Integration of Trend Monitoring into STI Policy

Chapter
Part of the Science, Technology and Innovation Studies book series (STAIS)

Abstract

Monitoring trends is a key requirement for national and corporate policy makers to stay up-to-date with socio-economic and technological transformations, to anticipate emerging developments at the global and local levels, and to use this intelligence to prioritize areas for innovation and investment. This chapter aims at discussing how the results of trend monitoring can be integrated into the process of Science, Technology and Innovation policy formulation and business Research & Development planning processes. The chapter starts with an overview of the relevant innovation literature that gives a background in a broader theoretical context, where the technology monitoring activities can be better justified conceptually. This background provides to generate two models, which will portray positioning and functioning of Global Trend Monitoring in the policy and business planning process. Some practical aspects of how and in what form the results of Global Trend Monitoring should be provided to the target communities of policy makers and business planners are elaborated throughout the chapter.

Keywords

Trend Trend monitoring STI policy R&D strategy Innovation system Corporate strategy 

2.1 Introduction

The recent decades of innovation studies have been largely devoted to seeking the instruments of how countries and corporations can boost their socio-economic and technological performance while recognizing the differences between various innovation systems. The identification of the close relationship between technological progress, economic growth and societal well-being has attracted increasing attention both from scientific and expert communities as well as political and business leaders around the world. After several technological waves (information and communication technologies, biotechnology, nanotechnology and others), it has been observed that some countries have significantly increased their economic and political power, while the others have been followers or left behind. Consequently, the importance of technological progress has been noted both by scholars and practitioners who witness a rapidly changing world where breakthrough products and services create new markets and cement the dominant position of the leaders.

In this context, it has been viewed that mid- and long-term planning as well as the study of long term futures play critical role in ensuring successful national and business development. Policy makers, business leaders, and experts engaged to elaborate tools and methods that would allow them to look into the long term future, develop long term scenarios, articulate visions and roadmaps for strategies. Drucker (1964, pp. 15–16) noted:

That executives give neither sufficient time nor sufficient thought to the future is a universal complaint… The neglect of the future is only a symptom; the executive slights tomorrow because he cannot get ahead of today… The future is not going to be made tomorrow; it is being made today, and largely by the decisions and actions taken with respect to the tasks of today. Conversely, what is being done to bring about the future directly affects the present. The tasks overlap. They require one unified strategy.

Since the beginning of the 1960s, foresight has been increasingly understood as a systematic and participative policy and strategy making approach with a long term perspective beyond usual time horizons for planning. One of the main motivations is, as Drucker stated, to create the future and bridge the future with the present. Foresight practitioners typically look into next 5–50 years, or longer depending on the focus of the study, to search for signals of change, and to identify opportunities and threats which the future may bring. Future-oriented knowledge gained through foresight is used to generate ideas about innovations and emerging technologies, which will be demanded in the future. This intelligence will be applied by the countries and companies, which wish to be on the leading side of technological, social and economic developments. The value of foresight exercises also lies in the way that the activities are inclusive and participative and bring a wide variety of stakeholders involved in science, technology and innovation (STI) and R&D systems together for collective visioning and mutual learning towards and common vision and priorities. The strategic decisions are made through consensus in a transparent process.

The process consists of a set of consecutive actions, including: (1) Intelligence (scoping, surveying), (2) Imagination (creativity, modelling), (3) Integration (visioning, priority setting), (4) Interpretation (planning, strategy making), (5) Intervention (action) and (6) Impact (evaluation), with a continuous process of (7) Interaction (participation) (Saritas 2013).

The process begins with the Intelligence phase, which involves a comprehensive understanding, scoping and scanning exercise. This is the phase, which created foundation for an evidence-based inquiry in a foresight exercise. Trend monitoring activities lie right at the beginning of this process. Monitoring allows capturing the major trends, which may be observed in social, technology, economic, environmental, policy and values/culture (STEEPV) systems, and may have potential implications for STI policy and strategy development. Most promising STI areas can be identified through the monitoring activities and can be prioritized based on their potentials to boost growth in the next decades while generating wealth, improving quality of life and environment.

Therefore, it is important to understand how the results of global trend analysis can be integrated into the actual policy making and strategic planning process to ensure that nations and companies make the right decisions in their pursuit of global leadership. The present chapter investigates the mechanisms of such integration and proposes analytical frameworks that would point potential gates of policy system in which the findings and visions emerging through trend monitoring can be incorporated into the actual policy making and strategic planning process.

Trend monitoring is frequently associated with technologies. This is due to the assumption that technology is one of the key drivers of progress in many spheres of life and it has a strong role in the process of national and corporate development and analyzing the socio-technical interactions and national policy systems. Many technological trends provided by the trend monitoring activities have national importance given their scale and large impact on the transformation of entire national innovation systems (NISs), which makes it critical to study how the knowledge about these technological systems can be integrated into the national innovation policy as well as corporate strategies. It should also be noted that the framework can be extended to cover not only technology trends, but also broader socio-economic trends. Therefore, the term ‘trend monitoring’ is used to cover identification, description, assessment and communication of all trends, which may be of relevant for public or private policy purposes.

Thus, Sects. 2.2 and 2.3 of the chapter embed the current topic in the innovation literature. Section 2.2 argues why technology and innovation are becoming increasingly important in the process of societal development and economic growth both at the national and corporate levels. Section 2.3 looks deeper into the national and technological innovation system approaches and notes the complementarity of policy approaches that demonstrate the importance of focusing both on systemic and technology-specific policies that are largely guided by the results of foresight and understanding of which STI areas are worth investing today.

Section 2.4 suggests an analytical framework for integrating the results of trend monitoring into the S&T policy making process. It studies the policy system and estimates the role of trend monitoring as an exogenous factor.

Section 2.5 looks at the linkages between the results of trend monitoring and business strategy planning processes. It also suggests a systemic view where trend monitoring is exogenous and guides the business strategists to make the right choices and decisions.

Section 2.6 elaborates on the practical aspects of delivering the results of trend monitoring to the policy makers and business planners in terms of how and in what form the results should be communicated to them and can be further used in the policy and strategy planning process.

The final section concludes the chapter by summarizing the major arguments. The major findings emphasize the critical importance of trend monitoring for the national and corporate development because the knowledge gained through this exercise is tightly bound to the issues of economic and corporate growth and societal well-being. The trend monitoring is closely related to the needs of policy makers and business planners and has multiple impacts on the policy and corporate planning process. The chapter finally presents various ways of communicating the results of technology monitoring.

2.2 Theoretical Foundations

Saritas and Smith (2011) consider trends as representatives of the broad forces and complex factors, involving diverse actors that lead and cause change in STEEPV systems with dynamic characteristics, until succeeded by others. They are typically experienced by everyone or a majority in more or less the same contexts insofar as they create broad parameters for shifts in attitudes, policies and business focus over periods of several years, and may have a global reach.

Monitoring trends is essential for STI development, which has firmly entered into the policy agendas and business strategies of the world’s top nations and companies in recent decades (Mikova and Sokolova 2014). Today, the majority of policy makers understand the importance of promoting the advancements in the STI domains on a permanent basis, and falling behind in the pace of innovation is viewed as a definite failure in the national or business development.

Several theoretical and empirical reasons can be suggested for positioning STI development in the heart of countries’ economic growth and societal well-being. From the economic theory perspective, Solow (1956) and Romer (1986) discussed the significance of technical progress in economic growth. Solow concluded that only 10 % of growth in the United States in 1909–1949 was ascribed to the increase of capital per worker while the rest 90 % were due to a variety of factors with a prominent impact of technical progress. Romer (1986) further endogenized the factor of technological advancement in his model of economic growth, which made the role of macroeconomic, science, technology and innovation policy yet more important in promoting national development.

Much earlier Schumpeter (1942) named innovation as the major driving force of market economies. The capitalist growth is driven by technological leaders and a large group of imitators who push the countries to develop. The stages of economic growth are replaced one after another by the process of creative destruction when a monopoloid company beats its competitors by destroying the present market conditions and creating an absolutely new reality where it possesses indisputable competitive advantages.

Proceeding from these and other economic findings, Freeman (2002) and Lundvall (2007) picked up on these and worked continuously to integrate the concept of the NIS, discussed below, with the theory of economic growth. Freeman (2002) studied the British, US and catching up countries’ NISs and concluded that “technical change and the institutions which promoted it played a central role both in the forging ahead process and in the catching up process” (p. 208).

The Russian scholars have also noted the great importance of technological change in promoting political and economic leadership. Bogaturov (2006) identified five key factors that define the world leadership of nations: (1) military force, (2) economic might, (3) organizational resources, (4) science and technological strength, and (5) creative potential. All these factors are seen as highly dependent on the national innovation capabilities and therefore provide a clear link between the innovation potential and national leadership in the contemporary world.

Military force of state and non-state actors depends on the level of military and dual-use technologies. Key international players continue to increase their military research and development (R&D) expenditures1 (e.g. US—from $43.3 bn. in FY2000 to $71.9 bn. in FY2007). Persistent growth of investment in the sphere led to creation of new weapons, which hold incomparable advantages over former weapon generations.

Economy is also dependent on innovative potential of states and non-state actors. States dominated by secondary and service industries are far ahead in comparison with those where the primary sector prevails.

Organizational resource is a complex of soft-power instruments used by states and non-state actors to strengthen their position on the world stage. In this regard one group of actors may use its sophisticated ICTs to manipulate public opinion and wage effective information wars. In contrast, the rest of the world, which does not possess any advanced technologies, practically ends up out of the world political process as it proves to be unable to establish coalitions of states and unite specific groups of people.

STI strength is by definition dependent on innovation. Public and private investment in high-tech industries brings much dividend, and successful start-ups turn into large corporations with significant level of capitalization.

Finally, creative potential is an ability of state, transnational corporations (TNCs) or other non-state actors to generate innovative ideas, which have enough market value to become a profitable product, process or service. Possession of such potentials gives incommensurable advantages to global leaders in inventing advanced technologies and making great scientific discoveries.

In the private sector research, development and innovation have also attracted much attention on the part of business and management scholars. The S-curve studies have proven that only technological excellence can allow companies to lead the market (Harvard Business Essentials 2003). The model (Fig. 2.1) vividly shows that if companies are unable to predict the emergence of new products and services they are bound to fall behind.
Fig. 2.1

S-curve: a business view of technological change. Source: Hinks et al. (2007)

The problem becomes even more topical given that many technologies and products require long time to develop. For example, the aviation industry has the product life-cycle of 15–25 years, while microelectronics changes every 7–9 months. Paradoxically, the shorter is the product life-cycle the harder it is to compete and keep up with the leaders—i.e. if a company lags behind for a year it has already missed at least two product cycles while in aviation it would have an opportunity to accelerate the development in the remaining 14 years.

Thus, socio-economic and technological progress and national development are closely interlinked. This explains the increasing attention of the national governments and companies around the world for monitoring trends in all domains of society, technology, economy, environment, politics and values/cultures and exploring opportunities and threats for STI development. Whether undertaken by public or private institutions, trend monitoring involves:
  • Trends analysis with the examines a trend against its nature, causes, speed of development, and potential impacts.

  • Trend analysis monitors specific trends with particular importance to a specific theme or sector and reports to key decision makers.

  • Trend projection requires the use of quantitative data and extrapolation to portray the evolution of trends through time from the past into the future.

  • Trend simulation is concerned with the modeling of a set of trends as a system with their interactions, which may help to develop future scenarios.

  • Trend strategy aims at developing policies and strategies for increasing the benefits or mitigating the negative impacts caused by the trends.

The following sections will discuss and provide models on how these activities can be undertaken for the purposes of public STI policies and corporate R&D planning.

2.3 National and Technological Innovation Systems: Complementarity of Policy Approaches

Since the 1990s many governments and international organizations have adopted the concept of NIS that helps them identify the major strengths and weaknesses of their innovation strategies and formulate better science and technology policies. The NIS approach was developed by Lundvall (1985, 1992), Freeman (1987, 1995), Nelson (1993) and Edquist (1997), and has since been embraced by many research schools and international organizations such as the Organization for Economic Co-operation and Development (OECD), the European Commission, and UNCTAD.

In basic terms, the approach combined several theoretical constructs that explained the foundations of the innovation process at the national level. First, it provided a route from systems of production toward systems of innovation by integrating Leontief’s input-output analysis with innovation and entrepreneurship. Secondly, it developed a better understanding of the international trade specialization by combining it with the studies of the home-market economic systems. Thirdly, it explained the role of interactive learning in various national contexts. Finally, the concept reinforced the role of institutions in fostering innovation.

As a result, the innovation researchers have got a neat model of the national innovation development explained by both the structural elements of the national economy as well as network and institutional interactions between its agents. Traditionally three major actors (the triple helix) have been assigned to play the primary role of producing and promoting innovation: the government, private sector and universities. In this system the government supports basic science, carries out research and development and formulates and implements research and innovation policies; private sector produces innovation, invests in the applied research and ensures competitiveness of the country in the domestic and international markets; academia conducts broad range of research, provides training to future innovators via universities and consults other players on policy and strategy issues. However, more recently society has emerged as a strong player in innovation. Better informed and networked society has now got the power to influence public and corporate innovation and to innovate itself. Therefore, it is also crucial to monitor the developments not only in technological and economic spheres, but also the ones related to the socio-cultural evolution.

The technological innovation systems (TIS) approach came as a separate concept in the 1990s and 2000s (Carlsson and Stankiewicz 1991; Carlsson and Jacobsson 1997). Carlsson and Stankiewicz (1991) suggest that the technological systems should be analyzed both at the structural and functional levels with specific focus on institutions, networks and actors. They define technological system as a “network of agents interacting in a specific economic/industrial area under a particular institutional infrastructure and involved in the generation, diffusion and utilization of technology” (p. 94).

More recently, there has been a trend to use the TIS approach more actively in analyzing technological transition and radical change in the socio-technical environment. Markard and Truffer (2008) specified the concept of TIS by including only those groups of actors, networks and institutions that are “supportive to the innovation process, i.e. that share the goal of furthering at least some variant of the socio-technical configuration.” Although this approach makes the model more precise analytically, it practically fails to capture the dynamics of the system, where the actors can change instantaneously their attitudes towards any specific variation of the new technology by modifying their strategies, switching to technological alternatives and redirecting the money flows due to competition, changing market configuration or other reasons.

Dolata (2009) continues with a discussion of transformative capacity, adaptability and gradual transformation of a technology for achieving sectoral development. Generic technologies can be considered to be strategic to support TISs. For instance, nanotechnologies can be instrumental to achieve transformation in multiple other disciplines and commercial applications due to its multi-purpose characteristic. Such technologies may push the entire innovation system onto a new development trajectory given its exceptionally large scale and scope.

Finally, the study presented in this chapter builds upon the notion of innovation policy that has emerged in the last two decades (OECD 1997; Smits and Kuhlmann 2004; Metcalfe 2005). Broadly understood as STI policy, it includes a set of various measures that serve the ultimate goal of promoting innovation and supporting innovation actors to increase their learning and interaction with other agents of the system primarily universities and research labs. The development of the NIS approach led to the emergence of the concept of system failure that prescribes the policy makers to repair the functions and institutions of the entire national innovation system rather than be guided by the simplistic market failure approach (Smits et al. 2010).

The problems remain with distinguishing STI policies from all other policy domains, especially industrial and education policies. Flanagan et al. (2011) provide a deep study of the so-called ‘policy mix’ that focuses on “the interactions and interdependencies between different policies as they affect the extent to which intended policy outcomes are achieved” (p. 702), and aims to bring together the entire variety of government measures that have an objective of fostering innovation development.

2.3.1 Policy Complementarities

Proximity of the NIS and TIS approaches has lately led to an understanding that the generic STI policies aimed at shaping and improving the NIS and the technology-specific policy instruments should be viewed as complementary. Indeed, as already mentioned above, it is recognized that some technologies have such a large transformative capacity that they can push entire national economies onto a new development trajectory.

Technology-specific policies are definitely guided by the vision of which STI areas will be most valued in future and will ensure the best return on investment. In this regard the forward-looking vision and technology anticipation provide precious information about the future technological developments and identifies the key directions where the nations and companies have any chance of surpassing the leaders and forging ahead.

Certainly, the trend monitoring activity represents only one of the elements of successful STI policy making and should be complemented by a comprehensive and constantly updated analysis of the NIS, its strengths and weaknesses as well as other foresight methods and tools that will provide a more detailed vision of how the future should be shaped in an inclusive and action-oriented way.

In this context trend monitoring provides a good vision of mega- or macro-trends and STEEPV areas that are worth investing. However, it does not look into the micro-level of specific applications that should be supported by nations and companies through individual projects. Therefore, it is a great platform for seeing the future on the whole and clustering the most promising technological areas but its results require further study and development that foresight centres can provide by using their additional expertise and competences.

2.4 Analytical Framework for the Integration of the Results of Policy Trend Monitoring into the Process of STI Formulation

This model proposed in this paper considers a systemic interaction between the results of technology monitoring and the STI policy making processes. A model is devised with the purpose of capturing most important aspects of the STI policy formulation and view the results of trend monitoring as a major input into the policy making process.

For the purpose of the present work the output of trend monitoring is considered as an exogenous variable that influences the entire policy system in general rather than each of its individual elements in particular. Further work can be done to endogenize the factor of trend monitoring into the STI policy making process at every stage. However, this will require a much more detailed analysis and deeper research. It is worth noting that a similar work took more than 30 years to endogenize the factor of technological progress into the model of economic growth as described in Sect. 2.2. The same process was witnessed in the policy studies when it took the same 30+ years to open up Easton’s ‘black box’ (1957) and start looking into every policy element individually. So, it is obviously not a trivial task.

It should be noted that this work focuses only on the policy formulation mechanisms while the integration of the results of trend monitoring into the process of STI policy implementation and policy evaluation could require further elaboration and action. The analytical model discussed here certainly includes certain feedback loops that are linked to the policy evaluation process. Moreover, it is recognized that the knowledge of the future gained through the trend monitoring activity influences all actors who design and implement the policy as well as those who appear to be the primary objects of the public activity at every stage of the policy process. However, the scope of the present study does not cover an in depth analysis of this interaction to the extent of studying the behavior and impacts of every particular element and stakeholder.

All in all, the model presented in Fig. 2.2 involves a cyclical policy system that can be described in the following way: Input (trend monitoring) ➔ Prioritization ➔ Policy formulation ➔ Output (policy implementation) ➔ Policy evaluation ➔ Feedback loop.
Fig. 2.2

An analytical framework of the integration of results of trend monitoring into the STI policy process. Source: adapted from Klochikhin and Saritas (2011)

As already mentioned, the main focus is concentrated on the element of policy formulation while other components cannot be omitted from the analysis due to the complexity of political reality.

The study also recognizes the importance of strategic prioritization when governments define the major goals of national development and feed them into the actual policy formulation. Due to its macro nature, trend monitoring plays a critical role at every stage of the policy process providing the decision makers with knowledge about the future that can guide them in their choices and prioritization process.

Despite the purposefully simplified view of the model, it is obvious that the interaction between stakeholders at every stage of the policy process is not unidirectional. There are multiple feedbacks that are attributable not only to the entire system but are also observed at every stage of the process. For example, the general policy/national development priorities may be determined by political leaders. It is then the other relevant ministries, government agencies and other actors of the NIS take these into account those priorities as a guide when formulating priorities and policies in their respective domains.

In this context, future intelligence gained through trend monitoring is likely to influence the policy process in several ways. What is important to note that the process does not merely go top-down, but also bottom-up, where the long term visions and priorities of the top level are combined with the technical and practical knowledge, experience of the actors performing STI tasks, and the expectations of the broader society. Providing input for such an inclusive process, the monitoring activity considers a broad range of trends which may stem from or have impact on broader set of STEEPV systems.

Furthermore, similar feed-backs and feed-forwards between those who formulate policies and those who implement them will take place. The local practitioners, who start putting the policies into action interact with various agents (firms, research organizations, education institutions, etc.) that ideally participate in the process in the form of a foresight exercise, contribute for the shaping of the future STI policy and take active role in the implementation of results.

The actual impacts of the trend monitoring activities and the mechanisms of translating intelligence into action can be observed and measured at the STI policy evaluation stage. First of all, it is important to develop appropriate evaluation criteria for monitoring the impacts of trends. For instance, if the focus is on technology trends, indicators such as market size, technology readiness level, and R&D intensity can be used as parameters. However, there are challenges with the evaluation process too. Cause and effect relationships may not always be clearly identified, even if quantitative indicators such as market size are used. Therefore, the major difficulty for the evaluation phase is to give an objective and deliberate view of the policy implementation process. In such an effort, work undertaken by the evaluators might be unable to make an adequate assessment of what is communicated to them from different locations due to the influence of exogenous factors such as local cultural and institutional contexts that can vary from, for instance, one city/region to another.

Thus, there is much complexity involved in the policy process, and the results of trend monitoring might have enormous impact at every stage of policy making, implementation and evaluation. As the scope of the present study does not cover an analysis of the role of stakeholders in the system and the impacts of trend monitoring on each of them, it has the following assumptions:
  • Every stakeholder operates with the same results of trend monitoring as all other stakeholders.

  • No stakeholders has any additional knowledge about the technological area or economic sector where these results can be applied in the policy making process.

  • The factor of time lag in communication of national priorities to the actual policy makers and further to the policy practitioners and other stakeholders is disregarded due to the fact that the rapid development of STI in the contemporary world can change the views of policy makers in a very short time period.

These assumptions allow the present study to present a generic framework, while writing off the issue of policy governance that can complicate it to a very large extent. Policy governance practically reflects the ability of policy originators to communicate their goals and aims to the stakeholders involved in implementing the respective public activity so that the latter embrace precisely the visions and policy tools prescribed by their leaders. These issues have been touched upon earlier during the discussion on the multiple feedbacks that guide the policy making process and determine the communication routes from the political leadership to the bureaucracy and vice versa. However, the area of policy governance presents so many challenges and uncertainties that it deserves a separate study rather than be discussed in full detail here.

2.4.1 Impacts

In basic terms, trend monitoring influences all stages of the policy process by providing intelligence about the future that is important in setting STI priorities, strategies and investments. More specifically, the following impacts of the trend monitoring activities can be mentioned on the policy making processes:
  • Increasing awareness of existing and emerging trends: The social, technological or economic, monitoring trends gives opportunities to policy makers to stay up to date and ahead of developments; and to take the advantages or mitigate the impacts of what is likely to emerge in the future.

  • Providing policy makers with tools for prioritising potential opportunities and threats and allocating resources to increase the ability to capitalise on, protect against, or mitigate the impacts of Grand Challenges and related potential disruptions. Thus, trend monitoring provides a solid foundation of awareness about trends, which may bring confidence to exploit benefits and take risks. Networking with key players by providing information about top countries, companies and institutions; funding organisations; potential collaborators and key people among the other stakeholders.

  • Increasing the lead time to plan and address potential disruptions and making necessary political and strategic adjustments in the light of emerging trends and developments.

  • Understanding trends to distinguish real trends from hypes.

  • Ensuring higher level of stakeholder engagement in the policy making process by involving key stakeholders and wider society in trend monitoring activities. Consultations with practitioners, scientists, researchers, experts and other stakeholders give policy makers an opportunity to make more informed decisions.

  • Making the policy making process more transparent. Trend monitoring provides objective information about the technological trends and usually makes it public. This information might prevent bias towards openly unreliable project implemented by cronies and corrupt scientists while supporting genuinely scientific and prospective endeavors.

  • Providing alternatives for technologies, strategies and policies. These may be unfamiliar to policy makers. The results of the project can point at technological substitutes when policy makers can choose one area out of three alternatives that would be most valuable economically and socially for a specific country.

2.4.2 The Structure and Functioning of Trend Monitoring for STI Policy Making

Aforementioned discussion aimed at showing the multiple impacts of the trend monitoring process almost at every stage of the policy process starting with the identification of general policy priorities at the top political level to more strategic and operational level decisions at the lower levels.

At the stage of general policy prioritization, trend monitoring provides valuable information to the political leadership, for instance, about the potential competitors in a certain S&T area, and prospects of a particular technology as compared with other alternatives. Given this information policy makers can stack up these prospects and results of competitive analysis against the social and technological capabilities of a particular country to understand whether they have enough potential to keep up with or even surpass the major competitors as well as make the best breakthrough in a particular technological area. At this top level the major outputs are usually the lists of critical technologies or priorities set forth by the political leadership.

The next level of prioritization goes down to industrial, STI, and education policies, most relevant to the issue of S&T progress. At this level, policy makers at the ministries and central/federal government agencies make a decision on the major priorities at the areas of their competence. Typically, these policy makers have much more special knowledge about particular sectors and technologies and can use the results of trend monitoring more efficiently.

The model presented here does not include any further disaggregation of the policy system to particular sectors (e.g. electronics, energy, chemistry, etc.) and regional policies. The impacts of trend monitoring on the policy making process at these levels are similar to the upper levels. However, it should be noted that the sectoral and regional policy making process has its own peculiarities, which are worth studying to increase the use of technology monitoring output and achieve higher impact.

In general, it would be proper to suggest that the level of ministries and other central government agencies should be the major target of experts running the trend monitoring activities. This proposition is explained by the focus of trend monitoring on the technologies of a relatively macro level without going deep into analyzing the particular applications of these technologies in certain products and services.

Meanwhile, focus here lies with the area of STI policy. As illustrated by the model in Fig. 2.2, STI policy represents one of the main areas of application of trend monitoring results together with industrial and education policies. All these policy domains represent a ‘policy mix’ aiming to promote innovation at the national level. In this mix policy makers usually interact between each other and set forth a range of overlapping priorities that serve the goals of creating an efficient national innovation system.

The STI policy formulation is usually carried out in the ministries of science and affiliated government agencies. The policy makers are aware of particular technologies and production methods that define the national innovation development. The major goal of these bureaucrats is to foster innovation proceeding from the assumptions put forward in Sect. 2.2, i.e. promote technological progress as an important means of supporting economic growth and societal well-being.

Technology monitoring activities provide further information about particular technologies and their alternatives that allow policy makers to understand what areas are more worthy investing rather than the others. Technology monitoring also engages broader expert community into the policy formulation process by putting the decision makers at one table with scholars and researchers who might have a say in defining the priorities and supporting particular projects. By this extensive engagement in the policy making process experts can make STI policy more responsive to the views of wider public and make the policy formulation more transparent with only most promising projects gaining needed support.

After the policy is formulated, it is communicated down the bureaucratic system where other professionals start implementing it engaging with many stakeholders whose interests are satisfied (or dissatisfied) by a particular policy. At this stage trend monitoring provides background knowledge about the technologies and their applications to the operational specialists who can use it to properly understand the policy details and requirements and make the proper actions while implementing the policy prescriptions.

In the meantime, the results of trend monitoring become critically important at the policy evaluation stage. The evaluators need to see the bigger picture of the technological development and estimate whether the decisions and choices were made correctly and communicated properly to the operational bureaucrats. Moreover, the policy evaluation would be more legitimate if it engages the expert community.

2.5 Integration of Trend Monitoring into Corporate R&D Strategy Planning

Although corporations and governments share many concerns when it comes to developing long term strategies and policies using broader foresight and trend monitoring activities, significant differences exist in terms of the scale of activities and how the future-oriented intelligence is used for strategy development and planning. In order to understand how trend monitoring may serve for R&D in corporations, it is important to first discuss the nature of innovation at this level.

The major difference lies in their primary missions: governments strive to shape an efficient national innovation system, while corporations usually aim at increasing their shares and profits in domestic and international markets. Sometimes the size of corporate operations may exceed the scale of a national innovation system, such as in the case of large multinational corporations (MNCs), such as General Electric, Siemens, or Unilever, which have a large variety of products and services in their portfolios.

In corporations, the nature, scale and culture of innovation are quite distinct compared to the national innovation systems. The visions and missions of corporations are better defined with a clearer scope in sectoral or service-oriented activities, whereas in national governments strive to manage all the sectors and services in the economy are focused in a broader stance with less clear boundaries. Higher precision of the commercial mission and corporate culture allows companies to sustain a better control over operations and employees, thus makes management of innovation relatively less complex and challenging than at the national level.

Corporations and governments also differ in their structural patterns. Nation states have to cover a large set of issues including social development, healthcare, and education. These areas of social life are extremely wide and concern a number of different actors with a wide variety of expectations. Companies typically have the opportunity to be more focused with a clear remit of promoting innovation and gaining the market leadership.

Considering the more precise and lean organizational structures of corporations and their R&D activities the following model can be suggested at this level (Fig. 2.3).
Fig. 2.3

An analytical framework for the integration of trend monitoring into corporate R&D planning process. Source: Adapted from Klochikhin and Saritas (2011)

Due to the aforementioned differences between governments and corporations in terms of the scope and scale of innovation activities Fig. 2.3 illustrates a more focused and clear arrangement in the ways trend monitoring activities can be integrated in to the R&D planning processes.

The interactions between different components and functions in the system are more direct and dynamic, and this enables faster decision making and more efficient management of innovation activities. This is necessary for remaining competitive in fast evolving markets.

In corporations, trend monitoring activities may be undertaken by a dedicated strategy department with the participation of relevant corporate stakeholders ranging from different levels of management, operational units, suppliers, and clients among the others. The activities can be undertaken in conjunction with the corporate foresight activities. Ideally, the results are communicated equally to all corporate stakeholders irrespective of their position in the company, hierarchy and responsibilities.

2.5.1 Impacts

As in the case of the policy making process, the results of the trend monitoring create a normative environment that may give companies a number of opportunities. These may include:
  • Generating ideas and identifying opportunities by studying trends by analyzing various sources of data (publications, patents etc.). Beating competition by anticipating emerging developments before the others and creating enough lead time for action.

  • Balancing strategic goals by making decisions for longer term, which also helps to prevent any short-termism and low profit investments with no long term returns.

  • Providing alternatives for technologies, strategies and policies. These may be unfamiliar to policy makers. The results of the project can point at technological substitutes when policy makers can choose one area out of three alternatives that would be most valuable economically and socially for a specific country.

  • Assessing strategic options by benchmarking alternatives and possible market shares to be generated by them. The results of trend monitoring may hint corporations what choices they should make today to be the market leaders tomorrow.

  • Developing new partnerships by studying other relevant products, services, actors and networks in the value chain. For instance, corporations might find potential partners in other countries and cluster around certain production method based on our analysis.

Providing stakeholder and society engagement in the process may prevent any serious backlash against the products and services provided by corporations.

2.5.2 The Structure and Functioning of Trend Monitoring for Corporate R&D Strategy

The corporate decision-making process includes multiple levels. The major decisions are typically made by a board of directors and concern the mission and organizational structure of a company. At this stage trend monitoring has strong potentials for influencing critical decisions. The corporate leaders might develop a strategy to create a new division, task force, or a project team to elaborate on a particular technology that is emerging and promising. Business leaders may consider re-allocating certain resources from one project to the other based on trend monitoring. Furthermore, new societal needs can be identified, as indicators of future markets, and some environmental concerns can be addressed as a part of Corporate Social Responsibility (CSR). Trend monitoring might create an environment that would homogenize the views across the company by providing an unbiased analysis of what technologies should be supported and which ones should be dropped. Therefore, the results might be used as an important argument in the corporate planning process. For instance, structural adjustments are usually tightly bound to the business strategy. It is a complex set of ideas and visions that guide the company to retain/gain market leadership. As a rule, business strategies comprise several sub-parts including the technology strategy, production strategy, business development strategy, marketing strategy, sales strategy, etc. All these strategies are represented and lobbied by particular divisions inside a corporation. They usually overlap in their understanding of the future and solutions to gain the best results but may also contradict each other significantly. It is a primary task of the chief executive officer to decide what opinions and ideas are most relevant to the corporate mission and trend monitoring can be a crucial support instrument for this purpose.

Another critical aspect of strategic planning is the decision on whether to innovate or not that is bound to the overall business strategy. This decision begins with a normative analysis provided by trend monitoring and helps to analyze if the company is already well-off with certain technologies or needs to invest more into the ongoing projects with a need for faster and more aggressive innovation in order to keep up with the competitors. If the company pursues a decision to innovate, then the type of innovation is to be decided—whether it will be a product, process, or service innovation, or any combinations of them. Trend monitoring will be able to help as a decision support tool to position the company, which strategy to pursue. This is an extremely critical decision, especially considering that innovation and R&D are usually rather time and resource-consuming. Making such critical decisions will require trend monitoring to be used with further competitive and market analysis conducted within the company and/or by other external consultants.

Like in the policy process, companies conduct regular strategy evaluations. These evaluations are crucial for companies given the highly volatile and dynamic market environment. Likewise the national level, at the corporate level, the results of trend monitoring can be fed into the evaluation process with some experts potentially employed as external reviewers.

2.6 Incorporating Trend Monitoring into Policy and Strategy Making Processes

Setting up a trend monitoring system is certainly an important first step to grasp existing and emerging developments in a wide variety of domains. However, it is not enough. Trend monitoring should be incorporated into the policy and strategy making process so that the results can be disseminated effectively by the clients of the activity. Typically, the trend monitoring team plays an instrumental role in transmitting the outputs through formal deliverables or by actively engaging in the policy and strategy making processes. The present study identifies four ways of incorporating the trend monitoring activity into existing structures. From more simpler and direct to more sophisticated and desirable levels, this incorporation may be in the forms of:
  1. 1.

    Communication

     
  2. 2.

    Participation

     
  3. 3.

    Experimentation

     
  4. 4.

    Integration

     

Each form of incorporation will be described below.

2.6.1 Communication

In this form of interaction the results of trend monitoring are provided to national and corporate policy makers through a direct communication. This can be done through open or confidential reports, publications, joint workshops and meetings, as well as by personal contacts and interactions. By means of this interaction trend monitoring results are publicized with the aim of providing information and intelligence about major trends to relevant parties, who can further use it in the policy making and strategic planning processes.

Trends can be communicated in the form of reports on trends or regular briefs about important and emerging trends. Information may be included about the title and description of trends; their impacts; where they originate from and where the impacts can be observed by considering the STEEPV systems; their relationship to other mega trends and Grand Challenges; geographical impact (i.e. global, national or regional); industries, sectors and research areas where the actions can be taken. Further information can be included to indicate the markets, products, technologies and R&D areas related to the trend; possible counter-trends; and enablers and barriers which may affect the trends’ development trajectory, among all other relevant indicators depending on the needs of the national and corporate policy makers.

Disseminating intelligence about the existing and emerging trends will provide crucial input for future-oriented policy and strategies, competitiveness analysis, and identifying partners and designing networks for future collaboration. Companies can also use this knowledge to carry out a technology assessment and make better choices.

2.6.2 Participation

In this form of interaction the trend monitoring team is closely cooperating with policy makers and corporate planners. This may be in various forms. They may be working together as a team, or may play the role of consultants, reviewers, or policy/strategy evaluators. In this case the trend monitoring team has a more central role in policy and strategy making process. By this active participation into the policy and strategy making process, the technology monitoring provides input from a broader range of STEEPV systems and represent the visions and concerns of the wider public, stakeholders, and consumers in the case of corporations, who play a major role in the areas of concern. They deliver new knowledge and normative views to the policy makers in a more context aware and inclusive policy making process.

2.6.3 Experimentation

Trend monitoring may be also used at the later stages of the policy and strategy formulation to validate the findings and decisions. In this form of interaction members of the trend monitoring team and experts involved in experimental processes. They may participate as evaluators and reviewers before, during and after the policies and strategies are put into practice. They can also participate in pilot projects, living labs, or review the strategic choices made.

2.6.4 Integration

The role of integration is two-fold: First, the trend monitoring function is integrated physically into the policy making and corporate planning process, which goes beyond merely experimentation and evaluation. By integrating the trend monitoring function in the form of experimentation, a real time input can be provided through the feed-forward and feed-back of intelligence gained, which will allow more focused and target oriented monitoring efforts. Meanwhile, a real-time input can be provided to increase the evidence-base of policies and strategies. This is the type of interaction, which creates the highest level of impact from trend mining to policy and strategy making. The ultimate aim of trend monitoring activities should be to achieve this sort of engagement with a close proximity to decision making structures.

2.7 Conclusions

This chapter has developed a methodological framework for the integration of the results of trend monitoring activities into the processes of STI policy formulation and corporate R&D planning. Two models were provided that view the results of trend monitoring as an exogenous factor influencing all relevant stakeholders equally and disregarding the time lags in communication of the results to different levels of decision making. It is assumed that the model can be developed further to endogenize the factor of trend monitoring and study its impact on every stage of the policy making and business planning processes.

Overall, the impacts of trend monitoring on the policy making and corporate planning process include generation of intelligence about the future and creation of a normative environment that can guide government and corporate policy makers to formulate better decisions and priorities by considering what is likely to emerge; increase public and stakeholder engagement; provide better transparency of the policy processes and undertake more comprehensive competitive analysis.

In practice, the results of trend monitoring need to be delivered to the target audiences of policy makers and corporate planners. The present work has identified four different levels for this process, ranging from mere communication, to more active participation, collective experimentation, and efficient integration. Depending on the purpose of the activity, the roles and interests of the stakeholder groups, and level of engagement needed one or more of means of communication can be considered for dissemination and feedback.

As a final point, it is important to highlight that trends data should be based on reliable sources. Although a wide variety of information sources ranging from structured scientific and academic databases to semi- or un-structured information in websites, blogs, social networks, or reports can be used during the trend monitoring activity, and a wide variety of tools and applications are available for bibliometric, scientometric and semantic tools, it is important to ensure that the source of information is credible and acclaimed to provide a better evidence base and less, or, if possible no, hypes by mainstream media and discussions. Due to increasing amount of information and data are produced, and the importance of anticipating what might emerge in the future is becoming more crucial, trend monitoring activities are becoming not an option, but a must for both public and private policy and strategy makers.

Footnotes

  1. 1.

    US Department of Defense’s expenditures for military research has reached 63bn USD in 2014. http://archive.defensenews.com/article/20140420/DEFREG02/304200006/DoD-Reshapes-R-D-Betting-Future-Technology. Accessed 9 August 2015.

Notes

Acknowledgements

The author’s contribution was produced within the framework of the Basic Research Programme at the National Research University Higher School of Economics and was supported within the framework of the subsidy granted to the HSE by the Government of the Russian Federation for the implementation of the Global Competitiveness Programme. The publication draws upon an earlier work by Klochikhin and Saritas (2011), “Development of an approach for the integration of the results of the Global Technology Trend Monitoring into the S&T policy formulation process”, an unpublished report produced for National Research University Higher School of Economics, Moscow.

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Copyright information

© Springer International Publishing Switzerland 2016

Authors and Affiliations

  1. 1.Institute for Statistical Studies and Economics of KnowledgeNational Research University Higher School of EconomicsMoscowRussia

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