Innovation Policy and Governance in High-Tech Industries

Different sub-disciplines of the social sciences analyse the evolution and diffusion of technical innovations from an institutional perspective. Important contributions are provided by socio-economic studies of national systems of innovation, by politico-economic research on the varieties of capitalism, and by the sociology of technology. These studies often start from rather simple distinctions between types of technical innovations (e.g., radical versus incremental) which they usually do not elaborate on. Also, most of them neglect that particularly large and complex technical systems require specific institutional provisions for their functioning. Such “black-boxing” of technology by and large facilitates detecting generalisable relations between institutional constellations and technical innovations. But a more sophisticated analysis of the relationship between institutions and technical innovations needs more precise concepts of both technology and institutions, and it must dismiss the prevailing institutional determinism. Processes of technical and institutional innovations are characterised by co-evolution, interaction and mutual adjustment.

A promising theoretical perspective on the construction of order and change in the evolution of Large Technical Systems (LTS) is offered by ecological approaches in the social sciences. In a multitude of variations, they apply one or more “ecosystem” ideas and related concepts to change and adaptation of social and technical systems. Ecologically inspired models put emphasis on: (1) the dynamic interdependencies and interactions between diverse actors; (2) the multiplicity of relations between the components and outcomes of these systems; and (3) the existence of multiple and relatively autonomous layers and levels in such systems, along with the emergent relations between these levels. In the social sciences, most of these approaches have been developed in the sociology of organizations (population ecology of organizations; organizational ecology). In the political sciences, approaches from this ecological perspective have been applied to understanding the development of local communities, policy sectors, and interest group systems. An under-exploited variant of this perspective is the concept of an “ecology of games”, which emphasizes the complexity of nested (public and private) decision-making processes in the context of tight social and technical interdependencies and related conflicts. This paper describes the foundations of the “ecology of games” as a framework for the study of large technical systems in the communications and information technology sector, and explores its explanatory value to a collection of case studies.

This chapter aims at a conceptual clarification of mass media’s influence on high-tech policy decisions. It deals with two major questions: (1) Do the mass media matter for innovation policy and thus also for high-tech policy? (2) Are the media interested in high-tech policy as a central field in innovation policy? The questions are answered theoretically in the following steps: First, it is argued that the mass media play an important role as actors in innovation systems and therefore are also relevant for high-tech policy decisions. The argument focuses on three different perspectives: processes, functions and structures in innovation systems. Second, factors influencing the activity level of media discourse are drawn from agenda-building and news selection theories. News values of innovation policy and high technologies are identified as important preconditions for the activity level of media discourse. The chapter concludes with proposing a theoretical framework integrating the interplaying factors.

America continues to be ranked among the most innovative high-tech economies but has historically lacked an integrated high-tech policy. One of the distinct features of the U.S. approach was the coexistence of many government measures – including massive military procurement – that promoted innovation and technology. Another driving force behind the historical dynamism of the U.S. high-tech economy is the country’s culture of entrepreneurship and risk-taking. A more encompassing approach was introduced in 2009, when the Obama Administration released a Strategy for American Innovation. This initiative contains many provisions that are relevant for high-tech industries. After a general discussion, the chapter focuses on the information and communication technology (ICT) sector, which illustrates the relevant features of the U.S. innovation system and of the recent initiatives. ICT reveals the complexity of aligning measures in interrelated areas in order to design a coherent system of policies and reflects the challenges that need to be overcome by present and future public sector initiatives.

Switzerland consistently holds a leading position in international comparisons of innovation performance. Historical, economic, and political circumstances have shaped the country’s unique innovation system. This chapter analyses the main features, strengths, and weaknesses, as well as the reasons for the high innovativeness of the Swiss economy. The nation’s liberal concept of innovation policy is characterised and examined for consistency across main policy areas. Recent and future controversial aspects of Swiss innovation policy are discussed, and changes in innovation policy that might become necessary are explored. The chapter also discusses threats to the country’s uniqueness and the particular innovation policy profile, the likelihood of inconsistencies within the principles of Swiss innovation policy, and factors that might weaken future innovation performance.

As part of the High-Tech Strategy for Germany, the German Federal Government established the Council for Innovation and Growth (CIG) and the Industry-Science Research Alliance (ISA). Besides consulting with the government, these advisory bodies were designed to improve connectivity between industry, science, and politics. A systemic approach suggests that the bodies should preferably be staffed with representatives of various economic sectors and different societal subsystems to enhance the integration of the innovation system and to assure a balance of interests within the advisory boards. Based on an analysis of interlocking directorates that allows the operationalisation of relations between organisations, this chapter explores whether these criteria have been met in the constitutions of the two advisory bodies. Results indicate a preponderance of certain economic interests in the network. Furthermore, numerous links beyond CIG and ISA exist among the organisations participating in the three subsystems, which weaken the significance of the integrating function of CIG and ISA.

This chapter explores the status of the space sector in the German High-Tech Strategy and outlines an explanation of the strategy paper’s orientation towards large scale technological systems. By integrating multiple explanatory levels – national bureaucratic politics, Europeanization of space policy, and global competition and security aspects – the study shows how policy choices emerge from complex actor constellations. It concludes that the concentration on large technological systems is still a major focus of German research and innovation policy.

Wind Energy is increasingly recognised as a sustainable, alternative energy source that could contribute to the solving of a range of environmental problems, but with a potential that has not yet been fully exploited. Several factors account for the opportunities found in this sector and the barriers to their utilization. This chapter focuses on the agenda-setting powers and the capacity for building new innovation systems in the area of wind technology, and analyzes three groups of actors whose efforts and relations will be decisive for the further development of this sector. Nation states and relevant international organizations, businesses in support of and in opposition to wind energy, and various civil society organisations with an interest in sustainable energy are discussed. Environmental groups are usually very critical of specific industries, although these groups also can contribute to the further advancement of business. All actors are related to the national and global innovation systems in which they participate.

In the debate on Varieties of Capitalism (VoC), different types of capitalism are linked with distinctive economic strengths, specific modes of policy making and implementation. Observers in the 1980s and 1990s believed that the U.S. market possessed ideal characteristics to develop into a lead market for photovoltaics (PV), mimicking the country’s lead in other high tech areas. This chapter establishes linkages between the VoC debate and discussions in innovation research to propose a definition for radical innovations. An analysis of developments in PV indicates a clear German advantage. The bulk of the chapter identifies the mechanisms of concerted action that enabled rather than prevented (as VoC theory would predict) this radical innovation in the German case. The chapter closes with possible generalisations of the argument based on other sectors and countries.

The electronic health card is the largest information technology project in Germany to date. It is part of the German High-Tech Strategy. This study examines the major players that are responsible for the implementation of the project. The major argument is derived from an analysis of the German system of innovation in which the state can be considered as initiator of general innovation policy in Germany. Yet it does not take on this role in the implementation of the electronic health data card. Rather, the structural configuration resembles a macro-corporatist network, in which the Department of Health is the most influential actor that works together with private and societal organizations. In order to reach conclusive results the reputation and network centrality of the actors in question were examined and visualised using methods derived from social network analysis.

This chapter investigates the impact of embryo research laws on the innovative ability of national economies. Based on a quantitative comparison of embryo research laws and biotechnology patents in 21 industrialised Western countries, this chapter makes three arguments. First, we observe a clear trend: Stem cell research has incited a wave of liberalizations of embryo research laws. Second, this trend is not universal. We notice a considerable variation in embryo research laws. This pattern can be explained by the interaction of partisan and societal actors. Third, the variation of embryo research laws is not directly related to the innovative ability of national economies. Permissive embryo research laws are not necessarily associated with an innovative biotechnology sector. The innovativeness often is an unintended consequence, rather than the result, of a political strategy. These results caution against simple theses about the impact of regulation on innovativeness. Impacts of embryo research laws on the innovative ability of the biotech sector will be visible only in the long-term.

The increasing complexity of technology and of actor constellations raises daunting challenges for high-tech policy. This chapter recaps the main insights from the contributions to this book and draws lessons for public policy. The congruence of technology and policy, flexible coordination, product diversity, multiplicity of efforts and institutional arrangements, facilitation of adoption, experimentation, and international coordination are key aspects of forward-looking efforts to support innovation in advanced technology industries.