Research Policy 41 (2012) 1037–1047
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Research Policy
journal homepage: www.elsevier.com/locate/respol
Legitimizing research, technology and innovation policies for transformative
change
Combining insights from innovation systems and multi-level perspective in a
comprehensive ‘failures’ framework
K. Matthias Weber a,∗ , Harald Rohracher b
a
b
AIT Austrian Institute of Technology, Department Foresight & Policy Development, Donau-City-Straße 1, 1220 Vienna, Austria
IFZ, University of Klagenfurt, Schlögelgasse 2, 8010 Graz, Austria
a r t i c l e
i n f o
Article history:
Received 18 October 2010
Received in revised form 5 September 2011
Accepted 4 October 2011
Available online 11 April 2012
Keywords:
Innovation policy
Innovation system
Multi-level perspective
Sustainability
Transition
Reflexive governance
a b s t r a c t
The recent policy debates about orientating research, technology and innovation policy towards societal
challenges, rather than economic growth objectives only, call for new lines of argumentation to systematically legitimize policy interventions. While the multi-level perspective on long-term transitions has
attracted quite some interest over the past years as a framework for dealing with long-term processes of
transformative change, but the innovation systems approach is still the dominant perspective for devising
innovation policy. Innovation systems approaches stress the importance of improving innovation capabilities of firms and the institutional settings to support them, but they are less suited for dealing with the
strategic challenges of transforming systems of innovation, production and consumption, and thus with
long-term challenges such as climate change or resource depletion. It is therefore suggested to consider
insights from transition studies more prominently in a policy framework that is based on the innovation systems approach and the associated notion of ‘failures’. We propose a comprehensive framework
that allows legitimizing and devising policies for transformative change that draws on a combination of
market failures, structural system failures and transformational system failures.
© 2012 Elsevier B.V. All rights reserved.
1. Introduction
Since almost 40 years, namely since the publication of the “Limits to Growth” study by Dennis Meadows and his collaborators
(Meadows, 1972), the idea that we need to change fundamentally our industrial societies has continuously gained support. The
debate about sustainable development has given this paradigmatic shift in thinking further momentum, and more recently the
European debate about Grand Challenges has reinvigorated it (EU,
2008). It is widely recognized that innovation in its various forms
has a crucial role to play for realizing the kind of transformative
change needed. The notion of long-term transformative change
captures the idea that fundamental changes in our models for production and consumption are needed if either major threats to our
societies are to be prevented or significant new opportunities to be
seized.1 However, for realizing long-term transformative change
∗ Corresponding author. Tel.: +43 50550 4560; fax: +43 50550 4599.
E-mail addresses: matthias.weber@ait.ac.at (K.M. Weber),
rohracher@ifz.tugraz.at (H. Rohracher).
1
This double definition avoids the understanding that major changes are only
driven by negative expectations of the future. In fact, as the past history of “long
0048-7333/$ – see front matter © 2012 Elsevier B.V. All rights reserved.
doi:10.1016/j.respol.2011.10.015
more is needed than individual product or process innovations at
firm level, but comprehensive system innovations, i.e. novel configurations of actors, institutions and practices that bring about a
new mode of operation of entire sectors or systems of production
and consumption.
Current innovation policies nevertheless still put their main
emphasis on economic growth and the ability of national
economies or industrial sectors to generate innovations per se, but
hardly deal with the challenges of more fundamental types of transformative change (Alkemade et al., 2011). Modifying a distinction
introduced by Smits et al. (2010)2 , we argue that ‘structural innovation policies’ which focus on optimizing the structure of innovation
waves” has shown, these were also driven by a combination of scarcities in prevailing production-consumption models and opportunities associated with still highly
uncertain new models.
2
Smits et al. (2010), distinguish ‘strategic innovation policy’, which aims at inducing structural change in innovation systems, from ‘operational innovation policy’,
which is meant to improve innovation systems gradually in situations of steadystate. With our notion of transformation-oriented innovation policy we go beyond
the realm of narrowly defined innovation systems by addressing also system innovations in the associated systems of production and consumption.
1038
K.M. Weber, H. Rohracher / Research Policy 41 (2012) 1037–1047
systems and their ability to generate new knowledge and technology need to be complemented by ‘transformation-oriented
innovation policies’ which strategically focus on the transformation of whole systems of innovation, production and consumption,
such as the energy system. Challenges of the type of sustainable
development cannot be met without such a broadening of current innovation policies towards long-term strategic orientation
and integration with other policy fields such as environmental,
energy or agricultural policy. There are particularly two conceptual strands of discussion which could serve as a foundation for
policies aiming at a long-term transformation of our production
and consumption structures: innovation systems thinking and the
multi-level perspective of socio-technical transitions.
The Innovation Systems approach that has been developed
since the late 80s and has been very instrumental for legitimizing and designing research, technology and innovation (RTI) policy
(Lundvall, 1992; Nelson, 1993; Edquist, 1997; OECD, 2002; Box,
2009). However, policies inspired by prevailing innovation systems
approaches mainly aim at optimizing the institutional environment of firm-based innovation processes and not at transforming
whole systems of production and consumption (Tukker et al., 2008;
Alkemade et al., 2011). More recent approaches to some degree
take up this challenge of transformative change. The “Technological Innovation Systems” (TIS) approach focuses on the performance
(functions) of technology-specific innovation systems and policies
to improve growth and overall performance of TIS, for instance in
areas such as renewable energy technologies (Bergek et al., 2008a;
Hekkert et al., 2007; Hekkert and Negro, 2009). Nevertheless, its
focus is on technology-specific systemic change and not on the challenge of strategic transformation of broader systems of production
and consumption.
Such strategic, long-term transformation processes are at the
centre of interest of the Multi-Level Perspective and associated
to it the approaches of Strategic Niche Management and Transition Management (Schot et al., 1994; Weber et al., 1999; Hoogma
et al., 2002; Rotmans et al., 2001; Elzen et al., 2004; Geels, 2004,
2005; Grin et al., 2010). While these approaches indeed aim at goaloriented system transformation, they are, however, only loosely
connected with mainstream innovation policies and thus have not
yet gained sufficient legitimacy and impact. Many important arguments in support of transition-oriented policies remain unheard
due to their incompatibility with the prevailing innovation policy framework. From our point of view, the conceptual foundation
and actual implementation of transformation oriented innovation policies could be significantly improved by combining the
strengths of structurally oriented innovation systems approaches
and the transformation-oriented multi-level perspective. Higher
acceptance in policy circles could be gained in particular by better
integrating the extensive work on system failures as justification
for policy intervention.
In this paper, we argue that such an integration of novel ideas
of transition thinking with the current framework of innovation
policies and system failures indeed is possible and would help
strengthen the strategic orientation of innovation policies. In the
next chapter we will highlight the complementarities of innovation
systems approaches and the multi-level framework of transitions
in terms of their scope, their interpretation of change, and their
implications for policy legitimation. In a further step we will show
how the integration of complementary lines of reasoning can be
made fruitful for policy purposes, by developing a coherent framework for both structural and transformation-oriented innovation
policies, which captures insights from both schools of thought and
helps making innovation policies ready to face the grand challenges
of a more sustainable development. The framework will build on
the notions of market and in particular system failures, which legitimize current innovation policies. The advantage of being more
compatible with prevailing policy thinking is that it opens up the
opportunity of making transition ideas much more influential in
policy-making. Finally, we provide an assessment of the benefits
of this integrated policy framework and give an outlook on future
research needs that can be derived from this framework.
2. A comparative assessment of transition and innovation
systems approaches
The potential of combining the multi-level perspective and
innovation systems approach has already been recognized by
Markard and Truffer (2008). In their analysis they identify common
conceptual ground between those two approaches and sketch out
steps towards an integrated framework – particularly between the
technological innovation systems and the multi-level perspective.
However, little attention has been paid to RTI policy as an important
and more action-oriented domain of integration. It is this gap that
we aim to address with our contribution, with a particular emphasis
being put on the consequences for legitimizing policy interventions
in processes of transformative change.
We will first draw some comparisons of innovation systems and
transition approaches and put particular emphasis on complementarities in terms of conceptual focus, dynamics of change and policy
approach resulting from these concepts. According to the focus of
our paper, we will point out policy consequences also in the sections
on focus and dynamics.
2.1. Conceptual focus
Innovation systems approaches – whether with a focus on
national (Lundvall, 1992; Nelson, 1993; Edquist, 1997), regional
(Cooke et al., 2004), sectoral (Malerba, 2004, 2005; Dolata, 2009)
or technological (Carlsson and Stankiewicz, 1991; Johnson and
Jacobsson, 2001; Hekkert et al., 2007) innovation systems – put
the emphasis on the innovation-activities of firms as key actors
in economic and innovation processes and on the systemic contexts which limit, direct or support their innovation activities and
capabilities. When used for comparative purposes, they particularly
focus on differences in institutions and institutional settings, which
affect the capacity and styles of firms and other actors to innovate.
Systemic contexts may include knowledge infrastructures, structures for corporate financing (e.g. availability of venture capital),
the organization of research and education, the characteristics of
labour markets, tax regimes or patent legislation. While national
systems of innovation initially have been at the centre of interest, other systemic contexts – particularly regions, industry sectors,
and more lately technological systems – have increasingly gained
attention. Innovation policies aim at creating an institutional environment for firms which is more conducive to their innovative
capabilities, creates synergies and spill-over effects and helps them
to adapt to transformations of the techno-economic environment.
A system perspective with a more strategic orientation has been
particularly introduced by the technological innovation systems
(TIS) concept. TIS are defined as “socio-technical systems focused
on the development, diffusion and use of a particular technology (in
terms of knowledge, product or both)” (Bergek et al., 2008a, p. 408).
Actors, networks and institutions as the structural components of
a TIS are the basis for its growth and further development through
entrance of new organizations, network building or institutional
alignment. The TIS-approach links these processes and interactions
of structural components to an innovation policy which supports
the stabilization or even break-through of new socio-technical
configurations. This link is provided by the concept of ‘functions’
which mediates between the structural components and the policy
level. These functions stand in for basic ‘activities’ or key processes
K.M. Weber, H. Rohracher / Research Policy 41 (2012) 1037–1047
required for successful system growth and performance of the
innovation system. Seven functions are proposed by Bergek et al.
(2008a, p. 411), namely knowledge development, entrepreneurial
experimentation, resource mobilization, market formation, legitimation, development of positive external economies and influence
on the direction of search, but also slightly different assignments
of functions or key processes have been suggested (e.g. Chaminade
and Edquist, 2010).
There certainly is a danger of such technology-specific
approaches to overlook interactions with other system environments, such as sectoral, regional or national contexts (Jacobsson
and Bergek, 2011). Although TIS can be located between the level
of niches and regimes (Markard and Truffer, 2008), they are usually centred on specific, (usually) emerging technologies and do
not fully tackle the problem of transformative change of existing
sectoral systems or socio-technical regimes, such as the energy
system.3 To some extent this issue is addressed by the positiveexternal-economies function which is about strategic overlaps
between different TIS and about the potential of jointly working
across different TIS (Bergek et al., 2008b). However, such strategies
are not systematically explored and TIS-analysis mainly provides
foundations for technology-specific policies (Jacobsson and Bergek,
2011), but is not a sufficient basis for broader transformationoriented innovation policies.
Such processes and policies are at the core of the transition
approach4 which focuses on systemic innovations (Elzen et al.,
2004; Grin, 2008) (in contrast to innovations at firm-level) and
goal-oriented long-term transformation processes (Geels, 2004;
Rotmans et al., 2001). The understanding of transitions builds on a
multi-level perspective (MLP) which distinguishes socio-technical
transformation dynamics at different levels of aggregation: niches
(technological projects, emerging technologies) as a source of variety, testbed and an ‘engine for change’, regimes (such as the energy
system) providing stable structures and a selection environment for
innovations and socio-technical landscapes (cultural norms, values
and other broader social structures) as slowly changing sociotechnical contexts at the level of societies (Rip and Kemp, 1998;
Geels, 2005). Regimes have been primarily defined around societal
functions and needs, such as housing, mobility or food. In practice,
these regimes have often been investigated for infrastructure systems (e.g. energy, transport, sanitation) but conceptually they could
be applied to almost any type of complex social system (Loorbach
and Rotmans, 2010; Loorbach, 2007). Nevertheless, such a delineation of regimes cuts across well-established sectoral, regional
or national institutional contexts and puts emphasis on demand
structures and a broader range of stakeholders who may equally
drive or be part of systemic innovation processes. While innovation
systems approaches focus on adaptations of systemic contexts to
foster firms’ innovation activities and are rather agnostic about the
content of innovations (see Azar and Sandén, 2011, on the related
question of technology-neutral policies), transition management is
about innovation and transformation of the systemic context itself
and about strategies to direct this system transformation towards
particular goals (which in many concrete cases is approximated by
the notion of sustainability).
Innovation systems and multi-level approaches thus are complementary in their focus. The multi-level perspective puts
3
Though the TIS-approach is in principle not restricted to the analysis of particular
emerging technologies (cf. Geels et al., 2008, p. 528; Johnson and Jacobsson, 2001),
most of the more recent empirical analyses focus on the emergence and growth of
new technology fields.
4
We use the term ‘transition approaches’ in a broad sense, referring to the analysis
and governance of transformational socio-technical change. Transition management is a more specific governance strategy to shape such change processes, as
e.g. described in Loorbach (2007).
1039
emphasis on stable socio-technical structures (regimes) which fulfil
certain societal needs. In doing so, it highlights the way these needs
are fulfilled, the role of demand and use, and the inter-linkage of
institutions, technologies and social practices. Complementary to
this ‘issue-orientation’, innovation system approaches much more
focus on the ‘internal functioning’ of systems, i.e. the role and
interactions of different types of actors (firms, intermediary actors,
etc.) for knowledge generation and diffusion, and the institutions
that enable and restrain their behaviour. While the stability and
dynamics of need-oriented socio-technical regimes is at the core
of multi-level and transition approaches, the micro-dynamics and
performance of innovation systems in terms of knowledge generation and contribution to economic growth is the focus of innovation
system thinking. These are not contradictory but rather complementary orientations and the challenge for policies is increasingly
to combine these aims.
2.2. Dynamics of change
Dynamics in most innovation systems concepts is not so much
a transformative dynamics at the systemic level, but a microdynamics of interactions between firms – patterns of collaboration,
organization of value chains, behaviour of firms, knowledge flows
between actors, collaboration of firms with universities, networks
of innovators, etc. – and the framing and shaping of these interactions by institutions, policies and technologies (e.g. sector specific
types of innovation behaviour – Pavitt, 1984; Marsili, 2001). Other
actors to enhance innovation activities, such as public or semipublic agencies or knowledge brokers, are important as well to
understand innovation dynamics. At the macro-level, innovation
system approaches put emphasis on the measurement and comparison of innovation systems performance as a basis for adaptations in
innovation and technology policy, with performance being essentially understood as the ability to generate innovation per se.
Although transformation dynamics are not of central concern for
innovation systems research, long-term cycles of techno-economic
paradigms (Freeman and Perez, 1988) or sectoral transformation
processes (Dolata, 2009; Malerba, 2005) due to technological or
other structural changes have been studied within this framework,
though not as an outcome of policies aiming – in the normative
sense – at the transformation of these systems towards specific
goals, but rather from an analytical angle.
This is somewhat different with technological innovation
systems approaches which are interested in the dynamics of sociotechnical change and attempt to link policy prescriptions to support
such dynamic growth processes to structural components, such
as institutions, networks, companies and other actors. However,
TIS-approaches still fall short of coherently linking structural innovation system policies to the policy-requirements of long-term
transformative change.
The multi-level perspective, in contrast, particularly focuses
on long-term transformation dynamics of socio-technical regimes.
Transition studies from a multi-level perspective rather look for
broader patterns of change dynamics at the level of socio-technical
regimes (see e.g. Geels and Schot, 2007). This phenomenological
approach produces its most convincing results in a historic perspective. Transition studies have been criticized for their weak
conceptualization of agency and power (Genus and Coles, 2008;
Smith et al., 2005). Though this critique has been rejected by transition scholars, the point of criticism remains valid that the relations
between intra-regime dynamics (such as the behaviour of firms)
and regime change are not particularly conceptualized in transition
studies. With a future-orientation, transition management focuses
on strategies to create new dynamics of change and to build-up
momentum for change processes through learning processes in
niches, alignment of actors, orientation and coherence through
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vision building processes, etc. A particular strength of transition
studies lies in linking the dynamics of regime change to microprocesses of niche formation and the macro-level of landscapes
– whether as a stabilizing or destabilizing factor. However, at a
more specific level the linkage of niche and regime processes is
less clear (Smith, 2007) and lacks analytical depth. The high discretion in defining and delineating niches and regimes probably
is an additional barrier to a more coherent conceptualization of
micro-level dynamics within regimes and their contribution to stability and change. Smith and Raven (2012) make an important step
towards providing a differentiated conceptualization of the functions of niches for transforming socio-technical regimes.
Again we see important complementarities of a conceptualization of micro-dynamics of innovation system constituents with
a focus on long-term transformation of regimes. A closer integration of IS and transition approaches would have to combine
the analytic rigour of innovation systems approaches in relating
actor behaviour, change in system structures and functions with
the long-term transformative focus of transition studies and its
strengths in analysing these long-term dynamics as multi-level
process.
These arguments show that the innovation systems perspective
offers important building blocks to explain transformative change,
but it needs to be complemented by elements from the multi-level
perspective.
2.3. Policy approach
The analysis of strengths and weaknesses of the institutional
make-up and performance of national, regional or sectoral innovation systems has been widely accepted as a basis of technology
and innovation policy. The Organization for Economic Co-operation
and Development (OECD) uses the national innovation systems
concept as an integral part of their analytical perspective (Sharif,
2006). The organization facilitates the development of coherent
systems of measurement of input and performance indicators,
international comparison of innovation performance and diffusion
of good practice of research, technology and innovation (RTI) policy
between industrialized countries by providing statistics, analysis and recommendation for its members. Intellectual property
rights, innovation-related tax incentives or the facilitation of closer
university–industry relationships, to name some examples, are part
of the standard repertoire of contemporary economic policy. It
also develops and propagates rationales for RTI policy, which are
regarded as sound and convincing sources of scientific legitimacy
of policy interventions. Complementing the neo-classical market
failure arguments to justify policy intervention in the innovation
process, for instance in terms of underinvestment in research or
the problem of external costs (Smith, 2000; Jaffe et al., 2005),
the range of legitimate justification has been expanding to different types of system failures (see Smith, 2000; Georghiou and
Metcalfe, 1998; Woolthuis et al., 2005). Such innovation-systemsbased policies largely follow a state centred perspective, although
the limitations of top-down steering approaches in face of highly
complex and distributed innovation processes are well acknowledged (Kuhlmann et al., 2010). Moreover, such types of policy are
mainly structure-oriented and aim at improving various parts of the
innovation infrastructure such as the research and education system, science–industry relations, labour market relations or access
to finance (“structure-centred policies”). The failure of innovation
policies to deal with long-term normative goals for systemic change
is to some extent addressed by ‘new mission oriented policies’
and discussions about appropriate technologies and strategic innovation policies for e.g. reducing global warming (Mowery et al.,
2010; Smits et al., 2010), but such considerations have only recently
entered innovation systems thinking and policy making. It implies
a greater need for policy coordination between RTI-policy and
other sectoral (e.g. transport, energy, etc.) or cross-cutting (e.g. tax,
regional development, etc.) policies. It is also due to this growing
attention to sectoral policies that demand-side innovation policies
have attracted greater attention (e.g. Edler and Georghiou, 2007).
The situation is not much different with regard to TIS, where
the identification of particular functional patterns and the TISperformance in terms of the achievement of system functions helps
to identify technology-specific key policy issues, but still does not
take full account of the need for guiding technological innovation
in a specific direction. Recently, some attempts have been undertaken to better integrate issues of governance of socio-technical
change into the TIS approach – either by stressing the importance
of ‘systemic reflexivity’ as the ability to “‘identify’ and ‘reflect’ on
outcome, and to alter its path of development based on this information” (Fogelberg and Sanden, 2008, p. 68), or by introducing
regimes and landscape from the MLP-framework as the environment of a TIS and explicitly studying governance arrangements
internally and externally to the TIS (Hillman et al., 2011). Such concepts are in line with our claim for a broadening of the concept of
systemic failures which we will introduce in the next section as a
basis for a broader portfolio of innovation policies.
Despite these attempts, goal-orientation and radical system
transformation is more directly addressed in the transition management and multi-level perspective. Transition policies are
centred around specific problem areas (e.g. climate change) or
systems of provision like water management, energy supply or
transport (“issue-centred policies”). Transition policies particularly
focus on the interactive development of joint societal visions, the
creation of learning environments and experiments, the alignment
of new actors and the constant re-evaluation and adaptation of
goals and strategies. Legitimacy for policy intervention is provided by consensus. The concrete operationalization and effective
implementation of these aims and principles still is disputed:
Walker and Shove (2007) question the way transition management
and reflexive governance deal with the inherent contingency and
ambivalence of sustainability goals and ask to bring such contradictions into ‘the open’ to avoid obscuring the dynamics of power
involved in transition practice; Berkhout (2006) questions the possibility of normative, consensual, collective visions as a guidance of
system innovations in contrast to visions as an emergent feature
of social processes; and Meadowcroft (2009) addresses the problem of collectively specifying the character of desired transitions
which can be expected to be messy and infested with power struggles rather than consensual as implicated in transition concepts.
Moreover, as Meadowcroft (2009) rightly points out, policy instruments of transition management (visioning, experiments, etc.) are
often set apart from more traditional regulatory, planning, financial and tax-based approaches which make it difficult to make
these policy instruments and their supporters part of transition
efforts. In general, transition management should be much more
concerned with political interactions and policy processes, e.g.
through which societal goals are determined, decisions enforced
and resources allocated. In recent years the transition debate has
taken into account at least some of these critical issues. Considerable advances have been achieved in integrating concepts of power
and politics into transition management (see e.g. Hendriks and
Grin, 2007; Avelino and Rotmans, 2009; Grin et al., 2010). This
has also ‘softened’ the emphasis of transition management on consensus as a source of legitimacy by acknowledging plurality and
struggle between discursive spheres as a basis of designing transitions (Grin, 2006; Hendriks and Grin, 2007). However, as Jørgensen
(2012) points out, alternative and ‘flatter’ concepts than the multilevel perspective (e.g. ‘arenas of development’) may be needed to
fully take account of the variety of different practices, internal conflicts and inconsistencies of the involved actor-worlds.
K.M. Weber, H. Rohracher / Research Policy 41 (2012) 1037–1047
This attempt to broaden transition-oriented policies and make
them better compatible with existing portfolios of innovation
policies is particularly prevalent in the literature on ‘reflexive governance’ (see particularly Voß et al., 2006). It is before all the grand
challenge of sustainability which calls for new forms of problemhandling (Voß and Kemp, 2006) and thus other forms of policy
approaches than those aiming at achieving predetermined outcomes through planning and control as well as assuming a “neat
separation between government and the society/economy/science
it is governing.” (Grin, 2006). Reflexive governance acknowledges
the diversity of patterns of societal problem-handling, national policy styles, regulatory arrangements, organizational management
forms, or sector network structures which can be observed across
different countries.
Still, what such accounts of new types of governance often
underplay “is the political context of reflexive processes, and the
politics they generate” (Hendriks and Grin, 2007, p. 333). The solution of Hendriks and Grin (2007) fits well with the intention of this
paper: reflexive arrangements should be seen as sitting between
and interconnect a series of overlapping arenas of public discourse,
such as the formal discursive spheres of parliaments or expert committees and informal discursive spheres of, e.g. media mobilization.
Re-phrased for our purposes, reflexive arrangements need not be
seen as a separate ‘policy project’ (an attempt transition management approaches have been criticized for – see Meadowcroft, 2009)
but create new interfaces between existing (structurally oriented)
innovation policy arenas with other types of policies, actors and
discursive spheres. Our suggestion of an extended system failure
concept may serve as a ‘boundary object’ to establish such linkages.
Again, the complementary approaches of innovation and transition policies leave ample room for synergies. While transition
research has developed a repertoire of policy instruments and a
high level of reflection and critical discussion about the formulation and set-up of goal-oriented system transformation policies,
innovation systems policies show their strength in clearly identifying system failures as rational justifications for policy interventions
and adapting the system (including system innovations) once the
selection environment has changed or a new technology base is
at the horizon. Consistent with this orientation, transition policies
put more emphasis on the demand-side and the integration with
other issue-centred policy areas, such as climate policy, while innovation system policies put supply-side issues into the foreground
and rarely deal with goal-oriented system transformation (with the
exemption of the performance goals of the TIS approach). A tighter
connection with established innovation policies and their underlying rationales may lend more legitimacy to transition policies and
help integrate them into mainstream policy processes.
3. New rationales to legitimize policies for transformative
change
In our comparison of innovation systems and multi-level
transition approaches we have highlighted the various complementarities and potential synergies between these concepts and
the increasing need in face of grand challenges such as energy supply or climate change to come up with coherent policies which
serve both aims, improving innovative capabilities of firms and
other innovation system constituents, and strategically inducing
a process of transformative change of these systems of innovation, production and consumption towards greater sustainability.
While such an integration of innovation systems and transition
approaches could also take place at an analytic level of micro and
macro-level system dynamics, we believe that coherent policies
can be designed without ‘unifying’ these approaches.
1041
One way of achieving coherence in the policy rationales based
on the two approaches would be to stick to the idea of market
and system failures which frame and legitimize current innovation
policies and reformulate the lack of strategic and transformation
orientation of these policies in terms of additional failures innovation policies have to address. To achieve this, the policy rationales
inspired by transition management and the multi-level perspective
need to be reframed in order to be better connected to prevailing policy debates on the legitimacy of interventions which have
been derived from neoclassical and in particular innovation systems thinking. These additional failures should address those lines
of argumentation that have been highlighted in the preceding section as shortcomings of innovation systems thinking as compared
to multi-level transition approaches: missing direction of change,
explicit integration of demand-side issues, coordination and alignment of institutional change in innovation policy with other, often
sectoral policy fields, and finally the need to instil more elements of
reflexivity in long-term and inherently uncertain change processes.
Although recent debates about rationales for research, technology
and innovation policy have already begun to take up these issues,
not least under the influence of a renewed interest in public policy
missions, grand challenges, and the like, there is still no coherent
policy framework in place that would integrate these rationales.
Building on our analysis of complementarities between multi-level
and innovation systems framework, this section proposes such an
integrated policy framework.
3.1. Legitimizing policy interventions for transformative change –
New types of failures
The standard rationale for policy intervention in innovation
activities is based on the market failure argument as developed
by Arrow (1962). Of particular importance in the context of innovation is market failure leading to under-investment in research.
The argument is that a fully competitive, decentralized market system will provide a sub-optimal level of investment in knowledge
development as a consequence of the public good character of certain types of knowledge, of potential knowledge spill-over effects,
and of the short time horizon applied by market actors in their
investment decisions. This under-investment justifies both public subsidies for basic knowledge development and the shaping
of specific protection and incentive structures such as a system
of intellectual property rights (Hauknes and Nordgren, 1999). To
compensate for information asymmetries, the market failure argument can also be used to justify different forms of generic R&D
subsidies, tax incentives, or measures to foster the availability of
venture capital (Box, 2009). Other typical market failure arguments
that are less common in relation to innovation policy, but relevant
in transformation-related sectoral policies refer to the problem of
external costs (or to the ‘tragedy of the commons’ (i.e. the overexploitation of public resources); both relevant with regard to the
uptake of innovations.
These lines of argumentation are equally accepted from an innovation systems perspective. However, additional arguments are
commonly used under the heading of system failures, because
market-based systems are regarded to suffer not only from underinvestment in knowledge development, but also to systematically
create mechanisms contributing to weak system performance. Correcting the sub-optimal mechanisms may require acting contrary
to conditions of perfect competition, for instance when fostering
cooperation and collaboration between firms and universities, or
when implementing safety or environmental regulations. Categorizations of system failures may differ, but as a recent categorization
the approach by Woolthuis et al. (2005) distinguishing between
four main types of failures may be useful:
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• Infrastructural failure, i.e. deficits in existing physical infrastructures needed to enable innovation activities. Infrastructure
failure from a systems perspective is compatible with the market failure-based argument on the risk of under-investment in
research and innovation.
• Institutional failures, for which hard and soft failures are distinguished. The former refer to formal institutional mechanisms
that hinder innovation (e.g. regulations, standards, legislation),
whereas the latter relate to matters of political and socioeconomic cultures, social norms and values. Institutional failures
may not necessarily give rise to calls for new institution-building,
but equally to the removal or modification of existing institutions,
both private and public ones.
• Interaction or network failures, for which weak and strong
failures can be identified. Strong network failure arises, when
interactions are too dense to allow for novel insights or inspirations to emerge. Internal orientation of an organization may
lead to myopia, absence of weak ties with other actors and strong
dependence on just a few partners to lock-in phenomena. Weak
interaction failure exists when there is too limited exchange with
third parties, thus inhibiting interactive learning and ultimately
innovation.
• Capabilities failure, which refers to the absence of the necessary capabilities to adapt to new and changing circumstances
and (technological) opportunities. While capabilities failure
comprises an element of under-investment in research (i.e.
of market failure), it also captures the systemic problem of
path-dependency of firms due to their inability to absorb new
knowledge.
From the perspective of transformative change, these wellestablished system failure arguments are still valid in the context
of transformative change to justify policy intervention, but they are
too restrictive and leave out several important instances of failure.
Additional types of failures come into play, due to the broader scope
of transformative change as compared to innovation performance
only, and due to the long-term and fundamental character of the
transformation process in question. These additional failure arguments point to a need for innovation policies that induce processes
of transformative change and are thus strategic in nature.
The above discussion has shown that conventional market and
system failure arguments to legitimize policy interventions are useful and valid, but they are confined to addressing structural deficits
in innovation systems, and do not give sufficient justice to the
kinds of arguments from the multi-level perspective that have been
identified as preventing processes of transformative change from
occurring in a socially and politically desirable way. We suggest
complementing them by additional types of system failures (“transformational failures”) in order to take on board the requirements
of goal-oriented transformative change.5 These additional types of
failures mirror recent debates in the context of transition management as well as in sustainability policy, but they have as yet not
been explicitly linked to the structurally oriented failure paradigm
that still dominates policy debates in important fora such as the
OECD or the European Union. This may also explain why important requirements of long-term transformative change have only
5
In this context, it is important to be aware that the notion of failures is not
uncontested. It assumes the existence of an ideal market or system, in comparison
with which deficits or failures can be identified. From an evolutionary perspective,
several of these ‘failures’ should possibly rather be regarded as normal tensions that
arise naturally and productively in the context of processes of change. However, the
notion of failures is so pervasively used in policy-making as well as in economics
that it would be very challenging to propose a completely different language. Still,
the problems associated with the notion of ‘failures’ should be kept in mind when
using it in the context of innovation and transformative change.
recently found their way into the prevailing policy debates about
research and innovation.
Subsequently, four such additional failures are going to be
introduced. Each of these failures is explained in terms of the mechanisms that give rise to the failure, and different types of corrective
policy measures are introduced that could be applied in response
to the failure.
3.2. Directionality failure
System failure arguments refer to the sub-optimal operation
of innovation processes, independently of any concerns about the
direction of innovation and change. Proactively stimulating and
thus prioritizing specific innovation activities in order to exploit
opportunities that could contribute to moving in the direction of
desired long-term transformative change is outside of what would
be regarded as acceptable in a conventional market or system failure framework (see Kubeczko and Weber, 2009). Transformative
change, on the contrary, is intimately linked to the question of
direction and requires the setting of collective priorities; priorities that require a strategic policy approach to be in place. We
therefore suggest an additional type of failure, namely directionality failure. It points to the necessity not just to generate innovations
as effectively and efficiently as possible, but also to contribute to
a particular direction of transformative change. This direction is
defined, for instance, by the identification of major societal problems or challenges, for which solutions need to be developed with
the help of research and innovation. As an example, the current
debates about the future of energy supply can be mentioned. It is
widely recognized as a major challenge for which long-term solutions need to be developed and research efforts be concentrated in
order to enable cumulative knowledge development and learning
around specific technologies. Directionality failure should not be
mixed up with anticipatory myopia that is sometimes mentioned as
an example of market failure arguments because the latter is used
only to justify more investment in research and innovation, but not
with a view to a specific direction of change. However, some market
failure arguments that are common for instance in environmental
policy are of interest in the context of directionality failure, such as
the aforementioned external costs problem. Corrective measures
to avoid negative external costs may improve the necessary price
signals and thus have an impact on the broad corridors of transformative change, but they do not provide the required orientation in
terms of specific priorities. Therefore, technology-specific policies
are needed as an element in the portfolio of policy instruments to
provide more targeted impulses, in particular when moving closer
to large-scale diffusion of new technologies (Jacobsson and Bergek,
2011; Azar and Sandén, 2011). Overcoming directionality failures
implies two levels of translation and intermediation of guiding
orientations to be realized. First, requirements external to the innovation system need to be absorbed, and second, they need to be
interpreted and negotiated in order to provide orientation for the
different actors. This mechanism has been recognized by scholars of transition management, mostly associated to the notion of
sustainable development. In practice, it is achieved by establishing
shared future visions. This inroad is a central element in current
policy debates (e.g. related to future visions for the ERA, missionoriented policy approaches to tackle grand challenges, or attempts
to devise policy and technology roadmaps), and it is maintained as
an important policy approach. To take again the example of energy
supply, the development of guiding energy visions provides orientation for policy development, which will hopefully contribute to
giving rise to more coherent policy portfolios that support a process
of transformative change.
However, vision-building is just one option to tackle the most
daunting issue in relation to directionality, namely how to achieve
K.M. Weber, H. Rohracher / Research Policy 41 (2012) 1037–1047
collective coordination. Often there is no consensus about the direction to take. Matters of power and agency play an important role in
the definition of any vision, as well as for the subsequent activities
and policies which may be in line or not with the key features of a
vision. For instance, decentralized power supply based on a higher
share of renewable has been propagated as an alternative vision
to the prevailing centralized large-scale energy supply model. A
reconfiguration of the energy supply system would challenge the
position of the dominant utility companies. However, to the extent
that a shift towards a different system of energy supply emerged
as strategic political preference, the utility companies got increasingly engaged in renewable and decentralized sources of energy.
This shows that reflexive and participatory processes, supported
by scientific evidence, may help in this process of creating shared
expectations, enabling open coordination, and defining joint agendas for action.
When it comes to implementing policies in line with a vision,
soft instruments of coordination and information, hard interventions like for instance regulations and standards, and funding, for
instance for research, development and demonstration and key
innovation infrastructures prove to be useful for guiding the direction of change. In the very end, they serve to define certain corridors
of acceptable development paths, inside of which the bottom-up
forces of innovation, production and consumption can operate.
Stabilizing such novel paths by creating and consolidating pathdependencies is a key principle of policy intervention to follow.
In the energy field, the range of relevant policies is quite broad
and covers regulation aspects (e.g. price-caps) as well as incentives for research or planning requirements. Due to the complexity
of innovation systems, single policy instruments are not sufficient
to provide the necessary guidance and direction to innovation for
transformative change; a portfolio of instruments is needed to remedy directionality failures at different levels of intervention.
3.3. Demand articulation failure
A second gap in the market failure argument applied to transformative change is that current arguments capture under-investment
on markets for knowledge and innovation, but they do not address
at all these kinds of issues in relation to production and consumption. Similarly, system failure arguments do not tackle issues
of demand and their influence on the further shaping of innovations and ultimately transformative change either. The system
failure framework is not applied to novelties once they have moved
beyond the innovation stage and should be taken up on markets
in the form of products or services. The reasons for this lack of
market uptake in a context of transformative change are manifold. Often, complementary social, organizational or institutional
innovations are required to turn them into a success. Shortcomings in enabling the uptake of innovations by users and consumers
are yet another type of failure that justifies policy intervention; a
failure that is particularly relevant for determining the need for
interventions by sectoral policies. We call this demand articulation
failure because it reflects a deficit in anticipating and learning about
user needs. A typical example of demand articulation failure can be
found in the area of eco-products that are not geared to the requirements of households. Ecological sanitation systems or household
waste separation required a lot of attention of users and were not
adapted to the daily lives of normal citizens – not least because
user practices and expectations were not sufficiently reflected in
the socio-technical arrangements around these products.
Suitable types of policies to address demand articulation failure
comprise support to joint learning processes involving producers and users, for instance along the lines of concepts like ‘living
labs’ (Almirall and Wareham, 2011) or Strategic Niche Management (Schot and Geels, 2008), but also greater attention to new
1043
and hitherto neglected forms of innovation, such as user-led and
open innovation (see e.g. von Hippel, 2005). In instrumental terms,
insights and experiences from experimental approaches for integrating consumers and producers in innovation processes can be
built upon, in order to raise awareness of new possibilities, to
explore the potential of novel technological and social innovations,
and more generally to integrate users and consumers in more open
innovation models. A closer cooperation with end-users would be
an important element to achieve fundamental changes in the above
mentioned systems of sanitation and recycling.
Other inroads to overcome demand articulation failure are
related to public procurement. Government and public administration are major investors and can use innovation-oriented
procurement mechanisms to directly stimulate the advancement
of novel solutions from the demand side. As an alternative option,
policy support can be provided to the building up of competencies
of potential users to articulate their needs and demands (Edler and
Georghiou, 2007).
3.4. Policy coordination failure
Thirdly, the interaction of different levels and areas of policies
relevant to transformative change points to a novel form of coordination failure, namely policy coordination failure. Although the
notion of coordination failure in research and innovation policy has
been used as an example of system failure, it refers only to coordination problems of R&D actors, not to coordination problems at
policy levels.
Ensuring the coherence between the activities of national,
regional, sectoral and technological institutions becomes an important task for policy, as also reflected, for instance, in the growing
efforts to improve coordination between national and European
policies. Multi-level policy coordination failure is increasingly
addressed in Europe through open methods of coordination, ERANets and joint programming in order to contain this specific type
of policy coordination failure (European Commission, 2010). In the
field of agriculture and climate change, for instance, a better coordination between national and European research policy agencies
is sought in the context of SCAR (Standing Committee of Agricultural Research), in order to better utilize and focus research funds
on the most important commonly defined future challenges arising from the impact of climate change on agriculture (European
Commission, 2009a; Harper and Georghiou, 2010).
Similar instances of failure have given rise to efforts for tackling horizontal coordination failure between RTI-policy, sectoral
policies (e.g. transport, energy, health, industrial sector policies)
and cross-cutting policies (e.g. tax policy, economic policy, regional
policy). The underlying failure refers to the need for coherent policy impulses from different policy areas in order to make sure
that indeed the necessary goal-oriented transformative changes for
tackling major societal challenges can be achieved (OECD, 2005). It
goes beyond directionality failure in that it refers to the coordination of concrete policy actions and initiatives.
Closely related to horizontal coordination failure is vertical
policy coordination failure between ministries and sub-ordinate
agencies in charge of policy implementation or between different levels of government (OECD, 2005), for instance at regional,
national, and European levels. An example in case is the underutilization of demand-side policies such as public procurement
to foster transformative change towards sustainable construction (European Commission, 2009b). Although the legal provision
at national level is nowadays in place, following an EU regulation, their implementation at local level where the bulk of
public construction investments are made, is still lagging behind.
For such coordination requirements, it is important to avoid a
‘naïve understanding’ of hierarchical multi-scalar relationships and
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conceptualize transitions as “interdependent processes between
territorialized, local and trans-local networks within the context
of (changing) multi-scalar, institutional structures” (Coenen et al.,
2012, p. xy/32).
In addition to these matters of coherence between different
areas and levels of policy, policy coordination failure equally applies
to coherence with private sector institutions and their policies.
Standard-setting, for instance, is often delegated to private or
mixed public–private institutions, which should also be taken into
account with regard to policy coordination failure. The construction
sector can be used as illustrative example in this regard, because it
generally exhibits a rather low level of innovation which to some
extent is due to the slow and insufficient coordination processes
between largely private technological standard setting and a variety of different building codes at regional or national level.
Policy coordination failure also comprises temporal mismatches
related to the timing of interventions by different actors (Sartorius
and Zundel, 2005). If the sequence of different policy interventions, e.g. R&D funding and regulation, is not well harmonized,
this may well result in undesirable outcomes and collective lock-in
into sub-optimal technology trajectories. As shown for the case of
energy-efficient housing, the window of opportunity for switching
from incremental improvements of energy efficiency of windows
to passive housing was missed (Nill and Kemp, 2009).
These policy coordination requirements are likely to raise the
need to increase administrative capacity. This implies that the
frequent claims for down-sizing the capacities of public administration, but also of the private sector, for managing the necessary
policy coordination processes, in particular in the context of transformative change, need to be questioned. In fact, the demands on
public and private sector in the context of correcting policy coordination failure are rather likely to increase.
3.5. Reflexivity failure
Finally, the long-term character of transformative change, associated with the uncertainty surrounding innovation and change
requires a continuous monitoring with respect to progress towards
the transformation goals and the development of adaptation strategies. Reflexivity needs to be built into processes of transformative
change, pointing to what may be called reflexivity failure. It
addresses the ability of the system to monitor, to anticipate and
to involve actors in processes of self-governance. This is actually
an issue that is relevant to all three aforementioned types of transformation failures, but it has also important repercussions beyond
them. Reflexivity in the sense of Hendriks and Grin (2007), i.e. as the
creation of reflexive arrangements at the interfaces between established discourse arenas is important for institutional coordination,
demand articulation and directionality, but there is also a need for
reflexivity at societal level to prepare for and frame the other three
more specific levels of reflexivity. Bringing reflexivity into the equation transcends a strictly evolutionary approach to transitions as
there is no ‘outside’ perspective which policymakers may take (see
Garud and Gehman, 2012). Consequently, reflexive policy arrangements resemble ‘hybrid forums’ that serve as “coordination devices
for collective sensemaking, imaginization and enactment” (ibid., p.
xy/25).
Reflexivity failure has three major implications for the governance of transformative change. First of all, the long-term and
goal-oriented character of transformative change, together with
the limitations to governance imposed by complexity, uncertainty
and ambiguity inherent to innovation and change imply that a
continuous monitoring and anticipation function needs to be established in society as a pre-condition for an adaptive policy and
governance approach to be implemented. This brings us back to
the starting point of the discussion of policies for transformative
change, because the evidence-based approach needed to legitimize
policy interventions in the first place is also a key to ensuring reflexivity. More broadly speaking, reflexivity requires being able to draw
on a monitoring, anticipation, evaluation and impact assessment
system (“strategic intelligence”) that provides the analytical and
forward-looking basis for reflexive discourses and adaptive policies.
A second element that is needed for reflexive governance is
reflexive arrangements that take into account the distributed
nature of decision-making and intelligence when preparing specific policies for transformative change. Such arrangements include
wider and often informal societal discourses as one of the spheres
of reflexivity, but equally the more formalized discursive spheres in
parliamentary (e.g. enquete commissions) and ministerial environments (e.g. formal consultation mechanisms with key stakeholder
groups).
Finally, an adaptive policy approach means that options are kept
open and parallel developments admitted in order to be able to cope
with uncertainty. Portfolio approaches rather than single options
are not yet very common in policy-making, but would be needed
in order to tackle reflexivity failures in the course of transformative change. In line with a more experimental approach to policy
learning, adaptivity also means the ability to stop innovation trajectory and associated policy initiatives, if they turn out to be less
promising than initially expected.
The issues related to reflexivity failure can be illustrated by the
example of civil security, which has acquired a lot of attention over
the past 10 years, for instance in relation to the vulnerability of
physical and digital infrastructures. In view of the heterogeneity of
connotations and meanings assigned to security, a public discourse
sphere is essential for preparing a process of transformative change
in this area. As all other more specific policy discourses, it needs
to be underpinned by exploratory intelligence to grasp potential
future security risks. However, the range of options for handling
such security risks is as broad as the range of risks itself, and a continuous monitoring and adaptation of both high-ranking security
risks and prioritized options needs to be performed in face of limited resources and capacities. Reflexivity is thus closely linked to the
provision of platforms for interaction as well as spaces for experimentation, monitoring and learning (see also Smits et al., 2010) –
particularly higher order types of learning where actors reflect on
the conditions and engage in the transformation of the very systems
in which they operate (Hendriks and Grin, 2007, p. 336).
3.6. An integrated framework of failures to support policies for
transformative change
By combining the four additional types of transformational failures with market failures and the four main types of failures as
introduced by Woolthuis et al. (2005), we thus obtain a more comprehensive and unified picture of the kinds of failures that would
give rise to legitimate rationales for policy interventions in processes of transformative change. They provide guidance and criteria
for designing and justifying a portfolio of policies for transformative
change that covers the full spectrum of innovation-related policies
from research to sectors, and addressing both structural and transformational system failures. Table 1 provides an overview of the
eight types of system failures, four structural and four transformational, and the four types of markets failures, together with an
explanation of the main mechanism that lead to the occurrence of
the failure. These 12 failures can be used to guide developing a policy approach to foster the kind of transformative changes we need
to address major societal challenges in areas such as energy supply and mobility, but also in other fields such as health or cleaner
production.
K.M. Weber, H. Rohracher / Research Policy 41 (2012) 1037–1047
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Table 1
Overview of failures in the context of transformative change.
Market failures
Type of failure
Failure mechanism
Information asymmetries
Uncertainty about outcomes and short time horizon of private investors lead
to undersupply of funding for R&D.
Public good character of knowledge and leakage of knowledge lead to socially
sub-optimal investment in (basic) research and development.
The possibility to externalize costs leads to innovations that can damage the
environment or other social agents.
Public resources are over-used in the absence of institutional rules that limit
their exploitation (tragedy of the commons).
Lack of physical and knowledge infrastructures due to large scale, long time
horizon of operation and ultimately too low return on investment for private
investors.
Hard institutional failure: Absence, excess or shortcomings of formal
institutions such as laws, regulations, and standards (in particular regarding
IPR and investment) create an unfavourable environment for innovation.
Soft institutional failure: Informal institutions (e.g. social norms and values,
culture, entrepreneurial spirit, trust, risk-taking) that hinder innovation.
Strong network failure: Intensive cooperation in closely tied networks leads to
lock-in into established trajectories and a lack of infusion of new ideas, due to
too inward-looking behaviour, lack of weak ties to third actors and
dependence on dominant partners.
Weak network failure: too limited interaction and knowledge exchange with
other actors inhibits exploitation of complementary sources of knowledge and
processes of interactive learning.
Lack of appropriate competencies and resources at actor and firm level
prevent the access to new knowledge, and lead to an inability to adapt to
changing circumstances, to open up novel opportunities, and to switch from
an old to a new technological trajectory.
Lack of shared vision regarding the goal and direction of the transformation
process; Inability of collective coordination of distributed agents involved in
shaping systemic change; Insufficient regulation or standards to guide and
consolidate the direction of change; Lack of targeted funding for research,
development and demonstration projects and infrastructures to establish
corridors of acceptable development paths.
Insufficient spaces for anticipating and learning about user needs to enable the
uptake of innovations by users. Absence of orienting and stimulating signals
from public demand Lack of demand-articulating competencies.
Lack of multi-level policy coordination across different systemic levels (e.g.
regional–national–European or between technological and sectoral systems;
Lack of horizontal coordination between research, technology and innovation
policies on the one hand and sectoral policies (e.g. transport, energy,
agriculture) on the other; Lack of vertical coordination between ministries and
implementing agencies leads to a deviation between strategic intentions and
operational implementation of policies; No coherence between public policies
and private sector institutions; No temporal coordination resulting in
mismatches related to the timing of interventions by different actors.
Insufficient ability of the system to monitor, anticipate and involve actors in
processes of self-governance; Lack of distributed reflexive arrangements to
connect different discursive spheres, provide spaces for experimentation and
learning; No adaptive policy portfolios to keep options open and deal with
uncertainty.
Knowledge spill-over
Externalization of costs
Over-exploitation of commons
Structural system
failures
Infrastructural failure
Institutional failures
Interaction or network failure
Capabilities failure
Transformational
system failures
Directionality failure
Demand articulation failure
Policy coordination failure
Reflexivity failure
4. Conclusions
In this paper we have worked out a set of guiding rationales
for underpinning a broader approach to innovation policy that
is geared towards inducing and realizing long-term processes of
transformative change towards sustainability. With these rationales we have tried to reconcile structure-oriented innovation
system approaches with the multi-level perspective of sociotechnical transitions. While the former approach at present serves
as the main basis for legitimizing innovation policies in OECD
countries, the multi-level perspective offers several lines of argumentation that are extremely relevant and valuable for devising
policies in support of goal-oriented transformative change. First of
all, it explicitly focuses on the goal-orientation of system transformations. Secondly, while the innovation systems approaches tend
to emphasize the supply side of innovation only and neglect the
production and consumption side of system transformations; this
is represented prominently in the multi-level literature.6 Thirdly,
as a consequence of their emphasis on transformative change, the
multi-level perspective also takes the need for better coordination
between research, technology and innovation policy on the one
hand and other relevant policies on the other more prominently
into account than the innovation systems literature. And finally, the
multi-level perspective recognizes the importance of reflexivity for
the shaping of long-term transformation paths.
These four arguments – as derived from the multi-level perspective – have been reformulated as transformational system failures.
Together with the well established market and structural system
failure arguments, they provide a comprehensive framework for
6
Obviously, there are exceptions from this general assessment of innovation
systems approaches. In particular, sectoral perspectives on innovation systems
explicitly highlight the role of the demand side for innovation (Malerba, 2004).
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K.M. Weber, H. Rohracher / Research Policy 41 (2012) 1037–1047
legitimizing research, technology and innovation policies for transformative change.
This extended framework of failures allows for a policy-oriented
integration of innovation systems concepts with the complementary multi-level-perspective on transitions. Transformational
failures provide the necessary underpinning for strategic innovation policies that are geared towards stimulating and enabling
transformative change in innovation, production and consumption.
What follows from this framework is that policy and governance
for transformative change, ranging from research, technology and
innovation to sectoral domains, can take legitimately matters of
directionality and technology choice into account in policy design
and implementation.
Our framework pronounces the importance of innovation policies not only for economic growth and competitiveness, but also for
dealing with other challenges and policy aims; i.e. it helps to extend
the innovation system framework towards other, more “downstream” policy fields and make it more robust in a changing policy
environment, where ‘grand challenges’ have acquired a prominent
role as guiding policy aims. In this regard, it also goes beyond the
set of functions that have been defined for technological innovation
systems. While functional rationales are in principle very useful
devices for legitimizing policies, the recent TIS-literature focuses
primarily on the early phase of emergence of new technologies.
For the multi-level perspective, the framework offers advantages in that its main arguments gain relevance, credibility and
support in policy debates by connecting them to the prevailing
models for legitimizing policy interventions. Moreover, it allows
putting more emphasis on cross-cutting economic and competition
policy considerations in debates about transition management;
considerations that have not been very prominent in the respective literature, but which are crucial if transformative changes are
to be achieved in practice.
All in all, our approach could lead to more coherent policies
and the reconciliation of different policy aims by positioning them
within a common framework. However, as Azar and Sandén (2011)
point out, there may also be instances where it is not possible to bridge these contradictions between economic growth by
structural improvement and transition objectives which might be
detrimental at least to currently dominant concepts of growth;
even in this case, the aim of reconciling structural and transformative policies might open an arena for interaction, dispute and
negotiation, thus stressing the need for strengthening reflexivity
in the governance of policies for transformative change. Moreover,
the promise of devising better policies for transformative change
may come at a cost. New and additional demands on government
are raised by the framework suggested, in particular with regard to
governance in terms policy coordination and reflexivity to be built
into policy-making.
The integrated failures framework suggested also opens up
a new research agenda that would allow systematizing current
debates about transition policies and making them more relevant
for policy-making. First of all, by re-framing some key insights
from transition studies in a failures language and combining them
with the current state-of-the-art thinking on structural innovation
system failures, a framework has been developed that provides
coherent guidance for identifying needs for policy intervention for
transformative change and criteria for developing policy instruments and portfolios. This framework now needs to be tested in
practice as a support instrument for policy development. With the
ongoing debates about Grand Challenges, a wide range of fields has
been opened up where this type of approach could be brought to
bear.
Secondly, the framework has been developed on the basis of the
existing literature on innovation systems and multi-level transition
research. The importance of the different types of failures suggested
may differ from area to area, and it may well be that some failures
have still been overlooked. Moreover, thorough methods and criteria need to be devised to assess whether in particular the four
novel types of failures really represent a problem or not. A series of
empirical studies, aiming to study the occurrence and magnitude
of such failures should be launched. This empirical work should
go hand in hand with a refinement of the concepts and definition
suggested of what constitutes a failure in the context of long-term
transformative change.
Thirdly, the notion of failures may dominate policy debates and
thus be important to connect with, but it is a concept that starts
at least implicitly from an idealized and static system model as a
reference. However, in a world of innovation, other guiding terms
than ‘failures’ may be more appropriate for better capturing the
evolutionary (and often complex) nature of transformative change
and associated needs for policy intervention. This may sound like
a matter of semantics only, and it may change little about the substance of the main arguments raised in this paper, but it suggests
working on a new policy vocabulary that is better in line with most
recent advances in innovation research.
Finally, the integrated failures framework has been developed
inductively by drawing on main lines of reasoning from the prevailing innovation systems and multi-level perspectives. In order
to further consolidate the theoretical underpinnings of this policyoriented framework a more thorough integration of multi-level
perspective and innovation systems approach would be needed.
While it should rely on a systems vocabulary, it should be broader
than current innovation systems approaches and take into account
the breadth of what the multi-level perspective covers. In particular, a consideration of longer time horizon, of production and
consumption aspects, of institutional settings beyond research,
technology and innovation, and of reflexive mechanisms should
be taken into account.
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