The primary objective of the group is to identify and research core issues for modern innovation policies. The basis of the group's work is the recognition that science, technology, and innovation are fundamental to economic growth and social development. Yet the context of research, innovation, and economic policies has changed sharply in recent years, and this new context presents new challenges.
The new policy context results from a number of related technological and economic developments. Firstly, there have been major scientific and technological changes, particularly in generic technologies such as IT, materials, and - most importantly - molecular biology and biotechnology. Secondly, there have been profound changes in the economic policy environment - integration of capital markets, rapid growth in direct foreign investment, deregulation, and general internationalisation. There have been serious economic problems: persistent budget deficits and unemployment in the advanced economies, and continuing poverty and deprivation in much of the developing world. Thirdly, environmental problems and constraints have become much more severe.
Finally, there have been significant shifts in our understanding of the relationships between science, technology, and the economic and social world. In the past, relationships between science and society have often been thought of in an oversimplified way. In particular, it has often been suggested that scientific discovery is a precondition for innovation, and that social and economic innovations are based primarily on research activity. Recent research has however emphasised the fact that knowledge creation and innovation are far more complex than this simple approach. Two results of modern research on science and innovation are particularly important. The first is that the creation of new technological knowledge may often involve research, but it is not necessarily based on research. The second is that the creation of knowledge, and the process of innovation (both in industry and the wider social system) involves interaction and feedback between different types of actors, and different social institutions. In particular, innovation does not result simply from a transfer of knowledge from the science system into applications. Such insights have been the driving force behind changed approaches to policy, especially at the European level.
These developments mean that policy-making has entered a new phase. On the one hand, science and technology policy can no longer be thought of purely in terms of research policy. That is, policy-makers are looking beyond research programmes which aim simply at the development of new scientific and technological principles and results. It is necessary to focus also on the interactive creation and use of science and technology, by companies and by society as a whole. This leads directly to a need to know more about the distribution of knowledge, and about the role of non-research factors in innovation processes. At the same time there is at present an increasing emphasis on the social and economic relevance and impact of research, and on the factors which shape this impact. All of these considerations pose serious challenges for innovation policy-makers. The primary objective of the STEP Group is to explore the implications of these multi-faceted changes.
What kinds of approach are relevant to analysis of the policy challenges of the new economic and technological context? Our view is that technological change must be seen as endogenous to economic processes, as one component of the drive for competitive advantage by firms. In searching for new products and processes, firms are in effect introducing variety into the system, often in circumstances of great turbulence and uncertainty. This introduces an evolutionary element into economic dynamics, and the group therefore takes a broadly evolutionary perspective on economic change. At the same time, it is clear that firms rarely innovate in isolation; on the contrary, they work within complex networks or systems of knowledge creation, which include universities, research institutes, regulatory bodies, and other public agencies. We therefore tend to take a systemic view of innovation, which makes no sharp distinction between public and private, but which focuses on the scope and characteristics of public-private interactions. This means that members of STEP tend to approach problems of the creation of technology from a framework which strongly emphasises the social and economic context of innovation as a basic determinant of both the direction and content of innovation.