Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Centre for Innovation Research

No 2022/9: Great expectations: the promises and limits of innovation policy in addressing societal challenges

Mart Laatsit (), Markus Grillitsch () and Lea Fünfschilling ()
Additional contact information
Mart Laatsit: CIRCLE, Lund University, Postal: CIRCLE - Centre for Innovation Research, Lund University, PO Box 117, SE-22100 Lund, Sweden
Markus Grillitsch: CIRCLE, Lund University, Postal: CIRCLE - Centre for Innovation Research, Lund University, PO Box 117, SE-22100 Lund, Sweden
Lea Fünfschilling: CIRCLE, Lund University, Postal: CIRCLE - Centre for Innovation Research, Lund University, PO Box 117, SE-22100 Lund, Sweden

Abstract: In the policy discourse on societal challenges it has become common to think of innovation policy as the universal tool for addressing societal challenges. However, we argue that innovation policy has limits to what it can do, and for it to remain a useful tool for tackling societal challenges, it is necessary to re-assess its role. Thus, this paper addresses the following research questions: What are the theoretical implications of the augmented expectations of innovation policy to deliver system change, what role can innovation policy play in contributing to system change, and what conditions this role. Linking to the literature on wicked problems and radical innovations, we differentiate between disruptive and progressive system change, and show that the potential role of innovation policy differs between these two types of change. Acknowledging both the potential and limitations of innovation policy, we make a proposition for how an ambitious innovation policy contributing to system change may be conceived.

Keywords: Innovation policy; System change; Societal challenges

JEL-codes: O38

Language: English

24 pages, July 4, 2022

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