Transformative innovation and socio-technical transitions to address grand challenges

• Author: Frank Geels, University of Manchester
• Pages: 573-607

TRANSFORMATIVE

INNOVATION AND

SOCIO-TECHNICAL

TRANSITIONS TO

ADDRESS GRAND

CHALLENGES

Frank W. Geels

Professor of System Innovation and Sustainability,

Alliance Manchester Business School, University of Manchester

574

1. Introduction

1.1 Grand challenges in a policy

context: climate change, SDGs,

and economic growth

Transformative innovation and systemic

transitions are attracting increasing attention

in the context of three policy problems. First,

addressing climate change will require radical

innovation and low-carbon transition in many

systems, as the Commission’s recent climate

strategy recognises: ‘The transition to a net-

zero greenhouse gas emission economy by

mid-century will radically transform our energy

system, land and agriculture sector, modernise

our industrial fabric and our transport systems

and cities’ (EC, 2018a: 6).

Second, addressing other grand societal

challenges (such as ageing, obesity, energy

security, urban quality of life, and inequality)

and the Sustainable Development Goals

(SDGs) will require transformative innovations

in health care, agro-food and urban systems,

as Vice-Presidents Timmermans and Katainen

note in the foreword to the Commission’s recent

Ref‌lections Paper: ‘Sustainable development

means that we need to modernise our

economy to embrace sustainable consumption

and production patterns, to correct the

imbalances in our food system, and to our

mobility, the way we produce and use energy,

and design our buildings on to a sustainable

path’ (EC, 2019: 3).

Third, low-carbon and sustainability transitions

of‌fer attractive growth prospects, as the

Commission’s expert group on green growth

and jobs concludes: ‘There is a huge competitive

opportunity for Europe to ride this ‘green’

trajectory and turn environmental problems

into solutions for promoting investment and

jobs. Such a green direction implies the use of

technological capacities (which the EU has) in

order to drastically increase the productivity of

Summary

The aim of the chapter is to present the

role of transformative innovation as a new

paradigm to address many of the most

pressing societal challenges we are facing,

notably transition to sustainability and

combatting climate change. It elaborates on

what it means for research and innovation

(R&I) policy and attempts to ‘operationalise’

these transitions.

This chapter presents a broader conceptual

model to benef‌it policies for transformative

innovation and grand challenges that goes

beyond the linear model and innovation

system approaches. The new role for R&I is

to support socio-economic transformations,

but it needs to be complemented with other

policies to have a stronger impact. Aer

introducing the socio-technical transitions

and potential barriers for the uptake of

these niche innovations, the f‌inal analytical

section gives several examples where these

transformations have taken place, in both

energy and mobility. The chapter closes with

an extensive overview of policy conclusions.

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CHAPTER 9

Figure 9-1 Three frames in innovation policy

Framing Key features Policy rationale Policy approaches

(examples)

Science and

technology for

growth (since 1950s)

Linear innovation model,

driven by R&D (research

and development)

Addressing market

failures (f‌irms invest

insuf‌f‌iciently in R&D

because of public good

character of innovation)

State f‌inancing

of R&D; subsidies

or tax incentives for

business R&D

National and sectoral

systems of innovation

for improved

competitiveness

(since 1980s)

Focus on knowledge

f‌lows between upstream

actors (universities,

f‌irms, agencies)

Responding to system

failures, e.g. improving

linkages between

actors, addressing

institutional problems

(in laws, property rights,

regulations)

Promoting science

hubs and science-

industry collaboration;

education and training;

cluster policies

Transformative

change to address

grand challenges

(since 2010s)

Nurture radical

innovation and new

pathways; shape

directionality of

innovation

Promote system

transformation,

which incumbent

actors are slow or

reluctant to do

Missions and goals

(SDGs, climate targets),

assisting new entrants,

creating transformative

coalitions, learning,

experimentation

Science, research and innovation performance of the EU 2020

Source: Author's elaboration based on Schot and Steinmueller, 2018

Stat. link: https://ec.europa.eu/info/sites/info/f‌iles/srip/2020/partii/chapter9/f‌igure_9-1.xlsx

energy and material resources (which the EU

only has in limited quantities). The markets of

the future are bound to grow in that direction’

(EC, 2016: 11). But to exploit and compete

globally in this area, radical innovation should

be nurtured: ‘Europe is relatively strong in

adding or sustaining value for existing products,

services and processes, known as incremental

innovation. (…) But Europe needs to do better

at generating disruptive and breakthrough

innovations’ (EC, 2018b: 11).

1.2 Analytical challenges for

innovation policy

Transformative innovation and systemic transi-

tions pose analytical challenges for innovation

policy that come in addition to traditional chal-

lenges. Schot and Steinmueller (2018) distinguish

three frames for innovation policy, which

respectively focus on stimulating R&D, improv-

ing knowledge f‌lows in innovation systems, and

stimulating transformation (Figure 9-1).