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2.1
Figure 1.4 Overview of Policies for the Innovation System
Source: Adapted from IIASA (2012)
Policies supporting the supply of innovations or the development
of technologies include investments in R&D, intellectual property
protection, laboratory and testing infrastructure, training and skills
development, university–industry collaborations, formal and informal
mechanisms of knowledge exchange, and technology roadmaps to
guide the direction of innovation, and financial incentives such as tax
credits for private investments. Not all innovation, however, stems
from formal research and development activities. Problem solving and
incremental improvements in existing technologies are also of great
importance and can be stimulated and supported by public sector
policies that lead to the creation of outreach, extension, and technical
support programmes. Policies supporting the demand for innovations
as commercialized technologies include demonstration projects,
public procurement, market niche creation (e.g., supply obligations),
and the creation of appropriate market incentives. Market incentives
may be created via changes in relative prices (e.g., environmental taxes
or feed-in-tariffs), standards, and regulations. These supply push and
demand pull policies are context-specific complements rather than
substitutes. Innovation success stories are typically characterized by
comprehensive and consistent policy support throughout the entire
innovation process (see Figure 1.3). Particular innovation policies
Chapter 1  Low Carbon Technology and Innovation Policy 39
Figure 1.4 Overview of Policies for the Innovation System
Source: Adapted from IIASA (2012)
Policies supporting the supply of innovations or the development
of technologies include investments in R&D, intellectual property
protection, laboratory and testing infrastructure, training and skills
development, university–industry collaborations, formal and informal
mechanisms of knowledge exchange, and technology roadmaps to
guide the direction of innovation, and financial incentives such as tax
credits for private investments. Not all innovation, however, stems
from formal research and development activities. Problem solving and
incremental improvements in existing technologies are also of great
importance and can be stimulated and supported by public sector
policies that lead to the creation of outreach, extension, and technical
support programmes. Policies supporting the demand for innovations
as commercialized technologies include demonstration projects,
public procurement, market niche creation (e.g., supply obligations),
and the creation of appropriate market incentives. Market incentives
may be created via changes in relative prices (e.g., environmental taxes
or feed-in-tariffs), standards, and regulations. These supply push and
demand pull policies are context-specific complements rather than
substitutes. Innovation success stories are typically characterized by
comprehensive and consistent policy support throughout the entire
innovation process (see Figure 1.3). Particular innovation policies
Chapter 1  Low Carbon Technology and Innovation Policy 39
