themes – Insight Foresight Institute

Transformative governance of innovation ecosystems

The CEO of IFI, Totti Könnölä publishes with Aalto University professors in a leading research journal ‘Technological Forecasting and Social Change’ a paper on transformative governance of innovation ecosystems.

New lens for policy and management

The framework of transformative governance developed in the paper, offers a powerful new lens for policy and management contexts which are characterised by complexity and uncertainty, both within vertical policies (e.g. research, energy, mobility or health) as much as within more horizontal policies (e.g. entrepreneurship or innovation).

Apart from designing of specific policy measures, the framework can be harnessed for shaping the general conditions of transformative innovation policy and associated governance structures, for instance by overcoming bottlenecks related to both innovation and entrepreneurial ecosystems. Furthermore, it can be used for assessing and designing policy mixes to support the development of innovation ecosystems into desired directions. In fact, we look for new collaborations to apply this framework in policy/management analysis and the design of new measures.

Transformative innovation policy

The paper addresses transformative innovation policy, which has recently emerged at the intersection of innovation and socio-technical transition research. It has provided valuable heuristics to guide policy; but it has also led to the recognition of major challenges in the management of uncertainty and complexity.

Traditional policy responses to control markets have become a source of inertia and a point of vulnerability addressing challenges associated with digital platforms, financial crises and the covid-19 pandemic as well.

In this paper, we address these challenges by linking transformative innovation policy with research perspectives from (i) complex adaptive systems, (ii) ecosystems, and (iii) adaptive and participatory governance. Specifically, we develop a conceptual framework for transformative governance.

Transformative governance

Ecosystems tend to evolve towards excessive concentration of power and techno-institutional lock-ins, on the one hand, or the dissolution of the ecosystem to fragmented and chaotic markets, on the other. To address this challenge, we develop transformative governance.

Transformative governance seeks to improve the adaptiveness and resilience of the ecosystem and orchestrates socio-technical transformation based on the balanced presence of diversity, connectivity, polycentricity, redundancy and directionality.

In effect, the framework help design and assess policy measures which exhibit the desired five features in the three succession stages, thereby fostering more balanced ecosystem development.

Case study on emerging mobility ecosystem

We present an illustrative example by applying the framework to a Finnish policy reform in which the lack of balanced attention to the ecosystem features catalysed major shortcomings in an emerging innovation mobility ecosystem. Finally, we explore the implications for the design of individual policies and policy mixes that arise from the recognition of the complexity and the holistic policy impacts on the ecosystem and society at large.

The paper results from the international Platform Value Now project, funded by Finland’s Strategic Research Council focusing on understanding the fast-emerging platform ecosystems, their value creation dynamics and requirements of the supportive institutional environment.

This paper is available here to download free of charge. For more information contact Totti Könnölä.

Könnölä et al. Transformative governance of innovation ecosystems

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Towards smart circular economy; the role of digitalisation

The Digital Development and Society Forum of the Spain Digital Foundation supported by the Insight Foresight Institute (IFI) has prepared a dossier in Spanish entitled “Towards the Intelligent Circular Economy; the role of digitization” tries to contribute ideas proposing to take advantage of the potential of digitization to change the model of the current linear economy towards the new system of Circular Economy.

As indicated in the document, its objective is to explain the connection between digitization and the Circular Economy as well as to suggest actions that can accelerate the implementation of this new economic model. The series of specific objectives can be summarized:

Define the role of digitization on the road to the Circular Economy
Identify digital application areas to promote the Circular Economy
Suggest actions to digitize the economy towards circular models.

The dossier specifies some of the challenges to be faced in the search for this particular type of economy and identifies a series of barriers that must be taken into account, classified into three main groups:

Organizational and cultural (eg lack of talent or rejection of open innovation)
Legal and tax (eg confidentiality protection, tariff logic)
Technological (eg interoperability difficulties)

As an example of the capabilities of digitization to accelerate the transition to a Circular Economy, the main axes included in the Spanish Circular Economy Strategy are detailed; Spain Circular 2030 presenting three hypothetical cases applicable to some of them, specifically in the productive sectors of transport (urban eMobility), agri-food and tourism.

After the conclusions highlighting the fundamental role of digitization, the dossier ends by proposing lines of action to promote its role in the Circular Economy.

The Spain Digital Foundation publishes this dossier in support and collaboration towards the full implementation of the new Circular Economy system. This proposal acquires special importance at present as evidenced by the approval by the Council of Ministers of Spain, on June 2, 2020, of the aforementioned Spanish Circular Economy Strategy EEEC; Spain Circular 2030.

Download free the report (in Spanish):

Hacia la economía circular inteligente; el papel de la digitalización

Towards the smart and circular economy

CEO of Insight Foresight Institute, Totti Könnölä, writes in the Telos Magazine on the role of digitalization in circular economy. Digitalization can significantly reduce emission levels and the polluting impact of human activity on the environment.

The economic model that society has lived up to now is the linear one that follows the sequence: extract – manufacture – use – throw away and that requires large amounts of cheap and easily accessible energy and other resources, with evident negative environmental consequences. The consumption of these resources is reaching the limit of its physical capacity. Luckily companies are increasingly looking for win-win solutions providing simultaneously greater business competitiveness and a better environmental results.

An alternative that has more and more advocates is the so-called Circular Economy, based on the following three principles:

design to reduce waste and pollution;
keep equipment and materials in use longer ; and
regenerate natural systems.

Applying these three principles involves changing value chains and of business models, which makes it possible to transform the entire economy toward a new paradigm, a more sustainable system.

This concept is capturing interest from both companies and policy makers. In line with the ‘The New European Green Deal’, the European Commission adopts an EU industrial strategy to tackle the double challenge of green and digital transformation. The goal is to harness the potential of digital transformation, which is a key enabler to achieve the goals of the Green Deal. Also in Spain, the Government has elaborated the strategy to promote the transition to the Circular Economy. Including this article results from the debate organized by the Foundation Spain Digital indicating among other initiatives real and growing interest in circular economy.

More information

Download the article in Spanish (free)

Access to the full issue of the Telos including this article.

Task force to address water scarcity in Southern Europe

The CEO of Insight Foresight Institute, Totti Könnölä, participates in the task force of EIT-KICs (Climate-KIC, EIT Food, EIT Manufacturing, EIT RawMaterials). This Body of Knowledge works on finding innovative solutions for water scarcity in Southern Europe.

Water plays a central role in how societies mitigate and adapt to the effects of climate change. A holistic approach considering water, the biosphere, and the anthroposphere is required to provide sustainable agricultural and economic systems that will allow us to decelerate climate change, protect us from extreme events and adapt to the unavoidable at the same time.

Main problems to tackle:

mitigating water scarcity and drought situations,
reducing the over usage of water,
wasting less water with the existing resources

In order to have a wide representation of knowledge, representatives from different sectors, including policy, industry, civil society and research and innovation participate in the process to support in the knowledge sharing and through innovation across the South of Europe.

Advise to Andalusia in the industrial transition towards carbon neutrality

The CEO of IFI, Totti Könnölä advises the Joint Research Centre of the European Commission in its work to support the Andalusian Government to create industrial transition towards carbon neutrality. Within the frame of the project RIS3 Support to Lagging Regions, the JRC has launched a Working Group on Understanding and Managing Industrial Transitions.

The Working Group aims to support regional (and where appropriate national) authorities facing major industrial transitions, away from declining sectors and activities and charting actionable paths towards employment-intensive economic growth. The Working Group comprises of JRC staff, an Advisory Board and external experts engaged in reviews of industrial transition, coordinated by Ken Guy (Advisory Board Member of IFI).

The core activity of the Working Group are the reviews of industrial transition following a common methodology (POINT, Projecting Opportunities for INdustrial Transition) that draws on expertise on system innovation/transition management, foresight, industrial policy and innovation governance.

The reviews focus on an industrial theme of growing global importance suggested by the relevant territorial authorities (for instance, but not confined to: climate change, electrification of transport, circular economy, digitalisation, artificial intelligence) to collect evidence and examine the scope for developing adequate territorial responses that harness cross-portfolio complementarities (e.g. between ministries and between levels of governance) and cross-stakeholder coordination (e.g. between businesses and broad constituencies of consumers/users). In each territory under review and for an industrial theme suggested by the authorities the final report will:

(a) Map the affected orientation, resource mobilisation, production and consumption systems in the territory;

(b) Document existing planning arrangements and directions of deliberate change (e.g. as described in thematic policy and business strategies, or evident in momentum-gathering social concerns and movements, consumer trends, common territorial values etc.) of various stakeholders in the affected systems that could later form the basis for a broadly-supported transition vision;

(c) Make concrete suggestions for the advancement of the transition and for managing its downsides. Given the nature and magnitude of the transition challenge, adequate territorial responses will include not just research and innovation policies that are already part of RIS3, but also industrial and employment policies more generally, including provisions for education and skills, for complementary large public infrastructures (e.g. in energy, transport, waste), urban planning, fiscal policy and social security reform, among others. Therefore the recommendations of the review will place a particular emphasis on fostering alignment and coordination within government.

The reviews aim to build the evidence base for appropriate “Actions to Manage Industrial Transitions”, as stipulated in fulfilment criterion No.6 of the enabling condition of good governance foreseen in the next multi-annual financing period of the EU Structural Funds (without prejudice to the final decision of the European Commission). The reviews can further inform RIS3 design and implementation (e.g. refining or extending priorities, broadening the EDP, fostering synergies with other funding streams) as well as informing, and been informed by, industrial policies and other territorial strategies for economic and social development. More broadly, it is hoped that the reviews can be an input to a participatory process of stakeholder engagement leading to the development of credible positive visions for the future that can be the source of pride and inspiration for the region (or country) and a rallying point for the mobilisation of actors and resources from all levels.

The JRC plans to complete three such reviews (Andalucía, Bulgaria and Greece) in the current phase of the project in 2020.

For more information

Working Group on Understanding and Managing Industrial Transitions