How to Organize for Innovation: Entrepreneurial State and Organizational Variety

Research on how to effectively organize innovation policy has seemingly come to a consensus that decentralized, often peripheral, flexible and specialized organizations are superior to monolithic and hierarchical bureaucracies. These agencies are expected to both support innovation in markets through effective implementation of government interventions and, if necessary for the former task, also innovations in public policies, institutions and organizations. Yet, it is also recognized that policy innovations and effective implementation of policies may require organizations with different routines and capacities. We propose that we might gain a more systematic understanding of this governance challenge by focusing on the organizational morphology of innovation policy design and implementation and its evolutionary variety, or ability to sustain different policy and administrative capacities deemed necessary for effective innovation policy. We propose an analytical taxonomy that systemizes the diversity of organizational routines and capacities using the organizational configurations proposed by Henry Mintzberg. We illustrate through three critical cases that effective innovation policies are based on a variety of organizations with different routines and capacities. We also discuss the policy implications and avenues for further research.