sectoral innovation foresight• highlight key policy issues for the future, with a view to...

Sectoral Innovation Foresight Introduction

Interim Report

Matthias Weber (AIT Austrian Institute of Technology) Petra Schaper-Rinkel (AIT Austrian Institute of Technology) Maurits Butter (TNO)

July 2009

A Europe INNOVA Initiative

2008-2010

This publication is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises.

Europe INNOVA Sectoral Innovation Watch

Table of contents Foreword...................................................................................................................................... 1 1 Introduction ......................................................................................................................... 2 1.1 Background ........................................................................................................................ 2 1.2 Objectives of the project: Foresight of sectoral innovation challenges and opportunities ... 3 2 Research approach............................................................................................................. 4 2.1 Conceptual framework........................................................................................................ 4

2.1.1 Sectoral systems of innovation and production......................................................... 4 2.1.2 From sector analysis to foresight .............................................................................. 6 2.1.3 Combining SSIP and foresight.................................................................................. 7

2.2 Methodological approach ................................................................................................. 10 2.2.1 State of the art analysis .......................................................................................... 10 2.2.2 First foresight workshop.......................................................................................... 10 2.2.3 Deepening and Scenario development ................................................................... 11 2.2.4 Second foresight workshop..................................................................................... 11 2.2.5 Final reporting......................................................................................................... 11

3 How to read the sector foresight interim reports........................................................... 12 3.1 The approach of the first scenario workshop.................................................................... 13 References................................................................................................................................. 14 Annex: An overview of drivers of innovation ......................................................................... 15

Sectoral Innovation Foresight Interim Report - Introduction

Europe INNOVA Sector Innovation Watch

Foreword

This Foresight on sectoral innovation challenges and opportunities is part of the Sectoral Innovation Watch (SIW) project within the Europe INNOVA initiative. Europe INNOVA was launched by the European Commission's Directorate General Enterprise and Industry and aspires to become the laboratory for the development and testing of new tools and instruments in support of innovation with the view to help innovative enterprises innovate faster and better. It brings together public and private innovation support providers such as innovation agencies, technology transfer offices, business incubators, financing intermediaries, cluster organisations and others. The Sectoral Innovation Watch (SIW) project aims at monitoring and analysing trends and challenges. Detailed insights into sectoral innovation performance are crucial for the development of effective innovation policy at regional, national and European levels. The nine sectors under study in the Sectoral Innovation Watch are

• aeronautics and space;

• biotechnology,

• electrical and optical equipment,

• automotive,

• construction,

• wholesale and retail trade,

• knowledge intensive business services,

• food and beverage, and

• textiles and clothing.

In addition, five horizontal themes are addressed in the Sectoral Innovation Watch project,

namely eco-innovation, lead markets, gazelles (i.e. small fast-growing firms), national

specialization and organisational innovation.

The Foresight of sectoral innovation challenges and opportunities addresses a number of issues that can be characterized as long-term, strategic issues for the future development of European industries. We will identify markets and technologies that may have a disruptive effect in the 9 sectors in the future as well as well as challenges and implications for European companies and public policy.


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1 Introduction

1.1 Background

Innovation dynamics differ across sectors. Therefore, exploring future perspectives on general innovation patterns is not enough to grasp the kinds of changes companies and other actors will need to deal with in specific sectors in the coming years. A genuinely sectoral approach is needed. Therefore, this Foresight on sectoral innovation challenges aims to integrate forward-looking perspectives on sectors with a thorough understanding of the dynamics of sectoral systems of innovation. During recent years a growing number of projects have been conducted on sectoral innovation systems on the one hand and on foresight on the other. However, although the early roots of (technology) foresight have been in innovation systems research, these two areas of research have not been combined very often (Martin and Johnston 1999). Within the Sectoral Innovation Watch project we are addressing this gap and connect these two areas. The aim is to support the development of future-oriented innovation policies and strategies at sectoral level by identifying key drivers, emerging markets (in the sense of expected future markets) and systemic requirements (such as organisational changes at firm level; skills requirements; structural changes - e.g. also merging of sectors; institutional changes - e.g. in terms of the IPR-regime). To that end, novel approaches and methods of sectoral innovation foresight are developed and applied. The concept of sectoral systems of innovation and production (Malerba 2002) aims to provide a multidimensional, integrated and dynamic view of sectors and how they change. A sectoral system is not only based on a specific knowledge base, technologies, inputs and demands that determine its development. The sectoral development is also affected by what we will subsequently call drivers of change, i.e. both trends and trend breaking developments within and external to a sector. The interactions of the sectoral actors (individuals, organizations, networks, etc.) are shaped by institutions and by drivers of change. When undergoing a change and transformation process as expressed in the co-evolution of its various elements, a sectoral system is affected by science and technology drivers and demand side drivers. Foresight, in the way it is understood in this project, is not about predicting the future, but follows the approach of “thinking, debating and shaping the future” (European Commission 2002). It thus aims at sketching different reasonable variants of possible future developments (“scenarios”), the associated challenges, underlying driving forces and options for dealing with them. In order to achieve this, the foresight approach must look beyond current trends (which are nevertheless an important input), and in particular into qualitative trend breaks that can give rise to qualitatively different future development paths in the sectors under study. It is when these qualitative trend-breaks are superposing that major changes in both innovation and markets can happen.


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This foresight exercise aims at looking beyond time horizons that can be addressed by simply extrapolating current trends. In other words, we aim to look sufficiently ahead for major changes to happen, while at the same time remaining sufficiently close to the present with our foresight work to remain relevant to decision-making in the next couple of years. While for the fast-changing sectors this may imply a three- to five-years time horizons (e.g. biotechnology, electrical and optical equipment), for others (e.g. construction) a ten-years time horizon may be a more appropriate orientation for the kind of time horizon the sectoral innovation foresight project is addressing.

1.2 Objectives of the project: Foresight of sectoral innovation challenges and opportunities

Against this background, the main objectives of the sectoral innovation foresight exercise can be summarised as follows:

• Explore and identify the main drivers of change in the nine sectors under study. These drivers will be both internal and external to the sectors, with several of them being of a cross-cutting nature.

• Identify and assess key future developments (i.e. main drivers, innovation trajectories/themes, emerging markets, necessary requirements to support innovation and the success on emerging markets) in the nine sectors as well as in terms of cross-cutting developments. The emphasis is put on future innovation themes and associated emerging markets, more specifically also on the requirements and impacts they raise in terms of skills requirements, organisational, institutional and structural changes in the sectors concerned.

• Develop scenario sketches for the sectors under study, which capture the major uncertainties ahead of us.

• Highlight key policy issues for the future, with a view to enhancing the innovation performance and competitiveness of firms operating in these sectors.

• Stimulate debate and contribute to the creation of expert networks, based on the participatory elements of this task.


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2 Research approach

2.1 Conceptual framework

The foresight task shares with the other elements of the Sectoral Innovation Watch project the main conceptual foundations by relying on a systems perspective on innovation, more specifically the approach of Sectoral Systems of Innovation and Production (Malerba 2004). However, the main building blocks of Sectoral Systems of Innovation and Production were slightly adjusted in order to make them compatible with the perspectives, the vocabulary and the methodologies prevailing in foresight.

2.1.1 Sectoral systems of innovation and production The dynamics and transformation of sectoral systems are seen as the result of several different developments including processes of variety creation in products, technologies, firms, institutions as well as creation of new agents (both new firms and non-firm organizations) and processes of selection (Malerba 2005). Change in sectoral systems is the result of the co-evolution of various elements including technology (science and technology drivers), skills (knowledge base, learning), demand (demand side drivers), structural change (firms, non-firm organisations and institutions). The framework for examining factors that affect innovation in sectors includes the following main building blocks (Malerba 2005):

• Knowledge and technologies, • Actors and networks, • Institutions

In addition, two further important aspects need to be stressed: • Demand • Co-evolution

Whereas knowledge and technologies are at the heart of what innovation is about, actors and networks, including the demand side, represent the main types of agents influencing innovation. Institutions represent the “rules of the game” according to which these agents interact. The principle of co-evolution implies that in order for a sectoral system of innovation and production to change, these different elements need to change simultaneously and coherently. And they are therefore also the key elements to be investigated and explored in the foresight exercise. Knowledge and technologies Within the concept of sectoral systems of innovation, sectors could be characterised by specific knowledge bases, technologies and inputs. In other words, it is the shared body of knowledge that distinguishes a sectoral innovation system from others. The focus on knowledge and technology places the issue of sectoral boundaries at the centre of analysis, as in sectors in which innovation is quite rapid, sectoral boundaries change (e.g. boundaries between the sectors


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of food and beverages and biotechnology). Dynamic complementarities that take into account interdependencies and feedbacks (both at the demand and at the production levels) “may set in motion virtuous cycles of innovation and change” (Malerba 2005). To serve in that way we need to identify the drivers of change (science and technology drivers as well as demand side drivers) both from within the sectors and from outside. At the intersection of S&T drivers and demand-side drivers of change, innovation (product, process, organisational) takes place, and with it changes in knowledge and technology, in actor constellations, in networks, institutions and emerging demand identifying innovation themes is thus crucial for starting and accelerating the virtuous cycles of innovation and change. Actors and Networks A sector is composed of heterogeneous agents (organisations and individuals) that are characterised by specific learning processes, competencies, goals, organisational structures and behaviours and interact through processes of communication, exchange, cooperation, competition and command. Connected in various ways through market and non-market relationships, the relationships and networks to generate innovations and commercialize them differ between sectoral systems. From a foresight perspective we will analyse issues related to organizational change, skills requirements and strategies of various agents for dealing with innovation themes in interaction with other organisations and their overall environment. Institutions The actions and interactions within and between the sectoral systems are shaped by institutions (including norms, established practices, rules, laws, standards, labour markets and so on) on different levels (regional, national, European). What is important to take into account is that beyond geographically specific institutions, sectorally specific institutions also matter. The set of institutions can constrain or enable the development of innovation in specific sectors. Within the foresight exercise we will address potential institutional adjustments that are needed for realizing major innovation themes. This includes the issues of regulation and standardization, but also issues arising from future skills requirements. Demand In addition to knowledge producers, the demand side is given a key role in the sectoral systems of innovation perspective. Demand is made up of heterogeneous buyers, individual consumers, firms and public agencies, each characterised by their specific knowledge, competencies and goals, and affected by emerging trends, trend-breaks, social factors and institutions. Thus, in a sectoral system demand is composed of heterogeneous agents whose interactions with producers are shaped and transformed by institutions. The emergence and transformation of demand play a major role in the dynamics and evolution of sectors and in cross-sectoral developments.


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The foresight exercise aims to identify potential future demand as a driver and shaping force for innovative activity within and across different sectors. Co-evolution Change in a sectoral system is a collective outcome of the dynamic interactions and co-evolution of its various elements. This process involves the aforementioned elements, i.e. knowledge and technology, firm and non-firm actors, their interactions and learning processes, it includes the demand side and the institutions that guide interactions. Sectoral analyses need to focus on intertwined changes in relation to these elements. From a foresight perspective, it is key to identify innovation themes and emerging markets and to focus on organisational, structural, institutional and skills-related requirements for their realisation. The aim is to capture different variants of the dynamics resulting from the interplay of different factors, for instance by way of scenarios.

2.1.2 From sector analysis to foresight Studies of sectoral systems of innovation and production offer manly a retrospective analysis of the development and underlying dynamics of sectors. Foresight, on the contrary, aims at sketching different plausible, but challenging variants of future developments, the associated challenges, underlying driving forces and options for dealing with them. In order to achieve this, the foresight approach is looking at driving forces, captured for instance in trends and trend breaks. Such driving forces are developments that are likely to exert a major influence on the sector under study and could thus shape the evolution of the sectoral innovation system under study, in particular when interacting with other drivers in such a way that a mutually reinforcing process sets in. Foresight processes can also look at ‘wildcards’, i.e. at unexpected or even seemingly unlikely developments that – in case of happening - could give rise to very different future paths than any kind of “business-as-usual” assumption, or at developments that could go wrong in a possible future path. Recognizing the fact that future developments are not pre-determined, but uncertain and open to judgement and intervention, foresight covers activities to think the future, to debate the future and to shape the future. It is thus not a tool for predicting the future, but a process aiming to develop shared problem perceptions, make differences in expectations explicit and identify needs (and options) for action (European Commission 2002):

Thinking the future (the cognitive dimension of foresight) o Foresight exercises try to identify new trends and trend breaks to guide decision-making.

Foresight activities aim at identifying today's innovation priorities on the basis of scenarios of future developments in science, technology, economy and society.


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Debating the future (the value based dimension of foresight) o Foresight as a participative process involves different stakeholders (e.g. industry, public

authorities, research organisations, NGOs) and its activities can be organised at different levels like cross-national, national, or regional. The aim is to organise open discussion between the participants in order to create a shared understanding.

Shaping the future (pragmatic and implementation-oriented dimension of foresight) o Foresight aims at identifying possible futures and future developments, imagining

desirable futures, and identifying strategies that facilitate implementation. Foresight results are generally fed into public decision-making, but they also support participants to develop or adjust their strategy.

Thinking, debating and shaping the future of different but interlinked sectors is crucial today because innovation is a collectively shaped process, a distributed process, and a path-dependent process. It also needs to take into account that the future development of a sectoral system cannot be investigated in isolation, but is embedded in wider contextual developments.

2.1.3 Combining SSIP and foresight Innovation at sectoral level depends to a large extent on the developments within the innovation system, but they are also driven by developments in its context, like for instance changes in science and technology. To explore future patterns of innovation, it is thus necessary to investigate these contextual developments, as well as corresponding developments within a sectoral innovation system. Foresight activities have been inspired by a range of theoretical perspectives on processes of socio-technical change, but also by the practical client needs of exploring the future. At present a gap can be perceived between innovation theory and foresight practice, i.e. there is no specific framework available that would combine both. For the purposes of this foresight exercise, the main building blocks of sectoral systems of innovation and production (i.e. knowledge and technologies, actors and networks, and institutions) have been taken into account, but integrated with the kinds of concept that are used in foresight approaches. We will thus add the notions of driving forces, innovation themes and emerging markets in order to be able to explore possible future development paths (“scenarios”) of sectoral systems of innovation and production. We argue that in order for innovation themes to evolve into markets, the different elements of a sectoral innovation system need to co-evolve. This has led to a simple pattern of analysis, along the lines of which the sectoral foresights will be structured. The essence of this approach can be captured by the subsequent building blocks (see Figure 1):

• Driving forces, i.e. emerging trends and trend breaks in S&T developments, in expected demand that are likely to exert a major influence on the emergence of possible innovation themes. These driving forces can be internal to a sectoral system, but they can also be forces external to the SSIP under study. Broader cross-


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cutting developments (e.g. the extent to which globalization affects a sector) can thus also be taken into account. Driving forces are rather general in nature, and they can affect several sectors simultaneously (see Annex).

• Innovation themes, which are seen as the result of the interplay of S&T developments and changes in expectations regarding future developments on the demand side. In contrast to driving forces, however, innovation themes are rather specific areas on which attention and innovation effort are likely to be focused in the coming years. They can thus be interpreted as sector-specific bundles of product and/or process innovations, together with the associated technologies, knowledge and organisational changes.

• Emerging markets can achieve significance if innovation themes evolves successfully, i.e. if potential barriers to innovation can be overcome and enablers be strengthened. Initially, innovation themes have a potential to evolve into a market. However, whether this potential can actually be seized depends to a significant extent on the context conditions provided by the sectoral innovation system.

• Requirements and co-developments in a sectoral innovation system can operate as enablers, but also as barriers for innovation and for markets to emerge. They can even be essential in order to allow markets to emerge at all. For instance, regulations can provide an orientation for future innovation trajectories to pursue, and the ability of firms to collaborate with research organisations may be key for enabling the exploitation of a new technological opportunity. In other words, the aforementioned building blocks of sectoral innovation systems are prominently integrated in the foresight approach under the headline of requirements and co-developments reflect. For the purposes of this exercise, we will refer specifically to

o innovation actors (like firms or research organisations) and their strategies for dealing with emerging drivers,

o organizational changes at firm level, o skills requirements and knowledge needed, for instance, to contribute to and

absorb S&T developments, o structural changes, i.e. changing configurations of actors in a sector. o institutional change, i.e. changes in the ‘rules of the game’ determining the

interactions between the actors


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Figure 1: Conceptual framework – combining foresight with SSIP

In addition to these four building blocks the co-evolutionary dynamics of innovation and change in a sector will be captured by way of scenarios. Scenarios are to be understood as plausible and at the same time challenging combinations of these building blocks in a future-oriented perspective. Due to uncertainties associated with contextual developments as well as with all other elements of the innovation system analysis, it is essential to think in terms of several, qualitatively different scenarios of the future, especially if a time horizon is chosen that goes beyond the scope of extrapolating current trends and aims at qualitative changes (see Figure 2). In particular, the interplay of different drivers and their mutual reinforcement can give rise to major, even disruptive changes in sectors, with major implications for firm strategies as well as public policy.


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Figure 2: Scenarios as a means to capture alternative co-development paths in sectoral innovation systems

2.2 Methodological approach

The Sectoral Innovation Watch foresight exercise is implemented in five main steps:

2.2.1 State of the art analysis The nine interim sector papers are based on a review of existing foresight material. They serve as input to the workshop on “Sectoral innovation foresight: key drivers, innovation themes & emerging markets” that took place in Brussels (23-24 June 2009). The papers represent work-in-progress, i.e. the emphasis is put on the analysis of drivers and innovation themes, whereas emerging markets and co-developments are addressed in depth at and after the first workshop.

2.2.2 First foresight workshop The first workshop aims at validating and deepening the findings on drivers and innovation themes, but also at exploring first ideas about future sector-level scenarios and associated co-developments. Interim findings are presented and discussed in working groups that deal


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specifically with each individual sector as well as with the main cross-cutting issues. The discussions with and feedback from the sector experts across Europe helps validate interim results on key drivers, innovation themes, related emerging markets and associated requirements, and thus contribute to the identification of the crucial issues for the future.

2.2.3 Deepening and Scenario development On the basis of the results of the first workshop, the preliminary findings on emerging developments in the sectors are deepened. In this phase (where the project is now) we are evaluating the inputs from the workshop. Interviews help refine our understanding of the role of co-developments for the emergence of markets related to the innovation themes identified.

2.2.4 Second foresight workshop Scenarios are already addressed in the interim reports and the first scenario workshop, but they play a central role at the second foresight workshop in late 2009. Within the scenario framework, the potential of selected innovation themes are explored. Moreover, cross-sectoral issues are addressed, like for instance common drivers of change across sectors or inter-linkages between them. The second workshop also aims at extracting those issues that – from a forward-looking perspective – are likely to require policy attention.

2.2.5 Final reporting The results of the exercise are integrated in a set of final sector reports that shall become available in Spring 2010.


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3 How to read the sector foresight interim reports

As input to the first scenario workshop, a set of nine sector foresight papers are made available to participants in advance of the event. As interim reports, they follow the overall structure of the conceptual framework (see 2.1.3), but they emphasize in particular those aspects that could be tackled by means of the review work foreseen in the first phase of the project. As a consequence, the sections on drivers and on innovation themes are more elaborated than those dealing with emerging markets, co-developments and scenarios, which will actually be addressed at and after the first foresight workshop. The papers are thus composed of the following main chapters:

• Current situation: This chapter gives a brief overview of the recent evolution and current situation in the sector under study, as well as a delimitation of sub-segments covered by this sector.

• Drivers of innovation and change: Two main types of drivers are distinguished: S&T drivers and demand-side drivers. In essence, this chapter aims to draw the ‘big picture’ of the main S&T and demand-related driving forces that are likely to shape innovation and change over the coming years in the sectors under study. These drivers are analysed at a comparatively high level of aggregation and cover major trends in science and technology, as well as societal, economic and even global developments that may have repercussions on the demand side of the sector. Where possible, major cross-cutting issues at the intersection of S&T and demand-side drivers are highlighted as well.

• Emerging innovation themes: Innovation themes as defined above are a core element of these interim sector reports. They capture the main areas where innovation activities in a sector are likely to be concentrated in the coming years. Due to the intimate link between innovation themes on the one hand, and firm strategies, skills and organisational changes at firm level on the other, these two co-developments are also tackled in this chapter. It is foreseen that emerging markets associated to these innovation themes will also be tackled in this chapter at a later stage of the project. The review work conducted so far did allow addressing these market issues in a meaningful way for some sectors only.

• Institutional and structural co-developments and requirements: The emergence of markets associated to the innovation themes depends on the influence of barriers and enablers in the sectoral innovation system. These barriers and enablers, which are often of an institutional (e.g. standards, regulatory issues, etc.) and structural (e.g. restructuring of the supply chain, industrial shake-out, etc.) nature, will be addressed in this chapter. At the current stage of the project, this chapter is still less elaborated than the previous one on innovation themes. It is actually one of the objectives of the first foresight workshop to deepen the understanding and role of these institutional and structural issues; a task that will be continued also after the


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workshop. Possible configurations of these factors are closely related to the scenarios to be developed.

• First elements of scenarios: The different configurations of institutional and structural aspects will in the end be embedded in the main scenario sketches to be developed as part of this foresight exercise. However, at the current, interim stage of the project, only some first indications of possible characteristic dimensions for scenarios are outlined in this chapter. For some sectors, existing scenarios could be drawn upon, for others there was hardly any scenario-type material available. If appropriate, the scenario work on the nine sectors will be put under a joint umbrella of a few basic context scenarios that all sectors share.

• Key questions: As a final chapter, a number of key questions will be raised. They refer to open issues, but also to major uncertainties in the sector. They are meant as ‘food for thought’ in advance of the first foresight workshop, and as a source of possible issues to be addressed at the workshop. They also provide a first inroad for what later on might evolve into issues in need of policy attention.

3.1 The approach of the first scenario workshop

The design of the first sectoral innovation foresight workshop relies on the use of interactive techniques for exploring the future. Small sectoral working groups of up to eight participants, led by two experts from the Sectoral Innovation Watch project team, were complemented by plenary sessions to report on working group results and discuss inter-linkages between sectors. The results of the working groups were immediately documented with the help of post-its and flipcharts. The workshop was organized in the following sections:

• The introductory overview session was held in plenary and aimed to explain the rationales behind the project and the main concepts that guide the sectoral innovation foresight work. Also the working process and the expected results of the different sessions were outlined.

• At the beginning of the first session in sector working groups, a brief overview and reminder of the main findings of the interim reports was given. The core of this session was a discussion of the main S&T and demand drivers influencing the sector under study, looking both a general, cross-cutting drivers and at drivers that are specific to the sector. As an input to the later scenario session, drivers that are characterised by a high degree of uncertainty and influence were identified.

• The second working session focused on sector-specific innovation themes, i.e. at those bundles of technologies, product and process innovations that are likely to attract a lot of attention in the future. In some of the sectors, it was necessary to distinguish sub-sectors in order to generate meaningful results (e.g. technical textiles and clothing). In addition, the main applications and expected/potential markets were identified. As for the previous session, the findings of the interim reports represented the basis to start from in this working session; they were critically reviewed and complemented.


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• The second day of the workshop started with a first exchange in plenary on interim findings of the working group, on similarities, differences and interlinkages between sectors.

• The subsequent session was a key part of the workshop, dealing with the exploration of sector (and possibly sub-sector) scenario sketches. Apart from the first hints from the interim reports regarding possible dimensions to formulate scenarios, the findings on the most uncertain drivers as discussed on the first day were be taken up in this session. A simple template served as orientation for specifying the scenario sketches.

• Regarding the scenario sketches, the issues of expected markets associated to the main innovation themes were taken up again. Emerging markets differ (e.g. in terms of size, types of products, geography, etc.) depending on the conditions defined by the sector scenario sketches. These differences were specified.

• For innovation themes to develop into markets several requirements and co-developments need to be met. These requirements are scenario-specific and were specified in some of the sector working groups. As part of this session, implications for the location of innovative activities in Europe and ultimately for policy were also addressed.

After the workshop, the main results were documented and made available to all participants. They will be fed into the sectoral innovation foresight final reports References

European Commission (2002). Thinking, debating and shaping the future: Foresight for Europe. Final report prepared by a High Level Expert Group for the European Commission. Brussels, European Commission.

Malerba, F. (2002). "Sectoral systems of innovation and production." Research Policy 31(2): 247.

Malerba, F., Ed. (2004). Sectoral Systems of Innovation: Concepts, Issues and Analyses of Six Major Sectors in Europe. New York, Cambridge University Press.

Malerba, F. (2005). "Sectoral systems of innovation: a framework for linking innovation to the knowledge base, structure and dynamics of sectors." Economics of Innovation and New Technology 14(1): 63 - 82.

Martin, B. & Johnston, R. (1999). "Technology Foresight for Wiring up the National Innovation System." Technological Forecasting and Social Change 60: 37-54.


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Annex: An overview of drivers of innovation

An important part of the sector foresight papers is the description of major drivers of innovation and change that are relevant for the further development of the sectors. Supply-side drivers for new innovations are mainly new insights in science and enabling technologies. From the demand side emerging societal challenges can be seen as important drivers for change. In this Annex, a short description will be given of the broad trends in science and technology developments, as well as the societal challenges that can be relevant for many of the sectors under study. S&T drivers The amount of scientific and technological knowledge has been constantly increasing throughout human history. The use of tools and crafts by humans can be seen over 50,000 years ago. More modern technologies were the major driver for the industrialization in the 18th and 19th century (e.g. the steam technologies and manufacturing technologies). Also the chemical technologies in the late 19th and beginning of the 20th century have proven to be disruptive for our society. Recent examples are of course ICT and biotechnology. So the question is what the major trends in technologies are that will initiate the innovation of the future. The figure below is based on an analysis of different future technology studies, and it gives an overview of the main areas in which to expect very important developments in science and technology in the years to come. The sectors under study will be influenced by these developments to varying degrees. Figure 3: S&T drivers


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These new scientific insights and new enabling technologies are important drivers for innovation. New individual and combinations of technologies will enable the development of new innovative products. An example are the new mobile phones, where advances in ubiquitous networking, further miniaturization of products, and smart and better materials have proven to be key for the present success of the ICT industry. But new mobile phones are on its way, using new developments in virtual modelling to further enhance the multimedia functionalities of the products. When combining several of these S&T drivers, a number of resulting major innovation trends can be identified that are likely to be of cross-cutting importance in many sectors. Table 1: Ten major innovation trends resulting from developments S&T drivers

Miniaturization of products; Increasing intelligence of products; Robotization; Ubiquitous networking; Smart and better materials; Better insight in the human body; Better understanding of society; Better understanding of ecosystems; Virtual modelling and testing; More efficient manufacturing

Demand-related drivers From the societal point of view, the expected changes in demand patterns and major societal challenges operate as important drivers for innovation. A clear example is the gorwing importance of environmental concerns, which – by way of regulation and public pressure on reducing waste, reducing energy consumption - have played a key role in the characteristics of environmental innovation in particular, but also for many other areas of innovation. Looking at today and tomorrow, there are some key societal challenges that can be identified as important drivers for innovation. An overview is given in the figure below.


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Figure 4: Demand drivers

Looking at the overview provided, some major clusters can be identified: • Environmental sustainability, where both the focus on climate change, as the

environmental impact (local and human) are of importance, also including the working conditions of personnel;

• Healthcare, including the new demands for healthcare, ageing, the organisation of the healthcare system as well as issues on epidemics, pandemics;

• Security and defence, including issues on terrorism, migration, crisis and disasters and even other more defence oriented globalisation issues;

• The organisation of food production, including issues on animal welfare, food safety, food security;

• Economic development, including how to deal with the knowledge economy, the information society and the translations to the educational system, as well as the challenges on the overexploitation of natural resources;


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