Innovation agencies in Europe play a pivotal role in supporting high growth industries, as well as small-to-medium sized businesses that are often the backbone of local economies. From a unique position that is both close to the government (sometimes fully embedded within it) and close to entrepreneurs, innovation agencies tend to have similar mandated roles and responsibilities. In 2021, the Innovation Growth Lab (IGL) was commissioned by TAFTIE (the network for European agencies) to conduct a study that would surface correlations between the strategies, organisational setup and support programmes of its members. The aim was to identify gaps and facilitate conversations about the future in relation to trends in research and innovation (R&I). A key takeaway has been that if European innovation agencies are to keep up with the rate of change, be it technological or societal, their identities in the future must be led by the needs of the innovators they look to support.
What did we find out?
- The nature of an ecosystem: No agency is the sole actor supporting research and innovation, whether they are in distributed innovation systems where there are lots of actors or consolidated ones that are dominated by a few key players.
- Institutional safeguards: The ways that agencies protect themselves from undue external interference or secure stability beyond budget cycles is another key determinant, whether agencies are institutionally close to their funders or more distant collaborators.
- Adaptation to change: With over two-thirds of TAFTIE agencies experiencing significant structural or budget changes in the last five years (even prior to disruptions from the pandemic), it is clear that agencies operate in an environment of constant change. However, agencies’ responses to these changes differ.
- The policy mix: Innovation agencies in Europe tend to deploy the same kinds of programmes, policies and instruments but while some agencies opt to deliver a broad set of programmes, others take a specialist approach delivering fewer targeted instruments.
- Learning cultures: In increasingly turbulent, uncertain, novel and ambiguous contexts, learning becomes essential for innovation agents to adapt the delivery of programmes efficiently or respond to signals about changing roles. All agencies require structured learning systems to make the best use of insights that can inform decision making.
- Talent and skills: Most TAFTIE agencies said they struggled to recruit and retain talent. Market competitiveness for technical skills as well as operational gaps that have increased the need for clear strategic leadership were some of the underlying reasons we heard of.
In addition, TAFTIE members helped us to uncover six distinct ways innovation agencies responded differently to push and pull factors in their environments. You can read about the six profiles in our report - but it’s important to note that what we found out in 2021 is only a snapshot of a given time. Therefore, making sense of what was on the horizon was equally important.
What did we learn about the future?
As part of this research project, we wanted to provide innovation agencies in Europe with tools for how they could use insights about the present to navigate the future. In the final report, we deep dive into four key challenges European innovation agencies may face in the future:
- Adapting to directionality: How can agencies maintain a sense of identity if the need to rethink their roles begins to take place more frequently than it did in the past.
- Focused policy and delivery: Europe has a strong history of nuanced and effective innovation policy but maintaining this precedent is becoming harder given exponential technological change and other transformations.
- Building competitive skills and talent: Agencies will likely need to work harder to attract the technical skills required to meet R&I demands in the future. They will also need to develop a clear sense of what their needs are today while also anticipating future capabilities required.
- Diversifying reserves: Financial and political instability make it difficult for agencies to act in a responsive rather than reactive way. Diversifying resources to support longer-term transformational objectives will be key.
Each of these challenges presents a number of opportunities, from better use and deployment of foresight and innovation methods to the innovation agency acting more like a convenor in R&I systems of the future. The tools developed as part of this research support agencies to consider the shifts they might need to take to seize opportunities - of which there are many. Yet, as the success of the innovation agency becomes inextricably linked to the success of the innovator, who operated under these same contextual pressures, improving how agencies anticipate the needs of innovators becomes the only constant.
Our report makes three recommendations:
- Develop better data gathering and sharing capabilities
The TAFTIE network presents a great platform for sharing knowledge and ideas but this is not the only way that agencies learn. During our study, we asked agencies to gather data on their programmes, strategies and operations but this will need to become a more regular practice for up-to-date information to be used in real time. What kinds of data would help inform actors supporting innovators across their business life cycles? Becoming better at managing internal data systems as well as making better use of bilateral agreements will be key to better understand changing needs
- Support discussion of the future and encourage collaborations
To make the best use of information that is gathered over time, regular spaces for multiple stakeholders to reflect and consider the future are needed. Over the course of our research, we held a number of workshops with the same TAFTIE members. The conversations we had towards the end of the research were far more nuanced than those at the start. This is normal - groups of all kinds need time to norm and form (and later perform). Identifying synergies between contexts, whether internally between teams or externally between organisations, takes time. Additionally, there needs to be a clear purpose for collective knowledge that is built. What kind of insights are useful? What blindspots could be addressed? What potential collaborations appeal to innovation agencies? This final question is even more important for agencies operating in systems where competition between R&I actors is high.
Strategic learning requires structure, infrastructure and process. It cannot happen in a vacuum if insights and evidence are to inform decision making. While some agencies are well set up to embed strategic learning, others will need support, guidance and resources to make use of evidence that exists and is emerging. Learning from innovation trends outside of national borders and translating them into actionable insights for the design of new programmes again will be key. However, new ideas will need to be robustly tested. So again, investing in learning systems that go beyond reporting needs alone has to become a priority.
The challenges we face are big but there are exciting opportunities should innovation agencies and those who fund them be willing to embrace navigating shifting landscapes. The north star should be the needs of innovators themselves, and there are many signs of how innovation agencies in Europe and beyond
have already started to respond in distinct ways. Evidently, there is always more that could be done to encourage the innovation of innovation agencies themselves - better data sharing, collaboration and embedded learning can help propel the transformations needed. At the Innovation Growth Lab, we are excited to continue supporting these vital agents through our partnership model and through other collaborations with the TAFTIE network.