Article by Rainer Kattel: “Europe today faces no shortage of crises. From climate breakdown and geopolitical instability to social fragmentation and digital disruption, the continent is being reshaped by forces that defy easy policy responses. In this increasingly turbulent landscape, innovation is no longer a technocratic pursuit confined to boosting productivity or improving competitiveness, as the consensus of the early twenty-first century prescribed. It has become a political, economic and institutional necessity—one that demands not only new ideas but new ways of organising the public institutions that can turn those ideas into systemic change.
At the heart of this challenge lie innovation agencies. Long the workhorses of science, technology and industrial policy, these agencies—often semi-autonomous and operating at arm’s length from ministries—have traditionally focused on supporting firms, facilitating research and distributing grants. Yet over the past decade, their mandates have expanded dramatically. Now tasked with delivering missions such as decarbonising mobility, transforming food systems or building digital sovereignty, innovation agencies are being asked to operate not just as funders or intermediaries but as architects of change across complex socio-technical systems.
This shift is long overdue. In theory, Europe has embraced the logic of mission-oriented innovation. Horizon Europe, the EU’s flagship research programme, commits over €50 billion to grand societal challenges. The idea is straightforward: set ambitious, shared goals and allow national and regional actors to develop locally appropriate solutions.
But the reality on the ground is starkly different. At the EU level, implementation remains locked in rigid frameworks of compliance and administrative oversight. At the local and regional level, innovation flourishes—labs, pilots and experiments abound—but rarely scales beyond the project phase. The result is a peculiar imbalance: too much stability at the top, too much agility at the bottom and too little capacity in the middle…(More)”.
