Who bears the risk of innovation failure?

Innovation is all about novelty, about charting new territory and sailing unknown waters. This implies that the outcome of any innovative endeavour is by no means certain, let alone predetermined. On the contrary, innovation clearly entails risk, and in fact two different types of risk: one is for the innovator, the other for the society he's working in. With only mild exaggeration, you might consider the first the risk of innovation failure, whereas the other is the risk of innovation success.

Why innovation policy fails …

Often times, the theory is one thing, and its application is something entirely different. Innovation policy is no exception, so that the transfer of conceptual ideas into practice is fraught with unpleasant surprise. I'd suggest two specific challenges to successful policy making in support of innovation: one is related to integrity, the other to competition.

On the unintended consequences of innovation policy …

My appreciation for Ian Morris and his big thinking has been woven into this blog already at a very early stage. He has his finger on the pulse of society's fundamental challenges; his "paradox of development" eloquently paraphrases society's eternal quest for innovation, while pointing out that any solution can only be temporary.

How innovation policy can embrace novelty …

Innovation policy is a complex composition of tools that influence the innovation capacity and success of a society. This set of policies usually does not cover the entire innovation landscape, but leaves the fringes of the landscape unattended. Today, I'll first focus on innovation policy that embraces novelty, i.e., policy objectives especially tailored to novel supply and novel demand. I consider this a forward looking innovation policy.

Why innovation policy must be innovative

About a year ago I came across the work of the historian and archaeologist Ian Morris, who observed that "change is caused by lazy, greedy, frightened people looking for easier, more profitable, and safer ways of doing things". This Morris Theorem essentially presents human sloth, greed, and fear as the key drivers for our society's appetite for change – change of our environment to our own benefit. That is what we call innovation: the purpose is an easier, richer, safer life for all of us.