A catalytic and evolutionary approach to horizontal technology policies (HTPs)

This paper presents an evolutionary framework for horizontal technology policies (HTPs) especially market-friendly ones involving project-based incentives (e.g, R&D project based grants rather than tax-based incentives to yearly expenditures on R&D). HTPs are a category of technological policies whose objective is to promote technological development per se, and associated management and organizational routines, irrespective of industrial branch or technological area. They are being increasingly adopted by both advanced countries and newly industrialized countries in response to the new opportunities and threats opened up by the technological revolution and by the processes of liberalization and globalization; and they complement the more specific and well-known selective and vertical policies aimed at individual sectors and technologies. The analysis is conducted within a learning-to-innovate framework with emphasis on collective, organizational learning; search; and market-building. The outcome is a technology policy cycle with distinct infant, growth, and mature phases, Proactive 'generation' of a critical mass of projects for efficient learning and diffusion of innovation routines becomes the aim of the infant phase; while the mature phase of the policy should focus on policy restructuring including drastic reductions in the support of routine projects and enhanced support of more complex types of innovation. The paper also emphasizes the importance of a neutrality component in incentives in the infant phase of increasing selectivity; and of building policy capabilities for efficient policy design and implementation.