Advisory Report 35: Transformative Innovation Policy: A governance framework for Flanders

The world is facing urgent and interconnected societal challenges that require fundamental change, such as the climate crisis, the nitrogen crisis or the health crisis (including pandemics, obesity, dementia). In its Advisory Report 35, VARIO focuses on Transformative Innovation Policy. This 3rd generation innovation policy plays a crucial role in system change or system transitions. Consider, for instance, the transition to a circular economy or to a digital and circular agri-food system. Transformative Innovation Policy addresses what is called transition failures. Transition failure occurs when structural resistance - such as restrictive legislation, taxation or market power of established players - prevents a fundamental change of direction.

Transformative Innovation Policy arises from different policy traditions and includes five characteristics:

1) Focus on societal challenges and inclusive growth

2) Indicating a clear direction

3) A coherent, directive set of policy interventions

4) Involving multiple actors and global networks

5) Multi-level governance

Based on a country review in collaboration with the Dutch AWTI (December 2023) and a separate background report, VARIO developed a participatory governance framework for Transformative Innovation Policy for the Flemish Government, together with 8 recommendations:

• Recommendation 1: Work on a stronger link between innovation and transition policy
• Recommendation 2: Create an updated, guiding compass for transitions
  • Recommendation 2.1.: Make the spearhead clusters more transformation-oriented
  • Recommendation 2.2.: Also make the Strategic Research Centres (SOCs) more transformation-oriented
• Recommendation 3: Strengthen policy-oriented knowledge and analysis capacity for transitions
• Recommendation 4: Work towards a coherent policy mix that provides direction
• Recommendation 5: Involve all relevant stakeholders with more attention to pioneers
  • Recommendation 5.1.: Strengthen the international link
• Recommendation 6: Ensure overarching and directional steering
• Recommendation 7: Provide strong and dynamic professional project management
• Recommendation 8: Create a performing participatory governance framework