Mission (im)possible? How to deal with the quest for extensive structural change: A review (scoping paper)

The main way in which an economy develops is by the application of new or improved products, processes or business models leading to structural change within or across sectors. It is of paramount importance for policymakers, therefore, to have access to knowledge about what drives such processes and how policy may contribute to a beneficial outcome for society. The current quest for rapid and extensive structural change in Norway as well as other developed countries is as emphasized in the call related to "climate change and considerations related to the environment and the resource base (which) suggest that there must be a shift towards more sustainable methods of production". The paper aims at providing an overview, discussion and synthesis of research on how policy can influence fundamental economic changes of the type mentioned in the call. Although much of this literature is theoretical in nature, the paper will also place emphasis on relating to evidence from policy practice.

The main way in which an economy develops is by the application of new or improved products, processes or business models leading to structural change within or across sectors (Rodrik 2009). Thus, as the call points out, such structural change (or economic restructuring) is a core aspect of economic development. It is of paramount importance for policymakers, therefore, to have access to knowledge about what drives such processes and how policy may contribute to a beneficial outcome for society. This is especially evident in times of rapid and extensive structural change, characterized by, as the call points out, "whole systems which must change more or less simultaneously". The current quest for rapid and extensive structural change in Norway as well as other developed countries is as emphasized in the call related to "climate change and considerations related to the environment and the resource base (which) suggest that there must be a shift towards more sustainable methods of production". The scoping paper takes this need for extensive structural change (transforming the economy towards sustainability) as its point of departure. However, consistent with the call, the main focus is not so much on discussing the nature of these structural changes, although that will also be considered, as on "how public policy and the public agencies within the research and innovation system can better help to stimulate" such changes. Thus the scoping paper aims at providing an overview, discussion and synthesis of research on how policy can influence fundamental economic changes of the type mentioned in the call. Although much of this literature is theoretical in nature, the paper will also place emphasis on relating to evidence from policy practice. A final section will consider lessons and point to issues in need of further exploration.