Examining Co-Evolving Policy and Innovation Systems

Examining Co-Evolving Policy and Innovation Systems

Introduction

Innovations and policy systems are integral parts of the economic development process that is accompanied by structural transformation. Considering

the interrelated nature of the above elements, there is a need to pay particular attention to incorporating science, technology, and innovation into

policies. Such an approach can trigger change processes and technological learning, which, in turn, determine the success of sustainable development

(Raven and Walrave, 2020; Rogge, Kern, and Howlett, 2017). A range of areas is impacted by the need to focus on the co-evolution of policy and

innovations, including health and well-being, education, clean water, life below water and on land, poverty, inequality, climate action, clean energy,

sustainable communities, as well as responsible production and consumption. Therefore, this paper focuses on the examination of the dynamics of

innovations, which is especially pertinent to the private sector of business. The case of Rio+20 shows that the practices of indigenous peoples are

representative of biodiversity preservation and promotion, which can be used as an example of facilitating entrepreneurship in developing countries

(Ely et al., 2013). In this connection, corporate sustainability reporting is one of the initiatives that imply a transparent and comprehensive

clarification of a firm’s solutions.

Hybrid approaches to linking policy and innovation systems emerge as the ways to ensure business sustainability. Compared to grassroots innovation

and green industrialization approaches, they are largely non-governmental and crowd-sourced in nature (Edmondson, Rogge, and Kern, 2020). The

cooperative motivations of hybrid approaches are driven by shared technologies and the intersection of local and global knowledge. Examples of

hybrids in the UK include Big Barn, the Food Assembly, Farm Drop, et cetera. It becomes evident that the identified approach has the most convincing

opportunities for transformational change across the sectors of the economy.

Speaking of policy implications, it is essential to state that their governance of co-evolving innovations is the key challenge. The hybrid approaches

bodies instead of the features of socio-technical systems. Kern and Rogge (2018) state that the inability of policymakers to design proper policies

caused their iterations. In this connection, it should be stressed that the interdependencies between the mentioned systems and policies are more

important than was considered earlier. Policy learning seems to play a decisive role in inducing technological change using examining various

elements of innovation systems, even though the outcomes can be hardly anticipated. Currently, there is a lack of sufficient knowledge since the

studies mainly focus on the positive results (Kern, Rogge, and Howlett, 2019; Kivimaa and Virkamäki, 2014). For example, it is stated that by fostering

the overcoming of failure challenges, it is possible to achieve lower production costs and scale up the production.

The technological change that is induced by policy mix reflects the dynamics of co-evolution of innovation and policy. The article by Hoppmann,

Huenteler, and Girod (2014) provides an example of how policy learning mechanisms can support the process of policy formation. The above authors

claim that the formal institutionalization of learning procedures is more important than policy interventions. The regulatory changes influence policy

dynamics, but often, the outcomes exceed those that were anticipated by policymakers. The case of the German study in the field of solar energy

the policy mix and socio-technical system. To address this goal, they applied a qualitative research design and provided a case study analysis. The

results of this study point to an important role of credibility that acts as one of the most powerful factors of change. Specifically to ZCH, it was found

that

“there are no requirements to evaluate buildings post-construction, and the regulations are based on an ‘as-designed’ specification” (Edmondson,

Rogge and Kern, 2020, p. 34). The performance of buildings was associated with replacing the materials with cheaper ones and the so-called ‘value-

engineered’ elements. Consistent with Reichardt et al. (2016), Edmondson, Rogge, and Kern (2020) state that exogenous conditions impact both

socio-technical and policy mix systems.

The resistance of the economy to scientific and technological innovations, the aging of fixed assets, as well as the slow decline in metal and energy

intensity promotes the debate about the problem of working not only with social but also with technical systems that determine a person’s social life.

The transition to a new approach to the development of society, science, technology, and production, dictates the need for non-monopolized

Given the abovementioned problem, it is necessary to discuss the creation and functioning of such a vehicle management system that would be an

organic part of the whole mechanism for managing social production and the entire economy of the country. Under these conditions, the choice of

scientifically based priorities for the development of science, technology, and production becomes a fundamental means of developing a strategy

(Greenwood, Congreve, and King, 2017). The question arises of creating a mechanism for a comprehensively managed system of society, including

technological change, which plays a leading role in socio-economic development (Greenwood, Congreve, and King, 2017; Rogge and Reichardt, 2016).

Thus, an adequate high-quality and logical-mathematical approach to the management of technical systems is required.

On the one hand, the democratization of public life makes it possible to increase the role of citizens and non-governmental organizations in preparing

important decisions in the field of nature conservation. There is no accident that it was environmental movements that were among the first to be

included in the democratic process (Lacasa and Shubbak, 2018). Reforms create prerequisites for embarking on the path of sustainable development

and allow formulating a new national idea and development strategy, which opens the way to harmonizing the interests of an individual, society, and

levels. First, the democratic decision-making procedure by the majority requires a relatively long time for its implementation (Rogge and Dütschke,

2018). To convince the majority of the country’s population to consciously abandon the consumer mentality and adopt a rational environmental point

of view is a complex and lengthy process that goes beyond the time of the onset of an environmental catastrophe. Second, there is no certainty that

the majority of the population, during a hypothetical referendum on sustainable development issues, will vote in favor of a reasonable solution

proposed by the intellectual elite, who realized the harmfulness of the path of sustainable development (Grubb, McDowall and Drummond, 2017).

Most likely, the modern democratic procedure, majority, and representative lobbying mechanisms will protect the economic interests of the majority

and not the spiritual values of environmentalists.

The anthropocentric nature of the traditional development of law is unpromising for the transition to the path of sustainable development. According

to Kwon, Jeong, and Yi (2018), legal relations should be substantially greened, gradually turning into social relations. There is a need for the legal

regulation of new social relations in the sphere of interaction between society and nature (Zavadskas et al., 2016). Thus, the environmental function

The transition of the state economy to an innovative type of development is impossible without the formation of a globally competitive national

innovation system (Rogge and Dütschke, 2018). The latter can be understood as a set of interconnected structures engaged in the production and/or

commercialization of knowledge and technologies, and a complex of economic, legal, and social institutions. They underlie the interaction of

entrepreneurial, scientific, and non-profit organizations and structures in all the areas of the economy and public life (Grubb, McDowall and

Drummond, 2017; Zavadskas et al., 2016). To create an effective national innovation system, it is necessary to increase the demand for innovations

from most sectors of the economy since currently, innovation activity is concentrated in a narrow number of sectors, and technological renewal of

production relies on technology imports rather than on developments.

It is also critical to overcoming the fragmentation of the created innovation infrastructure, since many of its elements are created, but does not

support the innovation process throughout the process of generation, commercialization, and implementation of innovations. The goal of creating a

national system for supporting innovation and technological development is a large-scale technological upgrade of production (Rogge and Dütschke,

2018). It can be based on advanced scientific and technical developments, the formation of a competitive national research and development sector

that ensures the transition of the economy to an innovative development path (Kwon, Jeong, and Yi, 2018; Pan and Ning, 2015). The formation of

According to a policy feedback theory, the current policies shape policymaking processes, serving as inputs in a systemic and cyclic procedure. Payne

and Barker (2018) mention that policies impact public members, agencies, the political elite, and other interested parties. At the public level, policies

can affect the attitudes of people regarding the role of the government and institutions or determine the level of political participation. In turn, at the

elite level, policies encourage discussions on resources, institutional capacity, and financial constraints (Hoppmann, Huenteler, and Girod, 2014). In

this connection, it is possible to assume that the feedback theory enriches the analysis of the co-evolution of policy and innovations, explaining the

ways the existing policy designs influence the future policy mixes.

The insights from the literature shed light on the dynamics of feedback, allowing the scholars and readers to consider both positive and negative

aspects. It is essential to state that the policy feedback theory is defined as a promising framework for analyzing the process where innovation and

policy mix evolve simultaneously. Quitzow (2015) points to the fact that positive feedback is more likely to induce the self-reinforcement of the so-

called virtuous cycle. The core of the identified framework examines the direction and rate of the impact made by policy mix on a socio-technical

one. The authors rationally state that the strong political commitment and proper resource allocation attracted support for innovations. Also, high-

volume house-builders were attracted by the proposals of large eco-town creation, which was regarded as a great advantage. Similar effects are noted

by Reichardt, Rogge, and Negro (2017), who emphasizes that if the actors of the market consider the transition to sustainability as an opportunity,

they are more likely to be supported. The recession of the housebuilding socio-technical system deteriorated the market conditions, which led to the

delay of projects. When the policy mix that was associated with the support of green initiatives was removed, the virtuous cycle changed to a vicious

one (Edmondson, Rogge, and Kern, 2020). For example, the standards of the area were decreased, which meant that the companies had less

encouragement to innovate their performance.

The academic literature shows that positive feedback is prone to become stable, which makes it much more difficult for firms to seek alternative

options. In this regard, one can argue that the timing of policy mix implementation plays an important role in the success of a project. Consistent with

Edmondson, Kern, and Rogge (2019), it is possible to assume that the environment is unpredictable, yet some responses can still be anticipated. The

Mukherjee, 2018). It means that there may be more than one direct path from research to the commercialization of innovation. Innovation is seen as

a logically sequential yet not necessarily continuous process, while feedback loops may occur at any of the subsequent stages. For example, market

testing of a new product may indicate a need for design refinement. If it is impossible to solve the identified problem within the framework of existing

knowledge, there is a need for additional research (Howlett and Mukherjee, 2018; Yang, Pan, and Pan, 2019). The implementation of the coupled

model of information interaction between scientific, industrial, and marketing activities allows for reducing the costs of companies.

Conclusion

In conclusion, it should be emphasized that the co-evolution of policy mix and innovation is a significant yet underexplored research area. Some

studies that are critically reviewed in this paper demonstrate the attempts to identify the links between individual policies and their impact on socio-

technical systems. The extension of the scope of analysis to policy mix, this paper discussed multiple policy effects and feedback mechanisms, thus

conceptualizing how the changes in policies impact the emergence of innovations and vice versa. The theoretical and practical implications of

understanding these impacts are associated with the contribution to fostering sustainable development. It is essential to implement the policy mix at

both local and global levels to meet high-quality planning requirements and control the integration of policies and innovations in places. The co-

The technological change that is induced by policy mix reflects the dynamics of co-evolution of innovation and policy. The article by Hoppmann,

Huenteler, and Girod (2014) provides an example of how policy learning mechanisms can support the process of policy formation. The above authors

claim that the formal institutionalization of learning procedures is more important than policy interventions. The regulatory changes influence policy

dynamics, but often, the outcomes exceed those that were anticipated by policymakers. The case of the German study in the field of solar energy

The resistance of the economy to scientific and technological innovations, the aging of fixed assets, as well as the slow decline in metal and energy

intensity promotes the debate about the problem of working not only with social but also with technical systems that determine a person’s social life.

The transition to a new approach to the development of society, science, technology, and production, dictates the need for non-monopolized

structures that are ready for rapid, clear, coherent, and economically-beneficial cooperation (Kemp, Barteková and Türkeli, 2017). It entails the

creation of vehicles that are more versatile, less costly, and environmentally friendly. The transition to a new socio-economic situation in the country

the fact that the strategic path of national development is inconceivable without an organic combination of developed democracy, sustainable

In this new quality, democracy, capable of realizing the goals of sustainable development, has several features that promote the transition to

The anthropocentric nature of the traditional development of law is unpromising for the transition to the path of sustainable development. According

to Kwon, Jeong, and Yi (2018), legal relations should be substantially greened, gradually turning into social relations. There is a need for the legal

regulation of new social relations in the sphere of interaction between society and nature (Zavadskas et al., 2016). Thus, the environmental function

of the state is to improve environmental law. The international legal documents governing the transition to sustainable development on a global scale

are not yet available. For example, the United Nations Conference on Environment and Development (UNCED) documents are advisory: there are

mere agreements signed by the heads of government and leaders of states (Kwon, Jeong, and Yi, 2018). At the present stage, legal support for the

The transition of the state economy to an innovative type of development is impossible without the formation of a globally competitive national

In terms of the policy feedback framework, positive feedback promotes steady resource flows, and negative feedback leads to the limited capacity of

policy mix to remain stable. The study by Edmondson, Rogge and Kern (2020) indicates the case of how positive feedback may turn into a negative

one. The authors rationally state that the strong political commitment and proper resource allocation attracted support for innovations. Also, high-

volume house-builders were attracted by the proposals of large eco-town creation, which was regarded as a great advantage. Similar effects are noted

by Reichardt, Rogge, and Negro (2017), who emphasizes that if the actors of the market consider the transition to sustainability as an opportunity,

they are more likely to be supported. The recession of the housebuilding socio-technical system deteriorated the market conditions, which led to the

delay of projects. When the policy mix that was associated with the support of green initiatives was removed, the virtuous cycle changed to a vicious

one (Edmondson, Rogge, and Kern, 2020). For example, the standards of the area were decreased, which meant that the companies had less

encouragement to innovate their performance.

The academic literature shows that positive feedback is prone to become stable, which makes it much more difficult for firms to seek alternative

options. In this regard, one can argue that the timing of policy mix implementation plays an important role in the success of a project. Consistent with

Edmondson, Kern, and Rogge (2019), it is possible to assume that the environment is unpredictable, yet some responses can still be anticipated. The

government reactions can drastically change the outcome of policy mixes and undermine positive effects. Accordingly, it allows for stating that the

ensure clear resource allocation and strong leadership in the field.

understanding these impacts are associated with the contribution to fostering sustainable development. It is essential to implement the policy mix at

both local and global levels to meet high-quality planning requirements and control the integration of policies and innovations in places. The co-

evolution of the policy mix and technology should be explored in terms of policy design and implementation in further studies.

Innovations and policy systems are integral parts of the economic development process that is accompanied by structural transformation. Considering

the interrelated nature of the above elements, there is a need to pay particular attention to incorporating science, technology, and innovation into

policies. Such an approach can trigger change processes and technological learning, which, in turn, determine the success of sustainable development

(Raven and Walrave, 2020; Rogge, Kern, and Howlett, 2017). A range of areas is impacted by the need to focus on the co-evolution of policy and

innovations, including health and well-being, education, clean water, life below water and on land, poverty, inequality, climate action, clean energy,

sustainable communities, as well as responsible production and consumption. Therefore, this paper focuses on the examination of the dynamics of

the joint evolution of policy and innovation.

representative of biodiversity preservation and promotion, which can be used as an example of facilitating entrepreneurship in developing countries

(Ely et al., 2013). In this connection, corporate sustainability reporting is one of the initiatives that imply a transparent and comprehensive

clarification of a firm’s solutions.

Hybrid approaches to linking policy and innovation systems emerge as the ways to ensure business sustainability. Compared to grassroots innovation

and green industrialization approaches, they are largely non-governmental and crowd-sourced in nature (Edmondson, Rogge, and Kern, 2020). The

cooperative motivations of hybrid approaches are driven by shared technologies and the intersection of local and global knowledge. Examples of

hybrids in the UK include Big Barn, the Food Assembly, Farm Drop, et cetera. It becomes evident that the identified approach has the most convincing

opportunities for transformational change across the sectors of the economy.

Speaking of policy implications, it is essential to state that their governance of co-evolving innovations is the key challenge. The hybrid approaches

require paying attention to infrastructure and network facilitation, financial issues, indigenous capabilities, and regulation. Most importantly, the

caused their iterations. In this connection, it should be stressed that the interdependencies between the mentioned systems and policies are more

important than was considered earlier. Policy learning seems to play a decisive role in inducing technological change using examining various

elements of innovation systems, even though the outcomes can be hardly anticipated. Currently, there is a lack of sufficient knowledge since the

studies mainly focus on the positive results (Kern, Rogge, and Howlett, 2019; Kivimaa and Virkamäki, 2014). For example, it is stated that by fostering

the overcoming of failure challenges, it is possible to achieve lower production costs and scale up the production.

The technological change that is induced by policy mix reflects the dynamics of co-evolution of innovation and policy. The article by Hoppmann,

Huenteler, and Girod (2014) provides an example of how policy learning mechanisms can support the process of policy formation. The above authors

claim that the formal institutionalization of learning procedures is more important than policy interventions. The regulatory changes influence policy

dynamics, but often, the outcomes exceed those that were anticipated by policymakers. The case of the German study in the field of solar energy

points to a significant technological change that was stimulated by the German feed-in tariff (FIT) scheme (Hoppmann, Huenteler, and Girod, 2014).

that

“there are no requirements to evaluate buildings post-construction, and the regulations are based on an ‘as-designed’ specification” (Edmondson,

Rogge and Kern, 2020, p. 34). The performance of buildings was associated with replacing the materials with cheaper ones and the so-called ‘value-

engineered’ elements. Consistent with Reichardt et al. (2016), Edmondson, Rogge, and Kern (2020) state that exogenous conditions impact both

socio-technical and policy mix systems.

The resistance of the economy to scientific and technological innovations, the aging of fixed assets, as well as the slow decline in metal and energy

intensity promotes the debate about the problem of working not only with social but also with technical systems that determine a person’s social life.

The transition to a new approach to the development of society, science, technology, and production, dictates the need for non-monopolized

structures that are ready for rapid, clear, coherent, and economically-beneficial cooperation (Kemp, Barteková and Türkeli, 2017). It entails the

creation of vehicles that are more versatile, less costly, and environmentally friendly. The transition to a new socio-economic situation in the country

scientifically based priorities for the development of science, technology, and production becomes a fundamental means of developing a strategy

(Greenwood, Congreve, and King, 2017). The question arises of creating a mechanism for a comprehensively managed system of society, including

technological change, which plays a leading role in socio-economic development (Greenwood, Congreve, and King, 2017; Rogge and Reichardt, 2016).

Thus, an adequate high-quality and logical-mathematical approach to the management of technical systems is required.

On the one hand, the democratization of public life makes it possible to increase the role of citizens and non-governmental organizations in preparing

important decisions in the field of nature conservation. There is no accident that it was environmental movements that were among the first to be

included in the democratic process (Lacasa and Shubbak, 2018). Reforms create prerequisites for embarking on the path of sustainable development

and allow formulating a new national idea and development strategy, which opens the way to harmonizing the interests of an individual, society, and

state. On the other hand, now the actual situation is such that the problem of environmental protection, being ten years ago one of the priority state

problems, is now tends to be on the periphery of priorities (Ma et al., 2018; Rogge and Reichardt, 2016). The authorities should finally comprehend

In this new quality, democracy, capable of realizing the goals of sustainable development, has several features that promote the transition to

sustainable development in the short- and long- term. Qualitative changes must take place in democratic procedures both at the global and national

levels. First, the democratic decision-making procedure by the majority requires a relatively long time for its implementation (Rogge and Dütschke,

2018). To convince the majority of the country’s population to consciously abandon the consumer mentality and adopt a rational environmental point

Most likely, the modern democratic procedure, majority, and representative lobbying mechanisms will protect the economic interests of the majority

The transition of the state economy to an innovative type of development is impossible without the formation of a globally competitive national

innovation system (Rogge and Dütschke, 2018). The latter can be understood as a set of interconnected structures engaged in the production and/or

commercialization of knowledge and technologies, and a complex of economic, legal, and social institutions. They underlie the interaction of

entrepreneurial, scientific, and non-profit organizations and structures in all the areas of the economy and public life (Grubb, McDowall and

Drummond, 2017; Zavadskas et al., 2016). To create an effective national innovation system, it is necessary to increase the demand for innovations

It is also critical to overcoming the fragmentation of the created innovation infrastructure, since many of its elements are created, but does not

support the innovation process throughout the process of generation, commercialization, and implementation of innovations. The goal of creating a

2018). It can be based on advanced scientific and technical developments, the formation of a competitive national research and development sector

that ensures the transition of the economy to an innovative development path (Kwon, Jeong, and Yi, 2018; Pan and Ning, 2015). The formation of

innovative behavior models should be prioritized among the population and enterprises, along with support for the policy processes and the spread

The insights from the literature shed light on the dynamics of feedback, allowing the scholars and readers to consider both positive and negative

aspects. It is essential to state that the policy feedback theory is defined as a promising framework for analyzing the process where innovation and

policy mix evolve simultaneously. Quitzow (2015) points to the fact that positive feedback is more likely to induce the self-reinforcement of the so-

called virtuous cycle. The core of the identified framework examines the direction and rate of the impact made by policy mix on a socio-technical

system. In particular, this theory clarifies the three types of feedback, including administrative, fiscal, and socio-political. In addition, importance is

given to the role of the exogenous factors, such as political, economic, and social tendencies (Edmondson, Rogge, and Kern, 2020; Quitzow, 2015). For

instance, the events that raise the attention to policy problems in combination with positive feedback increase the probability of promoting policy

alteration.