Demand- and User-Driven Innovation

There is nothing in the logic of innovation that leads to emphasizing the supply of or the demand for novel ideas. Arguing for either side is misguided. The two sides are complementary. Thus, we welcome the balanced view implied in Finland’s new innovation strategy (Aho et al., 2008), although we disagree with some of its policy premises and recommendations. The primary goal of demand- and user-orientated innovation policy is to have (private) input and output markets that celebrate innovation.The tools to achieve this are mostly indirect. Intense competition is the key. Laws, regulations, and standards are important. The role is direct when there is demand (generation) by the public sector (including public procurement) and/or supply by it (public goods and services). As far as direct public support of private innovative activity is concerned, our advice is to be impartial to the source, type, and application domain of innovation. To the extent this is not the case, we recommend adjusting towards impartiality. Demand and user orientation in innovation policy is consistent with promoting market entrants and radical/disruptive innovation.