Austria 2025 – A New Strategic Innovation Policy Framework. Addressing Structural Change and Upgrading

Innovation is increasingly seen as the dominant policy to address both economic and societal objectives. As a survey of the innovation policy literature in this paper shows, performance goals for innovation efforts are usually very general, framed as increasing the rate of innovation activities or as changing the direction of innovation activities towards specific societal goals. We argue that there is a middle layer missing in the hierarchy of performance goals, a layer which connects bundles of individual policies and the overarching country-wide innovation performance. Recent research suggests that the economic effects of innovation must be reflected at the sectoral level in either structural change towards knowledge-intensive sectors or upgrading within sectors towards more knowledge-intensive segments. We propose to investigate whether this way of measuring innovation outcomes – which we call the innovation frontier – is a suitable focussing device for innovation policy-making at the national or regional level. The paper outlines the conceptual basis for further more empirically oriented research.