Policy Brief: Ecosystems challenge the evaluation of the effectiveness of innovation policy

 Ecosystems play an increasingly important role in the implementation of innovation and industrial policies at the regional, national and EU levels. Evaluation and measurement of the significance and impact of different types of ecosystems, both nationally and internationally, is still evolving, while evaluation of the impact of ecosystems is a complex undertaking. Current measurement methods and data collection do not go far enough in verifying the wider societal impacts of ecosystems.

Innovation ecosystems at the heart of changing innovation policy in Finland and analogue countries

Innovation policy has traditionally sought to influence the development and introduction of innovation. Innovation has been seen as a key means of raising productivity, supporting economic and employment growth and increasing citizen well-being. Innovation policy, in particular, has broadened and deepened at the same time over the last decade.

A fundamental change to current innovation policy approaches compared to past incarnations is that policies and instruments are increasingly targeting an identifiable ecosystem with policies now more focused on strengthening the effectiveness of the ecosystem as a whole and the conditions for its innovation. Where, for example, in cluster policy, the focus was mainly on companies in the same industry, the development of innovation ecosystems is often motivated by a societal challenge or a change trend at a phenomenon level which also involves significant business opportunities. Responding to such developments requires broader cross-sectoral cooperation in RDI activities and the connecting of resources and expertise between different actors.

The survey carried out by MDI Public Oy and Etla Oy examines the current state of innovation policy on innovation ecosystems and their role in innovation policy and instruments in four analogue European countries (Great Britain, Belgium, Sweden and Denmark) with the help of documentary material and interviews.

Compared to Finland, the concept of the ecosystem is less visible in the analogue countries’ innovation policy where more traditional cluster approaches are emphasised. It should be noted however that in this case, the policy objectives largely represent a more traditional range of innovation policy and an examination of effectiveness (e.g. RDI, geographical cooperation between SMEs and research patents) rather than indicators and evaluation seeking to understand the transition to systemic modelling and observation related to climate policy or digitalisation. In Sweden the evaluation of innovation programmes also brought to the attention the wider societal impact of the programmes and the transition effects, such as those on the green and digital transitions.

Examining the effectiveness of innovation ecosystems requires an understanding of the logic of impact and a broader examination of effectiveness

The term ‘innovation ecosystem’ refers to the whole range of different actors that is formed around the creation of new knowledge and its utilisation. When analysing innovation ecosystems, the survey focuses on the interdependence of different actors, the relationships and interactions between actors and evolutionary developments. The innovation ecosystem is a relatively recent concept that research has only begun to conceptualise.

Innovation ecosystems’ utilisation in innovation policy requires a broader examination of effectiveness. It is essential to pay attention to the amount and form of RDI investments by innovation actors, their outputs and the combination of innovation capabilities, resources and knowledge. From the perspective of societal change, the interest here is in the effects on the content orientation and strategies of innovation activities, as well as on the organisation and processes of innovation activities which affect the more efficient emergence, introduction and dissemination of innovations.

The concept of an innovation ecosystem poses many challenges in respect of examining effectiveness and quantifying impacts. Current RDI policy indicators and data collection do not adequately capture the effectiveness of ecosystem development policies and the importance of ecosystems. Different pathways of effectiveness and the associated sharing of a deeper understanding of the impacts sought by innovation ecosystems is one step towards the more accurate measuring of effectiveness.

The final report of the project implemented by MDI Public Oy and ETLA Economic Research will be published in the spring of 2022 in the Government’s series of publications on research and studies.

More information:

Valtteri Laasonen, Leading Expert, MDI Public Oy, p. +358 50 533 0604, valtteri.laasonen@mdi.fi

Pirjo Kutinlahti, Chairman of the Project Steering Group, Leading Expert, Ministry of Economic Affairs and Employment, pirjo.kutinlahti@gov.fi