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Public
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This page is Public
Public Policy and Governance
Public policy and governance are important shapers of innovation performance. From direct funding of education and R&D to various regulatory frameworks, public policy and governance have a significant impact on innovation activities. A full-fledged innovation policy is expected to cover a wide breadth of traditional policy domains, well beyond a narrow focus on research, to include education, tax, industry, private finance, competition, environment, among others.
A variety of rationales for policy intervention can offset various types of “failures” that characterise innovation systems. Market failures, such as appropriability problems and information asymmetries, are the most widely accepted rationale for policy intervention. In the last few decades, other rationales have emerged, including system failures, capability and resource failures, and directionality failures. While these rationales are all deserving of policy consideration, the risks of government failures always need to be taken into account before pursuing a course of policy intervention.
Following determination of policy rationales is formulation of policy objectives and from these policy instruments. Given the breadth of innovation policy, the instrument toolbox is wide. Instruments can be classified in a number of ways, including their mechanisms of action (e.g. regulation, economic incentive, etc.), the rationales or objectives they are meant to serve, and their target group. Such classifications have their limits, however, and tend to miss the important issue of policy design, which leads to much variety in the ways seemingly similar instruments are actually implemented.
Much of this variety has its roots in the context of the national, regional or sectoral innovation system being targeted, each requiring different policy designs that must take into account a unique set of public policy and governance arrangements that have evolved over time and been shaped by history. This process must consider the sorts of ideas that shape policy agendas, the administrative capabilities of government officials to formulate and oversee policy, and the openness of policy arenas. Similarly, institutional governance arrangements are diverse, with different means of coordination in different countries. Finally, the existing policy landscape—in terms of the policy mix of expectations, rationales, objectives and instruments already in place—is unique to each setting and will have consequences for the choice and design of new policies.

Country Reports
Thematic Reports

- Governance and implementation of innovation policies (The Innovation Imperative: Contributing to Productivity, Growth and Well-Being), 2015
- The Innovation Policy Mix (OECD Science, Technology and Industry Outlook 2010), 2010
- Making fundamental tax reform happen (Making Reform Happen: Lessons from OECD Countries), 2010
- Impact of Technology Foresight, 2012
- Managing our own health and well-being: Australia's personally controlled electronic health record (ICTs and the Health Sector: Towards Smarter Health and Wellness Models), 2013
What Countries are Doing
- Policy goals and means
- Rationales for policy intervention
- Policy objectives
- Policy instruments
- Block funding
- Cluster policies
- Direct funding of firms' R&D
- Innovation procurement schemes
- Specialised knowledge services
- Competitive research grants
- Grants for collaborative R&D
- Market intelligence services
- Fiscal measures
- Studentships and fellowships
- Technology matching services
- Debt and risk sharing schemes
- Innovation vouchers
- Technology extension services
- Technology platforms and fora
- Bayh-Dole and related regulation
- Research evaluation and assessment
- Science and innovation councils
- Technology diffusion assistance schemes
- Policy making contexts
- The role of measurement and evaluation in policy and governance
- Strategy and policy coherence
- Institutional governance