Course overview
This course addresses the reasons (why/for what), the methods (how), and the results
(what) obtained from government intervention in innovation trajectories.
different aspects of policy intervention in innovation (systems) are discussed, with a focus on
the interactions of actors, in the creation of ideas, their application in innovations, and their
diffusion
this course also builds bridges between different disciplines in order to come to a better
understanding of innovation
the rationales and relevance of science/industrial/competitiveness/innovation policies will be
discussed
,innovation drives economic growth and has the ability to address societal challenges.
An example of this is the industrial revolution: income per capita soared and new products,
services and technologies became available year after year.
European paradox is the perceived failure of EU countries to translate scientific advances
into marketable innovations.
the urgency of innovations:
● health, demographic change and wellbeing
● food security, sustainable agriculture
● secure, clean and efficient energy
● smart, green and integrated transport
● climate action, environment, resource efficiency and raw materials
● secure societies
complexities with innovations:
- innovations are unpredictable and they emerge in complex systems with many
actors, interests, organizations and expectations
- factors as: the state of knowledge, individual creativity, public policy,
economic institutions, and social norms
- new knowledge and innovations can create new problems and disrupt economies
- innovations cause new divisions of labour and a different distribution of wealth and
risk
innovations are the introduction of new solutions in response to problems, challenges or
opportunities that arise in the social and/or economic environment. such innovation-which is
the result of new combinations of existing knowledge, capabilities, and resources-is
regarded as a major source of change in all economic activities, in poor as well as rich
countries in low-tech as well as high-tech, in services as well as manufacturing, in the public
as well as the private sector, and so on.
the difference between an invention and an innovation is that an invention is a novel idea for
how to do things and innovation is carrying it out into practice.
steps in carrying out of new combinations:
1. introduction of a (for consumers) new good
2. introduction of a (for the industry) new method of production
3. opening of a (for the industry) new market
4. conquest of a new source of supply of inputs
5. new organisations of any industry
the first fundamental theorem of markets as efficient resource allocators:
1. there is a complete set of markets so that all supplied/demanded goods and services
are traded at publicly known prices
2. all consumers and producers behave competitively
3. an equilibrium exists.
, the only violation of these assumptions (due to market failures) warrants intervention, but
with the risk of government failure
Knightian uncertainty are uncertainties where the consequences cannot be measured
the Knightian uncertainties in the innovation process:
- can we invent it (discovery uncertainty: how much R&D to invest for a solution)
- can we make it (technical uncertainty: from invention to innovation, R&D)
- can we sell it (market uncertainty: form innovation to diffusion)
This course addresses the reasons (why/for what), the methods (how), and the results
(what) obtained from government intervention in innovation trajectories.
different aspects of policy intervention in innovation (systems) are discussed, with a focus on
the interactions of actors, in the creation of ideas, their application in innovations, and their
diffusion
this course also builds bridges between different disciplines in order to come to a better
understanding of innovation
the rationales and relevance of science/industrial/competitiveness/innovation policies will be
discussed
,innovation drives economic growth and has the ability to address societal challenges.
An example of this is the industrial revolution: income per capita soared and new products,
services and technologies became available year after year.
European paradox is the perceived failure of EU countries to translate scientific advances
into marketable innovations.
the urgency of innovations:
● health, demographic change and wellbeing
● food security, sustainable agriculture
● secure, clean and efficient energy
● smart, green and integrated transport
● climate action, environment, resource efficiency and raw materials
● secure societies
complexities with innovations:
- innovations are unpredictable and they emerge in complex systems with many
actors, interests, organizations and expectations
- factors as: the state of knowledge, individual creativity, public policy,
economic institutions, and social norms
- new knowledge and innovations can create new problems and disrupt economies
- innovations cause new divisions of labour and a different distribution of wealth and
risk
innovations are the introduction of new solutions in response to problems, challenges or
opportunities that arise in the social and/or economic environment. such innovation-which is
the result of new combinations of existing knowledge, capabilities, and resources-is
regarded as a major source of change in all economic activities, in poor as well as rich
countries in low-tech as well as high-tech, in services as well as manufacturing, in the public
as well as the private sector, and so on.
the difference between an invention and an innovation is that an invention is a novel idea for
how to do things and innovation is carrying it out into practice.
steps in carrying out of new combinations:
1. introduction of a (for consumers) new good
2. introduction of a (for the industry) new method of production
3. opening of a (for the industry) new market
4. conquest of a new source of supply of inputs
5. new organisations of any industry
the first fundamental theorem of markets as efficient resource allocators:
1. there is a complete set of markets so that all supplied/demanded goods and services
are traded at publicly known prices
2. all consumers and producers behave competitively
3. an equilibrium exists.
, the only violation of these assumptions (due to market failures) warrants intervention, but
with the risk of government failure
Knightian uncertainty are uncertainties where the consequences cannot be measured
the Knightian uncertainties in the innovation process:
- can we invent it (discovery uncertainty: how much R&D to invest for a solution)
- can we make it (technical uncertainty: from invention to innovation, R&D)
- can we sell it (market uncertainty: form innovation to diffusion)
