Design Principles for National Innovation Agencies in Social Market Economies

Abstract

This paper reports on a design science research project that develops a design framework for national innovation agencies in line with the principles and values of the social market economy. The study conceptually examines the tension between the state’s interventions in the economic process to foster technology-based innovation and the social market economy’s pursuit of a privilege-free and competitive economic order. The chosen design science approach encompasses five steps: problem definition, diagnosis, solution design, evaluation, and learning. Based on the design requirements and case studies of four existing national innovation agencies, the study suggests twelve design principles for national innovation agencies. Drawing on feedback from leading German economists, the paper proposes general lessons for implementing innovation policies in social market economies, using the CIMO logic. This study contributes to the knowledge base on how to support technology-based innovation through national innovation agencies and provides practical implications for policymakers and innovation agency executives.