Innovation policy beyond myopia: Challenges of new path development and implications for innovation policy

Due to the dominant position of the oil and gas industry, Norway was hard hit by the large fall in oil and gas prices since 2014. The effect of this fall in prices was largest in the southern and Western parts of Norway, where oil and gas dominated the regional economy. Thus, there os a great need of industrial restructuring in Norway in general, and specifically in the parts of the country hardest hit by the crises, to become less dependent on oil and gas and obtain a more diversified and sustainable economy. The scoping paper analysed potnetial new paths such an industrial restructuring can follow, and studied especially: - the capacity of knowledge generation and knowledge use in regional innovation systems - the windows of opportunity that new combinations of unrelated knowledge offers for new path development - the importance of non-local knowledge flows and linkages for industrial restructuring - how a new regional innovation polivy should look like that could contribute to building the capacity in firms for using new combinations of knowledge to support the development of (especially more radical forms) OF new regional industrial paths. The scoping paper concludes that policies seeking to promote radical innovation and new path development must involve intervention along three complementary dimensions, each of which contains numerous questions and issues that demand research and careful consideration in policy design: 1. Exploration: Policy guidance, logics, infrastructures and tools providing incentives for actors to explore combinations of (previously) unrelated knowledge on an ongoing basis. 2. Anchoring and exploitation: Policy guidance, logics, infrastructures and tools creating incentives for entrepreneurs (corporate as well as institutional or individual) to ?grow? new (unrelated) activities in the economy in spite of limited initial resource support (when they deviate from current specializations). 3. The creation of ?policy spaces? where failure is legitimate, and coordination (across levels of governance and policy fields) combined with monitoring based on dedicated infrastructures for evaluation and research provide the basis for policy learning (and adjustment) involving various ministries and research communities.

Mulighetspaperet har bidratt til en fornyelse og utvidelse av diskusjonen om nye former for regional restrukturering/nye nregionale industrielle utviklings stier. Dette har betydning såvel for forskning om regional restrukturering som for politikkutforming for å fremme industriell retrukturering mot en mer diversifisert og holdbar økonomi.

Norway's restructuring challenges stem from the vast expansion of petroleum-related sectors during the last decade, and their current contraction due to falling energy prices. This calls for approaches that go beyond the current policy logic of foremost focusing on path extension, promoting instead path creation in order to diversify the economy into new sectors with high productivity levels. We deal with restructuring challenges by analyzing factors that can promote and support new path development and regional economic diversification, thus advancing the knowledge base for design and implementation of research and innovation policy. The main attention will be on knowledge gaps in regional innovation studies focusing on new path development related to: - Exploration-exploitation capacity of regional innovation systems (RIS) - Potential of unrelated knowledge combinations/unrelated variety - Importance of non-local knowledge flows and linkages - Regional innovation policy for building exploration and exploitation capacity in new and emerging fields in firms, regions (HEIs) and systems (RIS) Our research focus on industrial experimentation with previously unrelated knowledge combinations and the build-up of exploitation capacity in new technology and market domains demand linking of firm-level information with data on public funding for the purpose of analyzing behavioral additionality. Using the outcome of the literature-based scoping exercise as point of departure, the project will assess how data infrastructures based on CIS-LEED data and R&D project data can be built and used as the basis for econometric analyses of policy influences on innovation-based industrial dynamics in general and of barriers and enablers of new path creation in particular. We will assess the need for quantitative analyses to be supplemented by qualitative analyses of sectors to provide novel insights which can guide the development of a new policy framework.