Policy learning and innovation theory: an interactive and co-evolving process

This paper explores links between the development of innovation theory since the late 1970s, and the evolution of innovation policy ideas, primarily in the 1990s. The argument is that there is a close connection between theory and policy, so that theory and policy learning can be seen as an integrated, co-evolving and interactive process. We analyse the theory-policy learning link in terms of two phases. We suggest that the complex economic crisis of the 1970s created an opening for rival analyses of events. During the 1980s, the development of evolutionary theories (pioneered by Nelson and Winter) and of empirically-based theories of the innovation process (pioneered by Nathan Rosenberg) created a framework in which policy agencies could consider heterodox ideas concerning objectives and instruments of public policy. By the early 1990s policy-makers, particularly in Europe, came to see RTD and innovation policies not just as important arenas of action in themselves, but as instruments towards more wide ranging policy objectives. The policy agencies involved, though hierarchical, were characterised by relatively open structures that permitted a degree of intellectual diversity: so organisations like the OECD and the European Commission played a central role, whereas the World Bank, for example, did not. Increasing policy interest stimulated a second phase of research in the 1990s, sponsored both nationally and by various EU programmes, in which expanding the innovation-oriented knowledge base became a significant objective for policy-makers. The paper argues that the theory-policy link has been central to the intellectual development of this field, which would have been impossible within the constraints of existing disciplinary structures and university funding systems. At the same time the analytical achievements have permitted a wide expansion in the conceptualization of policy targets and in the design of instruments available to policy-makers. In a sense, this is itself an evolutionary story: of a crisis and a conjunctural niche that permitted the creation and (so far) survival of a set of diverse and certainly non-conventional ideas