The workshop focused on mission-oriented innovation policies aimed at addressing societal challenges through collaboration between the public, private, and third sectors. Key characteristics of these policies include directionality, foresight, experimentation, and new forms of cooperation among stakeholders. The document emphasizes the importance of involving firms in the innovation process and suggests that transformative policies should be participative and facilitate both technological and social innovations.

1. Workshop on Transforiming Innovation Policy
Universidad Complutense de Madrid, Foro de Empresas Innovadoras and
Fundacion Ramon Areces
Madrid, 25 April 2017
Mission Oriented Innovation Policies:
The role of firms
José Molero * & José María Insenser*
* Universidad Complutense de Madrid & Foro de Empresas Innovadoras

2. What do we understand by Mission Oriented
Innovation Policies ?
• These kind of policies are not similar to the well known Mission Oriented Projects as
“Manhattan Project “ and the “Project Apollo” executed in XX century.
• These well known Mission Oriented Projects had a very defined objectives . Also the
Proponent of the funds to the Project and the customer were the same: The U.S.
Government agency (i.e.: NASA for Project Apollo).
• In our point of view the Mission-Oriented Innovation policies should be addressed to face
the societal Challenges . These Challenges are not solved only with technological
innovation, in spite the science and the technology are key elements to solve them…but
not enough!!. Innovation is NECESSARY BUT NOT SUFFICIENT.
• Another important key point is that societal challenges will imply the participation of many
parties (Government and public sector (universities, research centers, etc.) , private sector
(firms, research centers, etc) , third sector (NGOs, trade unions, professional associations,
etc.), that will require a very good coordination that should be carried out by government
agencies.

3. What do we understand by Mission Oriented
Innovation Policies ?
• Mission Oriented Innovation Policies try to stimulate to find new practical solutions, using
existing technologies or promising new technologies , or/and innovative business models ,
new organizational models on supply chain, or other innovations, to help to address
specific societal challenges recognized by public administration and civil society.
• We understand mission oriented innovation policies addressing societal challenges as
Transformative innovation policies with the following characteristics, including creativity
and diversity (Schot, J & Steimuller, W.E., 2016) :
• DIRECTIONALITY
• FORESIGTH
• EXPERIMENTATION
• NEW KIND OF COOPERATION AMONG ACTORS (Public sector, private sector, third
sector)

4. How the firms could be involved in the design of new
mission oriented innovation policies?
• Our approach is to analyze the firm's' behavior facing the societal challenges as an
innovation driver and how could converge them, together with other stakeholders (Users,
knowledge institutions, Government, etc.) to build new innovation policies.
Other
Innovation
stakeholders
Societal
Challenges
Innovation
Agents
(FIRMS)
New
Innovation
Policies

5. How the firms could be involved in the design of new
mission oriented innovation policies?
• To try to align the agents of innovation (mainly firms) with societal
challenges, we are moving bottom up, analysing the important changes in
Innovation and the firms’ adaptation to these new innovation paradigms.
• To build new policies in a complementary way with respect the top down
approach, we need to consider how firms are matching to changes in
innovation.

6. Changes in Innovation (I)
Due to internal characteristics of innovations:
• Cross fertilisation of technologies to innovate
• Pervasive technologies , the reutilisation of designs, re-cycling
(Circular economy vs lineal model economy)
• Increasing costs and obsolescence
• A new combination of public and tacit knowledge
• Organisational innovation
• New business models (Sharing economy, etc.)

7. Changes in Innovation (II)
Due to environment changes
• The role of suppliers and users: new concepts of the value chain (it affects the
entire innovation chain). The production of goods and new services enlarges it
contents both in elements included (complementary services, ICTs, etc) and in
the geographical distribution (global production chains).
• Particular importance of different system players in providing new ideas for
innovation (institutional hybridation): ie: scientific parks, Spin-offs.
Entrepreneurial universities, etc)
• From classical obstacles (costs, finance) to new ones; lack of interdisciplinary
knowledge, lack of demand for innovation.
• Regarding demand, it is a different weight on demand versus supply and
institutional factors.

8. Changes in Innovation (III)
The role of public sector
• Innovation in the public sector as a major driver of innovation in private
agents (firms) (ie.: PPI)
• But, just 20% of firms say public services for business has improved while 56% say
that have remained the same and 24% say they became worse and only 15% of Eu
Firms say innovative public services have a significant impact on their performance
(European Public sector Innovation Scoreboard 2013)
• A dominant “in house” pattern for public innovation:
• Up to 64% of organisations say in house innovation is the pattern (idem)
• The role of public procurement less important than sometimes exposed
(CIS).
• It fosters technological innovation at moderate level (3.8 out of 7 points) (idem)
• Nevertheless demand oriented factors more important for companies

9. Changes in Innovation (IV)
Internationalisation
• Factors fostering internationalisation of innovation:
Demand and supply factors (market or asset seeking)
Various levels:
Exploitation
Collaboration
Decentralisation
• New geographical distribution: declining role of Europe, growing
role of new comers
• New sectoral equilibrium: new agribusiness organisation and
production; Services; Services & manufacturing

10. How to fully involve firms with socio-technical change?
To try to attract firms to mission oriented innovation policies and socio-technical
change, it is necessary to keep in mind:
• Adaptation to changes in innovation is a continuous task and firms are doing it by
themselves as a natural evolution to remain and grow in the market.
• There are an important part of incumbent firms resistant to change.
• Firms reject the uncertainty (technological, economic, markets…)
• The sector matters (Malerba, 2005)
• Firms should be profitable
• Firms should grow and contribute to economic growth
• Firms should grow creating added value for the market.

11. How to fully involve firms with socio-technical change?
• Firms have several policy instruments to facilitate and stimulate their
own R&D and innovation investments.
R&D and Innovation
Policy on firms
• Direct
stimulus
• Indirect
stimulus
• Grants (subsidies, special credits)
• Public Procurement
• Tax credits
• PPI (Public Procur. for
Innovation
• PCP (Pre-comercial
Procurement)
• The additionality effect of R&D tax credits is on average stronger for SMEs, firms in the service
sectors, and firms in low-tech sectors in countries with an incremental scheme. (Castellacci F., ,
Lie, C.M., 2015)
• Public firms Creation/support

12. How to fully involve firms with socio-technical change?
• One important pillar of Transformative Innovation Policy is DIRECTIONALITY. This means that is
essential to provide DIRECTION to firm’s innovation efforts .
• The societal challenges can be addressed from multiple technological solutions and the
DIRECTION should avoid the firms reject valuable and creative solutions from early stage,
but it should avoid firms develop projects out of the scope of the mission oriented
innovation policy approved.
• Firms can be attracted to be involved in STANDARIZATION, specially the incumbent .
Standardization is a good tool to stimulate innovation.
• Pay more attention on policies affecting the DEMAND for innovative solutions (Attract firms with
Public Procurement Innovation (PPI) and Pre Commercial Procurement) and REGULATION (Edler,
J. & Fagerberg, J., 2016, TIK Working Papers on Innovation Studies)

13. How to fully involve firms with socio-technical change?
• Policies should allow to the firms overcome the “Death Valley”. This means to support
EXPERIMENTATION (to allow also shorter and cheaper), IMPLEMENTATION and EXPLOTAITION.
(Edler,J. & Fagerberg, J., 2016, TIK Working Papers on Innovation Studies)
• Societal challenges do not finish with a technological solution. Often need REGULATION,
transdisciplinary work, economic and social analysis. This means firms should work with other
actors as trade unions, local , state and supra state governments, Public agencies, NGOs, etc.
• Firms should cooperate among them. Often SME firms are afraid of bigger firms, and big firms
sometimes do not value the SME’s flexibility and knowledge. This is a big barrier to address
societal challenges
• H2020 Program/Open Eureka are instruments to address societal challenges. Transdisciplinary
cooperation among partnerships is carry out in consortiums.

14. How to fully involve firms with socio-technical change?
• Some times SMEs are afraid to
cooperate with big firms because
they fear to be eaten by them.
• So, Policies should stimulate that
SMEs cooperate with big firms and
with Public sector and third sector
,as a SYMBIOTIC Partnership
• SMEs should convert
as remorafish for
mutual Benefit with
big firms (shark)

15. Changes in Innovative Agents (Firms) (I)

16. CHANGES IN THE INNOVATIVE AGENTS (FIRMS) (II)
• How to finance that emerging architecture?. Are traditional
(internal and external) instruments useful?
• How to establish a new relationship between public and
private organisations?
• Internal and external training mechanisms. Another case of
hybridation?

17. CHANGES IN THE INNOVATIVE AGENTS (FIRMS) (III)
Internationalisation
• New global firms (born global)
• The cooperation is beyond the traditional pattern of technology transfer to
new comers
• Is it still alive the Uppsala model?. Korea as a suitable case of jumping stages
• Direct and indirect ways of internationalisation: supply chain including goods
and services producers (publicity, finance, and so on)
• Again, the case of KICS
• Differences according to home base augmenting versus home base exploiting
strategies

18. ELEMENTS FOR A FUTURE INNOVATION POLICY
• New position and functions of basic research and the commons: new role of universities; not all can
and/or must be done by private agents
• A necessary combination with a boost to demand driven kind of policies (both private – market and non
market) and public
• Providing Direction to Innovation. Improving the process of opening up to a wide range of choices and of
eventually closing down on options.
• Fostering the creative ideas and learning also from unsuccessful experiences.
• Firms should be more implied in foresight methods and experimentation to align its interests in
competitiveness with societal challenges.

19. ELEMENTS FOR A FUTURE INNOVATION POLICY (II)
• Analyzing the consequences of transformative innovation for the competitiveness
and sustainability of firms
• It is necessary to combine the perspective of social challenges with the
productive and competitive approach. The particular case of energy and
environment.
• Even in processes of social innovation, the opportunity costs have to be taken into
account
• However, the new wave of innovation policies cannot forget to give more
importance to the interaction among pieces of the system

20. ELEMENTS FOR A FUTURE INNOVATION POLICY (III)
PARTICULAR ATTENTION TO INTERNATIONALISATION
• Inward and outward perspectives
• Several levels:
• markets,
• collaboration,
• Decentralisation
• People mobility
• Increment attractive and absorptive capacities
• Not just innovation policies; circular causation with other
“innovation oriented”
• The insufficiency of national policies
• The insufficiency of Eurocentrism

21. ELEMENTS FOR A FUTURE INNOVATION POLICY (IV)
• The justification of the policies has to be based
much more on the availability of results showing
how the society (and firms) benefits from public
resources.
• Both qualitative and quantitative methods
• Technological, economic and social dimensions

22. ELEMENTS FOR A FUTURE INNOVATION POLICY (V)
• New organizations build by firms with different
expertise (transdisciplinary), but working together
with DIRECTION could carry out new innovations
that can, together with other actors, contributing to
change the socio-technical system addressing some
societal challenges .
• The design of new transformative innovation
policies should be a participative process trying to
involve public sector, private sector (SMEs and
incumbent firms) and third sector.

23. THANK YOU!