At IGL we have long been interested in the question of what innovation agencies do, and how they can successfully drive innovation, entrepreneurship and productivity within their societies and economies. Over the past few years we have explored this topic in depth, building on earlier Nesta research that looked at the different roles and approaches taken by innovation agencies around the world.
A snapshot of innovation agencies now
In 2021 and 2022, we partnered with the TAFTIE network of European innovation agencies and the RELAI network in Latin America to compare the characteristics of their members - nearly 50 agencies in total. This involved conducting surveys, in-depth interviews and workshops to gather information about their organisational structures, activities, skills and approaches to learning and evaluation. Our aim was to build a picture of the varied roles that these organisations currently play within their innovation systems, and to explore how these might change in the future.
We observed a number of context-specific differences between agencies based in these two regions. For example, all members of the RELAI network operate on a single year budget cycle, which puts significant pressure on their ability to plan and deliver long-term strategies. However, these constraints have led some agencies to diversify their funding models to include other fee-based services - a development that we saw less evidence of in TAFTIE agencies that have more predictable sources of income. TAFTIE agencies meanwhile, are much more internationally oriented than their Latin American counterparts, with many having one or more offices in other countries, and responsibilities for promoting trade and exports in addition to their roles in stimulating research, innovation and entrepreneurship at the national level.
The research also highlighted many similarities between innovation agencies worldwide, especially in terms of the roles they play in their respective innovation ecosystems, and the types of support they give to innovators. For example, we found that SMEs were the types of entities most likely to receive support across agencies in both networks, and financial grants were the most used support instrument. However, TAFTIE agencies are more likely to provide business advisory services, support for clusters and networks for innovation, and innovation vouchers than their RELAI counterparts, while a higher proportion of RELAI agencies provide early stage support for innovative ventures as well as technology adoption and generation services. You can read more about the specific findings from the research with each network in individual reports on TAFTIE and RELAI, and in a comparative report that brings together a set of cross-cutting insights.
Looking ahead to the future
Our research highlighted a number of common challenges facing innovation agencies now and in the future, which will require them to rethink how they operate. With each of these challenges come opportunities to develop new capabilities and strengths:
- Navigating uncertainty through anticipation and foresight
Effective strategic planning is hindered by increasingly turbulent and volatile global conditions, which make it hard to anticipate what kind of innovation support might be needed in the medium to long-term. This can be mitigated by an increased use of strategic foresight methods, such as speculative design or scenarios. By raising ‘what if’ questions that are both tangible and stretching, innovation agencies can equip themselves to consider a range of plausible futures that usefully test their assumptions and help them prepare for alternative directions of travel.
- Clarifying roles through developing an understanding of self and system
Innovation agencies operate in complex ecosystems, and can sometimes find themselves in competition with other actors for influence and resources. To create space for useful collaboration, agencies must regularly gather data to help them reflect on their structure, responsibilities, instruments and activities, skills and capabilities, and learning and evaluation practices. These can be used as the basis for cross-ecosystem discussions to ensure that different players are clear on where they can add most value, and what they might need to start or stop doing in order to fill gaps or prevent duplication of efforts.
- Creating autonomy through becoming more entrepreneurial
Many innovation agencies are ‘rule takers’, with their priorities set (and frequently reset) in response to political and economic shifts. This can limit their ability to usefully influence the decisions taken by governments about how best to support innovators. Seeking diverse sources of income and experimenting with non-traditional institutional models can help agencies to build their autonomy and agency. Examples of this might include forming public-private partnerships or seeking funding from international organisations like the European Commission or the Inter-American Development Bank.
- Focusing support through taking an innovator-centric approach
The way in which an agency understands the nature of innovation determines the kind of support it provides (ranging from early stage investment in research and development through to support for commercialisation and upgrading firm-level capabilities). Agencies need to be clear on what inputs are most required in their specific system, and tailor their support to the needs of different types of innovators.
- Staying agile through building an experimental culture
Maintaining the right mix of skills and capabilities is a challenge for all innovation agencies. This highlights the importance of continually auditing existing skills and identifying emerging needs, and then investing in developing the capabilities to meet them. Building expertise and skills in data science and innovation mapping, as well as evaluation and experimentation can help innovation agencies stay agile and deliver effective programmes and policies that can respond to dynamic futures.
Given IGL’s focus on making innovation, entrepreneurship and growth policy more experimental and evidence-based, it is exciting to see the growing emphasis for almost all agencies on evaluation and learning. We look forward to building on this research and future collaborations with TAFTIE and RELAI agencies to help them develop their capabilities in this area.
This is part of a series of blogs we have written to share insights from our research. Do reach out if you’d like to find out more.