The other side of innovation

long for each cause-and-effect relationship. In the early emphasize hypotheses and assumptions, not data and
stages of an innovation initiative, when validating precedents; it must question fundamental assumptions
cause-and-effect relationships, mental simulation of monthly or quarterly, not annually; it must present
the hypothesis of record is an adequate approach to outcomes as trends, not aggregate totals for long time
predicting outcomes. If predicted and actual trends are periods; and it must highlight custom metrics, not
similar, the cause-and-effect relationship is validated. standard ones drawn from chapters 4 through 6.
Once cause-and-effect relationship has been established, This book proposes a model for executing one
quantitative analysis becomes more valuable in refining innovation initiative. At this model’s foundation is a
estimates of the revenue and cost parameters that will recognition that there are fundamental incompatibilities
shape profitability. Companies should not assume that between ongoing operations and innovation. While
metrics and standards used to evaluate the existing Performance Engine seeks efficiency by making every
business have relevance for the innovation initiative. task, activity, and process repeatable, innovation is by
After creating a cause-and-effect map, companies nature nonroutine and uncertain.
have to consider each linkage. How uncertain is each According to this book, some CEOs fear high
assumption? What are the consequences of being aspirations. They are fated to mediocrity. Those
wrong? Companies must identify the most critical that have the courage to aim high must renew their
unknowns, and find ways to resolve them quickly and commitment to innovation. In the new era, the word
inexpensively. innovation will convey breakthrough solutions for a
Lastly, chapter 6, under the title of “Seek the peak world population of nearly 10 billion people,
Truth”, argues that myriad pressures in organizations all striving for a better life, all facing the realities of
push people toward interpretations of results that are a crowded and constrained planet. Corporations face
comfortable and convenient rather than analytical and many pressures to act in a socially responsible manner.
dispassionate. These pressures must be understood In conclusion, the real innovation is to implement the
and overcome. Objectively assessing the result from new ideas under various pressures and challenges.
an innovation initiative is difficult. It is critical to
be aware of the emotions and biases that can distort
interpretations of progress. The most common bias, Reviewed by Bongjin Kim
and the most critical one to fight, is overcommitment School of Business, Ewha Womans University
to the original innovation plan. This bias is particularly 11-1 Daehyun-dong, Seodaemun-gu,
prevalent in companies with strong performance Seoul, 120-750, Korea
cultures, in which falling short of the plan is E-mail: bkim432@ewha.ac.kr
equivalent to failure. Innovation leaders should face
mixed accountabilities-for results, actions, and learning-
customized to the innovation plan and the nature of
the uncertainties it faces. Holding someone accountable The Theory and Practice of Innovation Policy:
for learning requires close observation of the planning An International Research Handbook, Edited
process and evaluation of whether the experiment is by Ruud E. Smits, Stefan Kuhlmann and
being run in the most disciplined possible manner. Philip Shapira, PRIME Series on Research
To attract the best leaders to innovation initiatives, and Innovation Policy in Europe, Edward
companies must create the right mix of incentives. Elgar (2010), 481 pages, ISBN: 9781845428488
They must offer at least modestly positive rewards
when initiatives fail despite good leadership. The There are two prevailing perspectives on innovation
planning process for an innovation initiative is quite throughout this book, a ‘system’ and a ‘learning’
distinct from the planning process of the Performance perspective. In fact, these are not new. Since the
Engine. It must be a rigorous learning process. It must 1990s, maybe even the late 1980s, many books about

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innovation have adopted these perspectives. The configuration changes through interactive learning
peculiarity of this book, distinguishing it from most among IPT a government can draw on ‘strategic
other books, is that these two perspectives are applied intelligence’ such as technology assessment, technology
to three ‘dancing partners’, innovation practice (I), foresight and policy evaluation. Strategic intelligence is
innovation policy (P) and innovation theory (T). needed “to stimulate innovation processes in an early
Innovation is not only an effect of new stage and take care that all relevant actors have access
combinations. According to a system perspective to and are provided with the information they need
it is a complex social phenomenon that, in an to play their role” (p461). Accordingly, a government
interdisciplinary context, can be conceptualized as a should build, develop, and reinforce relevant strategic
multi-actor and multi-level game. The phenomenon intelligence infrastructures to raise up the capability of
can be better understood by analysing the interaction the innovation system.
between the three dancers, their interaction and their Another peculiarity of this book is its emphasis on
interactive learning. The book builds on “a basic ‘practice’ in the IPT configuration. There are many
assumption that the ideas, rationales and instruments books addressing innovation theory or innovation
of innovation emerge as a result of interactive learning policy but few address innovation practice explicitly.
among IPT” (p7) in the innovation system with social, Other books regard practice as a by-product of policy
economic and technological dynamics. implementation: practice is treated as a kind of effect
Learning is important in the dancing of the three of financial and human investments, uncoupled from
partners. In the triangle of IPT one can observe theory, which is only connected with policy.
various ways of learning: learning by searching, Among the core concepts to understand innovation
learning by interacting, learning by using, formal are ‘technological regimes’ and ‘governance’. These
learning. Through these ways of learning, IPT concepts not only place emphasis on implicit and
continuously create and change their configuration uncodified forms in innovation such as routines,
on the ‘dance floor’, the space where the interactive norms, rules of the game, cognition, socio-cultural
learning occurs, as the dancers observe and react to factors but also suggest that ‘soft’ forms of governance
other partners’ movements. may play as a critical role in exercising innovation
This book emphasizes that such changes of IPT’s as ‘hard’ or ‘explicit’ forms do, like law, material
configurations shouldn’t be understood as a ‘co- resources, personnel. Innovation practice involves the
evolutionary’ process in a biological meaning of the soft sides as stated above, so one has to pay attention
word. Configuration changes among IPT are mediated to practice if one wants to understand the nature of
or bridged by learning processes, while ‘co-evolution’ innovation. In addition, tacit knowledge or informal
would suggest “that change in one sphere directly knowledge that constitute core elements in interactive
triggers change in another partner” (p452). The authors learning processes transferred by ‘practice’.
conclude that the core aspect of innovation policies Innovation practice, more specifically norms,
is to favourably stimulate some system conditions in emerges through two types of learning, ‘first-order
order to make a wide range of learning processes or second-order learning’. In first-order learning “the
occur (p452). norms themselves remain unchanged” (p7), IPT are
Learning, in a system perspective, differs from learning while they are dancing accepted music. On
seeing it in linear perspective. In a linear model of the other hand, in second-order learning, new music
innovation learning means the capability of producing is introduced to the dance floor “by restructuring and
new knowledge, while in a system model it means “a changing the norms themselves so as to escape tunnel
capacity to select, acquire and handle knowledge and vision and cross borders” (p7).
turn it into useful applications rather than to produce Interactive learning and practice are functional
new knowledge” (p461). elements of a system model of innovation, necessary to
In order to understand and influence the understand the dynamics of innovation processes. Other

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The Theory and Practice of Innovation Policy

than the linear model, a system model allows for more to “basic driving forces of innovation practice, theory
‘new combinations’, more options and opportunities and policy” (p14), and more specifically, discusses
for innovation policy, and lay a foundation for a the changing modes of knowledge production, the
‘holistic view of policy-making’: Many European changing role of the firm, and the globalization.
countries, especially Sweden and Netherlands, have The second part examines “the conceptual evolution
adopted a system model perspective and applied it to of the systems perspective as a result of various
the legitimation, design and implementation of their innovation policy dance configurations” (p15), and
innovation policy. Still, in spite of the conceptually more in detail, explores the rationales for public
accepted importance of the system model, in reality innovation policy intervention in the system approach,
policy makers still rather derive innovation policies the functionality of innovation systems as a rationale
from a linear model perspective. Why? and guide to innovation policy, and the interactive
According to this book, the reason is that “the learning of innovation theory, policy and practice
popularity of the linear model not only is caused by taking the Swedish agency for innovation systems as
the lack of practical alternatives, it also reflects the an example. The third part investigates “an inevitably
tendency of bureaucratic organisations to segmentate heterogeneous variety of ongoing and new issues” (p15)
interlinked fields of action in order to minimize of innovation policy, and in particular, deals with the
the span of control and responsibility” (p460). relationship between innovation and small and midsize
Moreover, the popularity of the linear model may be enterprises in terms of innovation dynamics and policy
compounded by weaknesses of system model itself strategies, the regulatory policies and framework for
like these: “the still too static nature of the innovation supporting innovation, the interdependence between
systems approach, the underdeveloped insight in the civilian and military innovation systems, the demand-
role of actors at the micro level, how they are framed oriented innovation policies, the service sector
by the system and – in turn – impact on the system innovation, the evolution of innovation paradigms and
and the consequences for policy in terms of concepts, innovation related policy instruments. The fourth part
strategies and instruments” (p458). focuses on “the new dynamics in the innovation policy
This book sees innovation from the view point of dance partly as a consequence of mutual learning,
interaction among three dancers and even defines it partly due to changes in the external environment”
as the “‘innovation policy dances’ between innovation (p17), and more specifically, addresses the relation
practice, theory and policymaking” (p7). Is the IPT of innovation and inequality, the contribution of SI
metaphor useful? Why is the IPT metaphor used while (Strategic Intelligence) to IPT taking TA (Technology
the border lines between IPT remain blurred and the Assessment) as an example, the system-evolutionary
domains of IPT are overlapping? approach for innovation policy, the differentiation
The answer to this question relates to the three between strategic policies and systemic instruments.
major goals of the book: “First, to improve and The book ends with an overall summary and outlook.
update our understanding of the interactive relationship The authors claim to have presented “a coherent,
between innovation policy, theory and practice. theory-based vision of the interrelated dynamics of IPT
Second, to search for options that can improve the rather than to provide an all-encompassing review of
added value, effectiveness and efficiency of policy and the state of art of IPT” (p14).
innovative practice. Third, to offer critical perspectives Notwithstanding its several virtues, the weak point
to inform ongoing discussions about the dynamics of of this book is that it concentrates on European cases (and
innovation systems and related policies, as well as to some North American experience). Other cases, like
generate questions that can guide future research” (p450). East Asian countries, are not covered. This bias may
The extent to which these goals are accomplished be understandable given that this book was published
depends on the judgment of readers. as a part of the PRIME series on research and
The book consists of four parts. The first part refers innovation policy in Europe (PRIME was a EU-funded

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 Book Reviews

‘Network of Excellence’ on research and innovation our knowledge of innovation systems. For practitioners,
policy). However, the absence of other countries’ cases it shows how policy and theory are developed and
still remains the weak point considering the subtitle of applied to the private and public spaces of innovation,
this book, ‘an international research handbook’. like firms and government institutes, and how relevant
Notwithstanding this shortcoming, this book can results of innovation evolving.
be recommended to policy makers, scholars, and
practitioners. For policy makers, it provides conceptual
knowledge and a lot of examples of innovation policy Reviewed by Jung-Jin Hong
occurring in other countries. These examples will help Korea Basic Science Institute (KBSI), Daejeon,
them to design relevant innovation policy approaches Korea, jjhong@kbsi.re.kr
for their countries without wasting much cost and &
time. For scholars, the book suggests plenty research Science, Technology, and Policy Studies (STƏPS),
topics to be handled in the future in order to extend Twente University, Netherlands, j.hong@utwente.nl

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