Variations in innovation strategies for sustainable development: Sustainable innovation policy instrument mixes of ten small OECD countries across five sectors

Abstract

Innovation plays an inevitable role in transforming our current modes of production and consumption towards sustainable development. Yet it is unclear what strategies and policy instruments different governments have been using to support innovation for sustainable development. To address these gaps, we provide the first comprehensive multi-sectoral (agriculture, water, health, energy, and manufacturing) and multi-country (10 smaller developed and innovative countries) analysis. We synthesized a novel dataset of 1722 sustainable innovation policy interventions (2008–2020) and used correspondence analysis to identify the different government strategies. The strategy characteristic of the Nordic countries with high government R&D spending and mostly coordinated market economies tends to support targeted R&D funding and market creation (e.g., public private partnerships, international technology transfer, demonstration projects). This is in contrast with the strategies of Israel and New Zealand focusing on firm innovation through direct economic tools (e.g., incubators, venture capital support) and Switzerland creating an enabling environment for innovation (e.g., clusters, networks, science & technology parks, basic research, public research centers, regulations), all three countries being characteristic of liberal market economies. The empirical data also revealed that there are three policy areas that are relatively underrepresented that merit additional research as potentially hindering sustainable innovation.