Rhonda Roberts, "Policy formation and public participation in the management of technological change", in Brian Martin (ed.), Technology and Public Participation (Wollongong, Australia: Science and Technology Studies, University of Wollongong, 1999), pp. 195-208.

Policy formation and public participation in the management of technological change

Rhonda Roberts[*]



This chapter questions the primacy of "competitive advantage" in directing the management of technological change at the expense of accessibility, accountability and public participation. This primacy has embued modern innovation management theory since Schumpeter's work in the 1930s. Since that time an array of innovation management technologies have been produced for use by business and government which ostensibly contribute to their ability to compete. One such technology has been the high technology incubator or innovation-intense environment (IIE). There are many ways such a technology can be designed and this chapter explores models which could be used to encourage public participation, rather than just focus on the achievement of maximum competitive advantage.


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Policy formation by government and business on the management of technological change has to be a key topic in any discussion of public participation. Despite continued criticism of the lack of accountability in the development and use of new technologies, democratic access to policy formation in both government and business sectors has grown very slowly and, in some vital ways, only superficially.

One reason for this relative stasis has been the popular acceptance, particularly since the 1980s, of the overriding importance of national competitive advantage in global markets.[1] This emphasis on the threat of international competition and possible lowering of national standards of living has tended to marginalise questions about the place of the democratic process in the direction of technological change. Whilst some superficial concessions have been made to public concerns, for the most part policy formation is informed and in fact defined by the relatively new academic discipline known as innovation management. Its specific function is to "arm" government and private sectors in their international economic battles for market share.

The very positively named innovation management discourse, which is informed by a number of disciplines including economics and geography, services the competitive aims of government and business. In doing so this group of theorists and advisers has come to limit the way in which the management of technological change can be articulated and the kind of policy instruments produced. Core assumptions made by these theorists--about what should be considered as "innovation" or appropriate technological change and how it can be gained--have limited modelling of the process and hence what policy instruments are produced and how they are used. In the quest for competitive advantage, the issue of public participation has been marginalised. This chapter examines assumptions inherent in innovation management theory, discusses alternative views of the process of technological change, and compares policy instruments produced using differing views on the "appropriate" nature of innovation.

Growth of interest in innovation management

Interest in innovation management has grown for a number of reasons. The general restructuring of business since the 1970s away from resource-intensive and into knowledge-intensive industries has made it an integral part of corporate activity. In particular there has been an increasing emphasis placed upon the role of innovation management in the formation of corporate competitive strategies.[2] Government as well has become interested in innovation management. In the 1980s, the economic expansion of countries such as Japan and Germany and the perceived decline of the US set in motion a search for new policy directions. The ability to manage technological change has became closely identified with national strength,[3] spurring research into the elements which have appeared to compose "the competitive advantage of nations."[4] The drive for competitive advantage by both government and business sectors has fostered the formation of a modern discourse on innovation management. In turn contemporary innovation management theory has been dominated by the imperative to produce policy recommendations for business and government.

Underlying assumptions in innovation management

The importance of the relationship between patterns of technological change and economic activity has only recently gained acceptance in policy circles. In the immediate post-war period, the funding of science and technology, and more specifically defence, health and education programs, was rationalised in a variety of ways. The major shift has been that technological change is now increasingly seen as one of the main drivers of economic change and hence an essential part of policy studies. This new emphasis came about for a number of reasons, one of which was the "rediscovery" in the 1970s of work done more than three decades ago by Joseph Schumpeter. Schumpeter directly related changes in science and technology to business cycles making the management of technological change a central economic concern.[5] His work was enthusiastically taken up by policy experts seeking new ways of managing the economy and has become the foundation of a new economics-based science and technology policy discourse.

Schumpeter was concerned with explaining long term patterns in economic activity. He argued that past, large scale, economic boom and bust cycles had been brought about by a series of technological revolutions. While he emphasised the importance of the innovation process, he also stated that change in science and technology was only interesting when it was able to transform the outside world through the mediation of the marketplace. In other words if new products or processes were not successful in the market then their effects were not spread and hence did not create change. This emphasis on commercially "successful" products and the acceptance of the marketplace as a selection mechanism have became central to modern innovation management discourse.

As part of his research program Schumpeter began developing models of the innovation/commercialisation process. Whilst the two main examples he produced have since been heavily criticised, they opened the way for later developments in the field. Since the 1970s, modelling the process of innovation has become the core activity of innovation management theorists who seek to produce better policy instruments from their insight into the mechanism of technological change. By the 1980s, "the firm" had become generally perceived as the fundamental actor in the process of innovation and was placed at the centre of government policy instruments. Major reasons for this focus were the perceived success of Japanese industry policy in fostering their firms as "national champions" and a declining interest in funding basic science research and development (R&D). However eventually extensive criticism was made of the limitations inherent in focusing purely on the firm. It was proposed in the discourse that success came from many levels of activity including close government-business relations and general cultural factors.

The current fashion is to focus upon the national innovation system which has been defined as "[w]ithin any country, the range of institutions which contribute to innovation and the linkages among them..."[6] The concept of the national innovation system has become widely accepted as a conceptual basis for government policy formation and began appearing in government policy documents in the late 1980s. Discussion of national systems of innovation arose as a result of the international studies started in the 1970s, particularly of Europe, US and Japan. These studies led to a desire to include new factors such as culture, novel institutions and labour-management relations in modelling the innovation process. At present national system theory focuses on: national R&D structures including R&D performance in both the private and public sectors; management and labour milieus; the optimum role of government; national infrastructure; financial frameworks and the internal and external markets; and the effect of "culture" on successful commercial activity.

Major issues arise from contemporary innovation management theory and the concept of national innovation systems in policy formation:

(a) the general acceptance of the concept of the nation-state and "its" welfare as the most important policy focus;

(b) the nurturing of the firm as a "national champion";

(c) the acceptance of international competition as the legitimate driver of technological change.

The present focus of contemporary innovation management theory acts to move discussion away from public participation and accountability in the name of a new kind of international economic warfare, where the business sector has become the armed forces fighting for market share.

Who is "participating" and who is not?

In 1980 the "developed" countries controlled 93% of the total global R&D expenditure of US$200 billion.[7] Of this percentage the overwhelming majority of R&D was funded and performed by business with government coming in a distant second.[8] Despite the lead in funding and performance by business, internationally governments are increasingly directing their own efforts to enhance the capabilities of the private sector. This government support is in fact growing at a time when large corporations have been increasing their mobility of operations. In other words transnational corporations are in the enviable position of being able to locate their activities in the most favourable settings, and national governments are competing to maintain or attract their interest. Despite this situation there has been a growth in government policy which portrays firms as a kind of national "soldier" or champion in global economic competition.[9] This attitude has been bolstered by innovation management theorists who exhort the government to maintain business loyalty and GNP, by upgrading their support of commercial activity both financially and in their management of the national innovation system.

Nelson, a major theorist in the field, calls the association between national and firm interests "technonationalism," which he states combines "a strong belief that the technological capabilities of a nation's firms are a key source of their competitive prowess, with a belief that these capabilities are in a sense national and can be built by national action." He argues that this association of interests is a positive development.[10] Contemporary innovation management policy has hence systematised the alliance between government and business interests in the management of technological change.

In the concept of the national innovation system the whole nation becomes a medium for the cultivation of the innovative firm, making the needs of the private sector paramount. This formulation leads to a blurring of the distinction between public and private good and rationalises elite management of technological change. Robert Reich and Fred Jevons have noted the problems inherent in such an alliance on the grounds that while industry and transnational corporations in particular may well profit from government assistance, there is no way to ensure a return benefit to the general population.[11] The commercial orientation of contemporary innovation management theory has naturalised the promotion of the needs of the firm and made "market forces" or key innovative figures such as the entrepreneur or intrepreneur[12] the rightful determinants of technological change.

Though general attention to the innovation process has increased, in fact debate has narrowed. The aim of the exercise is without question competitive advantage. The participants in the process of policy formation are those experts who can best model the process by which this advantage can be gained. This connection between innovation and competitive advantage saturates the mainstream discourse. Michael Porter categorically declares that: "Technological change is not important for its own sake, but is important if it affects competitive advantage and industry structure." Such policy advisers have now become the equivalent of the nation-state's strategists in the global economic race.

Reopening the discussion

Radically different views on the management of technological change have been put forward over the years, though with very little effect on official policy formation so far. Boris Hessen began publishing on innovation a little before Schumpeter. Though his work was known, he was rejected by the dominant discourse as not contributing useful policy insights. Like Schumpeter, Hessen had been influenced by Marx's emphasis on the use of innovation management for the purpose of gaining advantage. In contrast though, Hessen adopted a more strictly Marxist approach and directly related changes in technology to the social relations of production. For Hessen, the owners of the means of production directly controlled technological change through their choice of which technologies could be developed and made available in the market place and used this ability to reinforce their power.[13]

Hessen's emphasis on issues of socio-economic power was renewed in the 1970s when strong criticism was made of the status quo by Ernest Schumacher. Schumacher argued that modern commentaries on technological change had been dominated by an inadequate model of economics which enforced competition and served the needs of a few first world industrialists.[14] Schumacher was similar to Hessen in arguing that the innovation process had been coopted by elite groups to maintain their position of power and further their profit-making activities.

Whilst many mainstream innovation theorists have attributed the problems of "less developed" countries to their inability to achieve technological and industrial "lift off" and hence enter the "race,"[15] Schumacher in fact saw the importation of Western technology and models of competition as the one of the main causes of these "problems." He argued that the importation of Western technology:

Unlike Hessen, Schumacher described an alternative model which he argued addressed issues of power and equity. He called for a new kind of innovation model, one which produced "appropriate technology." Schumacher defined as "appropriate" technology which had been developed to suit the needs of local users, allowed just and sustainable wealth creation, and was environmentally friendly. The process which would produce appropriate innovations was usually portrayed as having at least two stages: initial planning and then creation of an endogenous R&D system.

Stage One planning required:

Stage Two is the creation of an endogenous and "appropriate" R&D system through one or more of the following actions: changing indigenous technologies, adapting imported technologies, and/or creating new ones. The central action in Stage Two is the establishment of clear communication lines between users, researchers and government policy makers. Schumacher's work has been heavily criticised and rightfully so. For example the following points have been raised.

Another group radically questioning who may or may not participate in the direction of technological change is theorists working on the social shaping of technology. According to Robin Williams and David Edge in their overview of the field, social shaping theorists have by "rendering the social processes of innovation problematic ... opened up policy issues that have been obscured by technological determinism, and by related simplistic models."[16] Wajcman and Appleton, feminist authors working on the social shaping of technology, have raised questions, thus far not mentioned, about gender and participation in the "innovation" process.

Judy Wajcman states that gender is a central factor operating implicitly in the innovation process.[17] She argues that technology is constructed as a masculine preserve shrouded in a complex and strong masculine culture. While men have the ownership of this area, women can just "borrow" it rather than participate in its design and use. She argues that even when technology is within the traditional women's sphere of the home, women use it but men design and repair it. This estrangement occurs because of childhood exposure to technology, feminine/masculine role models, education and training, and segregation of the job market. This position on technological disempowerment leads Wajcman to argue that technology is shaped by men for their needs and with their priorities. She argues that women historically have not had access to the important social spaces in which design is determined. Hence men design for themselves and from their own perspectives. To support her position, Wajcman discusses the historical development of contraceptives which she argues have been designed by men for women to use. Specifically she sites the development of the pill and the IUD which despite the high risks are still two of the major methods used. Men, she argues, are designing with their own purposes and interests in mind. One of the few male contraceptives produced--the condom--was devised, Wajcman argues, not for birth control but for protection against disease.

Helen Appleton takes a different approach to Wajcman in two main ways.[18] She examines the situation in non-Western nations and does not set up women as outside of an existing technical culture but instead claims that both women and men use and design technologies and hence have different technical cultures. Appleton claims that both women's and men's relations to technology are shaped by the specifics of their circumstances but that they are affected differently by the same circumstance. For example in an LDC, national politics and economic measures affect each sex differently. National agricultural policies often act to move women out of that industry and allow men to dominate as officially designated "farmers." At the same time, the ability to design and learn to use new technology is limited by the amount of free time available for that purpose. Appleton claims that as women are labourers as well as being the traditional family carers, they have less time to learn about or design technology. Despite the degree of difficulty, Appleton argue that women still innovate but since they are operating in different areas to men, the innovations are not viewed as such. For example, innovations in home care technologies may be dismissed as trivial just as the labour itself is often "invisible."

Issues of public participation only arise when disenfranchised groups assert their right to participate in the process and subject the process of innovation to critical analysis. Without such questioning, the management of technological change remains a distant and mystifying phenomenon. To highlight the importance of reopening discussion of the innovation management process and the place of public participation and accountability, one of the most recent and high profile technology policy instruments--the innovation-intense environment--will be examined.

The shaping of policy instruments: innovation-intense environments

Innovation-intense environments (IIEs) are just one of a variety of relatively new strategies used to manage the process of innovation. IIEs are defined here as special environments which purportedly accelerate the rate of innovation and proliferation of new high technology products and industries. These developments can appear in a variety of forms ranging from small science and technology parks through to large scale science cities. Studies performed in the early 1990s list well over 500 such developments worldwide with the majority built since the early 1980s. IIEs are increasingly commanding vast amounts of resources. For example, a medium size IIE known as the Australian Technology Park was projected as costing A$400 million in 1994. The reasons for the growth in importance of IIE developments are quite complex but they are generally touted as a strategic weapon in the global race for competitive advantage. Whether IIEs actually perform this function or serve other more complex purposes is subject to debate.[19]

The development of an IIE design discourse has generally been portrayed as resulting from international interest in replicating the success of Silicon Valley in the 1970s and 1980s. Silicon Valley has come to be perceived as a role model for regional industrial development with numerous works published which purport to describe the critical mass of elements which made the area produce commercially successful innovation at a faster than normal rate.[20]

In designing IIEs, fundamental decisions are made about the nature of the innovation process and how it is best directed. Some of these decisions may well be implicit but still strongly influence the form and functioning of the IIE as a policy instrument. Below I will describe two very distinct "economic" approaches to IIE design.[21] These approaches are not meant to represent any specific theorist or existing school of thought, but merely broadly illustrate the way in which fundamental assumptions made about the nature of innovation can influence the design of policy instruments. Obviously many different factors, including funding sources, the political situation, and the cultural and economic context, to name but a few, influence IIE form.[22] But just for the sake of widening discussion, consider how different positions on what constitutes appropriate innovative activity may lead to different IIE designs.

A "green" economist following some form of sustainable development theory may define innovation as those changes which directly contribute to the "preservation of the environment" and the enacting of certain "principles of social justice." A "neoclassical" economist in comparison may be primarily concerned with increasing national GDP and the "trickle-down effect" and hence define innovation as commercially successful inventions. Both economists have inherent within their respective positions different ways of judging "success" and "failure." A successful innovation for the green economist would presumably contribute in some definable way to the preservation of the environment and/or greater social equity. The neoclassical economist may place a higher priority on financial profit or market advantage. Both ways of judging outcomes are legitimate within the internal framework of each position. However neither side's notion of success could be easily translated to the other's scale as different changes are being "measured," by different means.

IIE form reflects to a certain extent judgements made about desired outcomes and affects the IIE design process in several ways, including selection of areas for development, inclusion of necessary "elements," development of hardware and the control of information. In IIE design certain areas, industries or "problems" are chosen for investigation and development. For the neoclassical economist, the potential for commercial success would have to be a high priority in determining which R&D projects are handled and presumably such decisions would be based potential market performance. For the green economist, also depending upon their source and size of funding, the "market" may be less important than perceived environmental and social outcomes. Hence for the green economist, development of special solar power units may be a success, but the same item may be a failure in terms of cost for the other economist.

The selection and organisation of the constituent elements deemed necessary in the incubation process are influenced by the desired result. For the neoclassical economist, key figures involved would presumably include financial managers with a knowledge of "the market." For the green economist, another set of expert advisers would presumably be compiled. In terms of the actual hardware design of the IIE, different priorities would determine form. One IIE would presumably conform to conventional cost and efficiency criteria whilst the other may place more emphasis on considerations such as public participation in formulation of research goals, workers' needs, impact on local environment and gender power relations.

The final effect and one of the most important influences on IIE design is the position on control of information.[23] If the goal is to obtain maximum market return for investment, then under most circumstances the neoclassical economist would seek to tightly control information flows and maintain defensive intellectual property rights. By contrast, for the achievement of the goals of the green economist, sharing and diffusion of information may be considered of fundamental importance for the goals of the IIE.


Different views on who should participate in the direction of technological change and to what ends result in the formation of very different kinds of innovation policy and policy instruments. As shown above, participants' views on the appropriate goals of the innovation process directly affect the design and functioning of policy instruments such as IIEs. These views are of course informed by the wider social context. If "competitive advantage" is the central aim in innovating then "commercial" considerations will dominate the management of innovation and the direction of technological change.

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[*]Rhonda Roberts is a lecturer in Science and Technology Studies, University of Wollongong.

[1].For more details see R. Roberts, "Managing innovation: the pursuit of competitive advantage and the design of innovation intense environments," Research Policy, Vol. 27, No. 2, 1998, pp. 161-177.

[2].This rise has been noted by many including J. Utterback, "Innovation and corporate strategy," International Journal of Technology Management, Vol. 1, Nos. 1/2, 1986, pp. 119-132; R. Rothwell, "Developments towards the fifth generation model of innovation," Technology Analysis and Strategic Management, Vol. 1, No. 4, 1992, p. 75.

[3].Of course the management of technological change has long been identified as a source of national strength. Recent phenomena such as the use of R&D indicators by the OECD have formalised and quantified the connection.

[4].Michael Porter's work, in particular his book The Competitive Advantage of Nations (New York: Macmillan, 1990), has been considered by many as a major summary of factors leading to national industrial strength.

[5].J. A. Schumpeter, Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process (New York: McGraw-Hill, 1939).

[6].P. Hall, Innovation, Economics and Evolution: Theoretical Perspectives on Changing Technology in Economic Systems (New York: Harvester Wheatsheaf, 1994), p. 18.

[7].J. Annerstedt, "The global R&D system: where is the third world?," in J. Annerstedt and A. Jamison (eds.), From Research Policy to Social Intelligence (Basingstoke: Macmillan, 1988), pp. 129-141, at p. 134.

[8].Department of Industry, Technology and Commerce, Australian Science and Innovation Resources Brief 1992: Measures of Science and Innovation 3 (Canberra: Australian Government Publishing Service, 1992), p. 9.

[9].See R. Reich, The Work of Nations: Preparing Ourselves for Twentieth Century Capitalism (New York: Simon and Schuster, 1991).

[10].R. R. Nelson, National Innovation Systems (Oxford: Oxford University Press, 1993), p. 3.

[11].Reich, op. cit.; F. Jevons, "Who wins from innovation?" Technology Analysis and Strategic Management, Vol. 4, No. 4, 1992, pp. 399-412.

[12].Intrepreneur is the term generally used to refer to those staff members who operate as entrepreneurs within the structure of a large firm, in the service of that firm.

[13].B. Hessen, "The social and economic roots of Newton's Principia," in N. Bukharin et al., Science at the Cross Roads (London: Cass, 1973). Originally published in 1931.

[14].E. F. Schumacher, Small is Beautiful: A Study of Economics as if People Mattered (London: Blond and Briggs, 1973).

[15].This draws on Rostow's classic stages of "development" as described in W. W. Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (Cambridge: Cambridge University Press, 1964).

[16].R. Williams and D. Edge, "The social shaping of technology," Research Policy, Vol. 25, 1996, pp. 865-899, at p. 867.

[17].Judy Wajcman "Technology a/genders," in L. Green and R. Guinery (eds.), Framing Technology: Society, Choice and Change (Sydney: Allen and Unwin, 1994), pp. 3-14.

[18].H. Appleton "Gender, technology and innovation," Appropriate Technology, Vol. 20, No. 2, September 1993, pp. 6-8.

[19].Whether the present forms of IIEs (also known as high-technology incubators) can be judged as working in any absolute sense is another question. See R. Roberts "`Translating' the MFP: national innovation `problems,' high technology incubators and Australia-Japan relations," Prometheus, Vol. 14, No. 2, December 1996, pp. 207-232.

[20].A prime example is R. Miller and M. Cote, "Growing the next Silicon Valley," in T. Forester (ed.), Computers in the Human Context: Information Technology, Productivity and People (Oxford: Blackwell, 1989), pp. 470-480.

[21]See Roberts, 1998, op. cit.

[22]The form and functioning of IIEs cannot be adequately understood without reference to the social context in which they are designed. See Roberts, 1996, op. cit.

[23].Edward Blakely, an international IIE design consultant, emphasises the importance of this aspect, stating that the "real race is over the control of information not the use." E. J. Blakely, "The new technology city: infrastructure for the future community," in J. Brotchie et al., Cities of the 21st Century: New Technologies and Spatial Systems (London: Longman-Cheshire, 1991) p. 230.

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15 April 1999