Exploring the scope of regions in challenge-oriented innovation policy: the case of Schleswig-Holstein, Germany

ABSTRACT

Recently, challenge-oriented innovation policy has become increasingly popular in political and scientific discussions. However, the extent to which such a challenge-based thinking has entered regional policy making is relatively unclear. This paper examines the scope of the regional level in promoting challenge-based innovation, focusing on the recent renewable energy innovation policy in Schleswig-Holstein, Germany. The results show that while regional innovation policy in Schleswig-Holstein aims to address several structural and transformational systemic failures, many other problems and challenges remain, as they are beyond the capacity of a single region to address. Based on this analysis, we draw four conclusions. First, similar to many other structurally weak regions, policymakers in Schleswig-Holstein are struggling with some of the same key challenges that the policy was originally designed to address. Second, multi-scalar governance and inter-scalar coordination are essential for managing regional sustainability transitions. Third, challenge-driven innovation policy is an extension of, rather than a replacement for, conventional regional innovation policy. Finally, environmental and economic goals should be well balanced in challenge-driven regional innovation policy design.

KEYWORDS:

• Challenge-oriented innovation policy
• regional innovation policy
• renewable energy
• multi-scalar
• Schleswig-Holstein
• Germany

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 These policies are referred to as, among others, challenge-driven innovation policy (Coenen, Hansen, and Rekers 2015), innovation policy 3.0 (Grillitsch et al. 2019), mission-oriented policy (Mazzucato 2018), and transformative innovation policy (Schot and Steinmueller 2018; Diercks, Larsen, and Steward 2019). For the purpose of simplification, we use the term ‘challenge-oriented innovation policy’ but draw insights from the literature dealing with the abovementioned concepts.

2 Although some fundamental issues are discussed around challenge-oriented innovation policies, for instance about its contested nature and the role of the state vs. market (see Frenken, 2017; Karlson, Sandström, and Wennberg 2021), it would go beyond the scope of this paper to deal with them in detail.

3 Typical examples of these pioneers are Rainer Christiansen and Ove Petersen.