Changes in Danish Innovation Policy:responses to the challenges of a dynamic business environment

As in other West-European countries Danish innovation policies has undergone significant changes during the past couple of decades. Moreover, it is perhaps one of the most important changes that innovation has gained much higher focus and priorities in the overall industrial policy. It is fair to say that even if the importance of technological development has been recognised since long, then innovation has now to a much larger extent become the buzzword of Danish industrial policies. Promoting innovation through changing institutional structures and incentives is bounded by the institutional and political set-up this policy is to be implemented in. In other words, the historically rooted Danish mode of innovation provides an important trajectory for which policies that could be expected to be effective and efficient. Policy changes are, however, not only a result of previous development, because this would require that all past political decisions were made on a completely well-informed basis in a world without different political interests. In practise, governments are unable to operate without failures, political conflicts and public debates may influence decisions, and the knowledge on the nature of the innovation process has improved immensely. Furthermore, governments learn from experiences on what works and what fails. Likewise the scope for efficient policy is bounded by the national industrial structure, norms and traditions for collaboration etc. Therefore, innovation policy is a much more demanding task than simply copying successful schemes from abroad. As a result, political strategies change over time in response to all these forces. Following the argument above, to understand the development of innovation policy it is important to define the context in which is to operate, in other words, the special features of Danish innovation must be explained. This is done in section 2, following this introduction. The above-mentioned main changes in innovation policies are explained in section 3. Next, in section 4, it is discussed what are the present challenges for innovation policies. It is discussed what inspiration to these policies is, in particular to what extent academic research influence policy making. Measures to cope with these changes are exemplified in section 5. These examples are not chosen randomly but illustrate some important principles of policy making. Finally, section 6 summarises the main arguments of the paper and points to possible future policy developments.