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Challenge-Driven Innovation Policy: Towards a New Policy Toolkit

Mazzucato, M; Kattel, R; Ryan-Collins, J; (2019) Challenge-Driven Innovation Policy: Towards a New Policy Toolkit. Journal of Industry, Competition and Trade 10.1007/s10842-019-00329-w. (In press). Green open access

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Policy makers are increasingly embracing the idea of using industrial and innovation policy to tackle the ‘grand challenges’ facing modern societies. This article argues that through well-defined goals, or more specifically ‘missions’, that are focused on solving important societal challenges, policymakers have the opportunity to determine the direction of growth by making strategic investments across many different sectors and nurturing new industrial landscapes, which the private sector can develop further, and as a result induce cross-sectoral learning and increase macroeconomic stability. This ‘mission-oriented’ approach to industrial policy is not about ‘top down’ planning by an overbearing state; it is about providing a direction for growth and increasing business expectations about future growth areas and catalysing activity that otherwise would not happen. It is not about de-risking and levelling the playing field, nor about supporting more competitive sectors over less since the market does not always ‘know best’ but tilting the playing field in the direction of the desired societal goals, such as the sustainable development goals. To achieve this requires a different policy framework, what we call the ‘ROAR’ framework, which involves strategic thinking about the desired direction of travel (Routes), the structure and capacity of public sector Organisations, the way in which policy is Assessed and the incentive structure for both private and public sectors (Risks and Rewards). The article argues that if we want to take grand challenges such as the SDGs seriously as policy goals, market shaping should become the overarching approach followed in various policy fields.

Type: Article
Title: Challenge-Driven Innovation Policy: Towards a New Policy Toolkit
Open access status: An open access version is available from UCL Discovery
DOI: 10.1007/s10842-019-00329-w
Publisher version: https://doi.org/10.1007/s10842-019-00329-w
Language: English
Additional information: This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
Keywords: Mission-oriented innovation policy. Market shaping . Dynamic spillovers
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Inst for Innovation and Public Purpose
URI: https://discovery.ucl.ac.uk/id/eprint/10089989
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