Place-based allocation of R&D funding: Directing the German innovation system for hydrogen technologies in space

Abstract

The geographical understanding of directionality in the literature on mission-oriented innovation systems is still underdeveloped. Therefore, this article reflects on whether the allocation of funding for R&D activities to different places can direct innovation systems in space. A place-based approach to the allocation of funding and its effects on innovation systems is developed to analyze how the German national government allocates funding to the national innovation system for hydrogen technologies. The results show that the allocation of funding considers place-based characteristics and has a range of systemic outcomes, encompassing the clustering of research activities, the specialization of certain places in certain market segments, and the increase of the spatial reach of the national innovation system by integrating left behind places. However, the funding contributes insufficiently to market formation at the local and regional scale, and is contested due to existing alternative routes that the innovation system could take.