by introducing new science and technology policies and facilitating industrial restructuring. However, in contrast to the literature on the developmental state, these agencies were located on the periphery of the public sector and had few hard resources. The chapter describes how their peripheral location facilitated successful experimentation. It also explains how ostensibly marginal agencies were able to scale and monitor new initiatives successfully. More specifically, it shows that reform-oriented policy makers in small states were able to leverage extensive inter-personal networks to facilitate scaling and international openness to ensure monitoring. In identifying the specific mechanisms used by policy makers to introduce, scale and monitor policies, it also shows why these two historically innovative economies have struggled to support experimentation in recent years.


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