Demand-Oriented Innovation Policy

Tasks

The goal of this project is to develop a methodological toolbox and present it to the European Commission to facilitate the evaluation of demand-oriented innovation policies according to state-of-the-art methodology. In an independent work package, ifo conducted a meta-study analysing existing evaluation studies to determine the various types of policies that are effective under certain conditions. As a basis for this study, a typology of policy measures derived from the literature was applied. Over the further course of this project, an actual demand-oriented innovation policy evaluation toolbox will be developed.     

Methodology

In accordance with the goals of the study, using scientific databases we identified methodologically sound evaluation studies of demand-oriented innovation policies, collected them in a database and summariesed them. On the basis of this, we summarised the resulting picture in a final report for various types of potential policy measures (e.g., in-frastructure investments, information campaigns, public procurment). 

Data and other sources

Literature search based on databases and the internet.

Results

Overall, there is a substantial need for further evaluations in the area of demand-oriented innovation policies. At an abstract level, there are various frictions in the innovation process that justify policy interventions. Public procurement can spur the innovation process, but its effectiveness depends on the actual procuremnet design. A potential problem is crowding out of private incentives. Similar results hold for (demand) subsitides and tax incentives. Here, a further problem arises as the plethora of available programs and instruments makes information acquisition by the intended beneficiaries an issue. In neighbouring fields of policy (health and environment) regulation has been a driver of innovative behavior by firms. With regard to the provision of information (e.g., labels) and training for consumers one is able to demonstrate short-term effects, mainly. These types of instruments can be important complements for other types of policies such as subsidies, though. Finally we emphasize the particular importance of (especially digital) infrastructure.