A Holistic Approach: Demand and Supply-Driven Innovation Policy

A Holistic Approach: Demand and Supply-Driven Innovation Policy

Weak Signal's progress: fully-fledged

This Weak Signal came from: 
European Commission Framework Programme for RTD

The theme/scheme related to this Weak Signal: 
Theme 8 - Socio-economic Sciences and the Humanities

The sub-theme that best relates to this Weak Signal: 
Use of indicators and related approaches for the evaluation of research policies and programmes

When did the Weak Signal manifest ? 

Weak Signal's description 
So far, traditional innovation policy mostly focuses on the development of innovation, the supply side of innovation, so to speak. Researchers from the German Institute of Global and Area Studies identified four main trends concerning global trends in innovation policy: 1) public funded technology programs, 2) innovation intermediaries (bringing together research and industry), 3) enabling producer-user relationships and 4) spending for R&D as share of the GDP. Recently, in Europe, a political discussion about a stronger emphasis on the demand side of innovation has started. The insight that both demand and supply side factors influence the way innovations emerge and diffuse on the markets becomes more common. Recent examples in China show that a focus on the supply side alone does not lead to the desired sustainable success, if other factors lack. Demand-driven innovation policy promotes innovativeness and diffusion of innovations by stimulating demand and by creating better conditions for the take-up of innovations. In contrast to supporting the R&D sector, it aims at the institutional design of the innovation system that is decisively responsible for a sustainable success of innovations. Discussed measures are (partly already implemented): financing and tax incentives, the public sector as lead customer (pioneering activities), public-private partnerships, public foresight and communication of innovation fields to the wider public to increase acceptance of new technologies. Demand-driven innovation policy especially drives innovations in the field of environmental technology, transportation and health. In Germany government incentives have created a large market for solar panels, and public funded pilot projects for electric cars are about to create kind of a test market with limited risks for the participating companies.