How innovation agencies work

Kirsten Bound and Alex Glennie at NESTA: “This report considers how governments can get better at designing and running innovation agencies, drawing on examples from around the world.

Key findings

  • There is no single model for a ‘successful’ innovation agency.  Although there is much to learn from other countries about best practice in institution and programme design, attempts to directly replicate organisational models that operate in very different contexts are likely to fail.
  • There are a variety of roles that innovation agencies can play. From our case studies, we have identified a number of different approaches that an innovation agency might take, depending on the specific nature of a country’s innovation system, the priorities of policymakers, and available resources.
  • Innovation agencies need a clear mission, but an ability to adapt and experiment. Working towards many different objectives at once or constantly changing strategic direction can make it difficult for an innovation agency to deliver impactful innovation support for businesses. However, a long-term vision of what success looks like should not prevent innovation agencies from experimenting with new approaches, and responding to new needs and opportunities.
  • Innovation agencies should be assessed both quantitatively and qualitatively. Evaluations tend to focus on the financial return they generate, but our research suggests that more effort needs to be put into assessing some of the more qualitative aspects of their role, including the quality of their management, their ability to take (and learn from) strategic risks, and the skill with which they design and implement their programmes.
  • Governments should be both ambitious and realistic about what they expect an innovation agency to achieve. An innovation agency’s role will inevitably be affected by shifts in government priorities. Understanding how innovation agencies shape (and are shaped by) the broader political environment around innovation is a necessary part of ensuring that they are able to deliver on their potential.

Governments around the world are looking for ways to nurture innovative businesses, as a way of solving some of their most urgent economic and societal challenges. Many seek to do this by setting up national innovation agencies: institutions that provide financial and other support to catalyse or drive private sector innovation. Yet we still know relatively little about the range of approaches that these agencies take, what programmes and instruments are likely to work best in a given context, and how to assess their long-term impact.

We have been investigating these questions by studying a diverse group selection of innovation agencies in ten different countries. Our aim has been to improve understanding of the range of existing institutional models and to learn more about their design, evolution and effectiveness. In doing so, we have developed a broad framework to help policymakers think about the set of choices and options they face in the design and management of an innovation agency….(More)”