The Public Governance of Anticipatory Innovation Ecosystems in Latvia

5. Action points for Latvia to become a frontrunner in the development of anticipatory innovation ecosystems

Abstract

A combination of interviews, literature review and action research in Latvia has enabled the identification of specific action points for Latvia to become a frontrunner in the development of anticipatory innovation ecosystems. This chapter lists key action points and proposes responsible stakeholders.

Action points for Latvia

The opportunity to collaborate with LIAA and ecosystem stakeholders in Latvia has resulted in rich insights to inform Latvia’s evolving management of innovation ecosystems and demonstrate how they can be leveraged to build the anticipatory capacity of government.

These findings are summarised in eight points below. Each is accompanied by a set of suggested action points to enhance the governance of innovation ecosystems in Latvia and unlock their potential to make government more anticipatory and proactive. Where relevant, these are listed under specific meso‑governance functions.

Meso-governance findings

1) Understanding and expectations of anticipatory innovation ecosystems are not aligned across government, and not well communicated to potential ecosystem partners

Workshops and interviews with stakeholders from government and ecosystems revealed that there is optimism about the potential of innovation ecosystems in Latvia, yet there is little agreement on the types of impact they can generate or shared understanding of the process or time-frame for ecosystem development. As a result, commitment to supporting and engaging with ecosystems appears to be weak among actors in government, research and industry.

Action points for Latvia

Championing

• Enhance buy-in to anticipatory innovation ecosystems by educating senior government stakeholders about:

  • The benefits of anticipation, such as enabling a range of actors to converge on a shared vision for future change and stress-test strategies, as well as the limitations, notably that anticipatory approaches do seek to result in an accurate prediction of the future (see Chapter 1 for more detail).

  • The benefits of open innovation to leverage the knowledge, know-how and expertise of diverse stakeholders.

  • The importance of process-oriented formative evaluation to support ecosystem development. Formative evaluation is focused on assessing the ways that an ecosystem functions so that improvements can be made for it to continue achieving its potential. More detail is provided in Chapter 2, and a formative evaluation toolkit was developed for Latvia as part of this project (see Annex A and Box 2.9).

• Build legitimacy for anticipatory innovation ecosystems through clear and coordinated communication and commitment from the Ministry of Economics. Continued political support, as highlighted in the case of the JIC Regional innovation ecosystem in Czechia (see Box 2.10) and the BioWin ecosystem of Wallonia, Belgium (see Box 2.8) where the Minister of the Economy played a key role in supporting the cluster over a twelve-year period, is identified as a crucial driver to encourage engagement from ecosystem partners.

Framing

• Engage the Innovation and Research Governance Council to develop a coherent theory of change for the development of anticipatory innovation ecosystems as an overall programme of work, clearly promoting the use of anticipatory approaches and identifying desired impacts and alignment to policy priorities. This could involve working backwards from the goals outlined in the National Industrial Policy Guidelines for 2021-2027 to discuss and determine intermediary outcomes and how different stakeholders might collaborate to achieve them so that a shared understanding of the innovation ecosystem programme can develop. At a larger scale, the example of Lithuania (see Box 1.7) shows how this participatory approach facilitates alignment and the identification of cross-sectoral priorities.

• Develop a concrete method to select and prioritise anticipatory innovation ecosystems for LIAA to work with, such as combining strategic foresight with analysis of potential ecosystem stakeholders in Latvia. Box 2.3 provides an overview of the benefits and challenges of different methods with summary case studies. For example, mixed-methods (combining statistical analysis, interviews and SWOT analysis) have been used in several regions to develop R&I strategies and select innovation ecosystems.

Monitoring

• Innovation and Research Governance Council to agree on a monitoring and evaluation framework to determine when support should be withdrawn from ecosystems. This might combine the formative evaluation tool (see Annex A and Box 2.9) with economic development analysis.

  • Assess the success of LIAA’s involvement with innovation ecosystems based on its continued maintenance and development of the four micro-governance processes, as opposed to innovation measures such as patents. As processes are undertaken by ecosystem partners, LIAA's involvement can be reduced.

  • Conduct economic development analysis of ecosystem areas every three years to monitor the impact of the anticipatory innovation ecosystem approach. Indicators might include number and volume of foreign direct investments, ecosystem participants’ turnover, employment, productivity and export growth, R&D activity, number of new markets accessed, number of new products, services and solutions developed (see Box 4.3 for the example of Business Finland).

2) The level and type of support provided to anticipatory innovation ecosystems in Latvia is insufficiently aligned to their needs, unresponsive to changes in their requirements, and poorly coordinated across government stakeholders

Interviews with ecosystem stakeholders revealed that they feel the government and LIAA are not responsive enough to the developing needs of the ecosystems, and that the role of ministries in each ecosystem is unclear. Workshops and interviews with public sector actors identified between the capacities of LIAA and the role the organisation is expected to play in the support of ecosystems.

Action points for Latvia

Providing

• Ensure that the commitment to support the development of anticipatory innovation ecosystems does not overreach the government’s capacity to do so by prioritising and focusing efforts on a limited number of ecosystems.

• Ensure at a minimum one full-time coordinator per ecosystem, either by assigning this responsibility within LIAA or providing external funding. Once ecosystems have a clear engagement structure and defined objectives, it is advisable to seek additional support to undertake more substantive analysis. This can include, but is not limited to horizon scanning, trends analysis, identification of weak signals, monitoring of successes and failures in the sector in other countries, data-driven comparison of Latvian research and business with international peers.

• Create a clear, multi-year, time bound commitment from the Ministry of Economics of funding and human resources support for each innovation ecosystem.

Framing

• Create a clear mandate for the Innovation and Research Governance Council to continually steer anticipatory innovation ecosystem support.

• Ensure that the innovation ecosystem programme is clearly connected to government priorities.

Orchestrating

• Undertake regular meetings of the Innovation and Research Governance Council with clear objectives to support ecosystem development.

  • LIAA to present:

    • Key insights generated through ecosystem activities, including ecosystem challenges and needs and anticipatory insights.

    • Monitoring information about the four key ecosystem micro-governance processes.

  • Ministries and Science Council to:

    • Communicate policy priorities to LIAA so that these can guide ecosystem goals.

    • Frequently collaboratively identify how ecosystem needs can be addressed through coordinated government activities, using the meso-governance functions framework.

    • Coordinate to identify and develop funding opportunities for innovation ecosystems.

    • Consider how insights generated by ecosystems should inform government policy.

• Identify new funding structures to so that elements of ecosystem support and orchestration can be outsourced in order not to overburden LIAA. There needs to be sufficient resources to assign one full-time coordinator per ecosystem and potentially additional analytical support once the ecosystem is more mature (see under ‘providing’ above).

Regulating

• LIAA and Innovation and Research Governance Council to work more closely with regulators to develop new approaches to regulation which can facilitate innovation such as regulatory sandboxes. Regulatory sandboxes have been used in a number of countries, including Singapore and the UK, to provide support to organisations so that they can test potential innovations and enable regulators to understand their implications in an isolated and controlled environment (see Box 2.12 on anticipatory approaches to improve regulatory agility).

3) The connections between existing resources, initiatives and funding and the anticipatory innovation ecosystem programme are insufficient

Consultations with ecosystem actors identified coherent and consistent funding as a key issue for the development of anticipatory innovation ecosystems in Latvia. This can be partially addressed by developing enhanced funding intelligence and coordination at the meso-governance level.

Action points for Latvia

Funding

• LIAA should document existing resources and build intelligence on funding that is relevant for the development of ecosystems, including work with Competence Centres, Clusters and KICs.

• The Innovation and Research Governance Council should consistently work to identify relevant resources and funding opportunities for ecosystem needs.

4) Structures and processes for feeding insights generated by anticipatory innovation ecosystems into public sector decision processes are not sufficient to enhance Latvia’s innovation system and anticipatory capacity

In spite of previous activity with ecosystem actors as part of the RIS3 programme, through clusters, competence centres and KICs, knowledge from these initiatives has not been systematically gathered, shared and acted upon in a coordinated fashion by government actors. Staff turnover within LIAA contributes to a situation in which new initiatives are undertaken with little knowledge of similar programmes.

Action points for Latvia

• LIAA to invest in developing institutional memory in order to connect ongoing and future ecosystem initiatives to past efforts and develop capacities for ecosystem management. For example, knowledge management to include documentation of tools and methods used and the insights they generate, monitoring of ecosystem micro-governance processes and formative evaluation of so that effective interventions can be identified and developed (see Annex A and Box 2.9).

• Build understanding in LIAA and the broader Innovation Research and Governance Council of how to use and apply anticipatory knowledge and approaches, such as visioning to explore preferred futures and horizon scanning to identify future changes and stress-test strategies (see the example of the Baltic Ro-Ro Shipping Ecosystem in Box 1.6).

• LIAA to leverage the knowledge generated by the anticipatory innovation ecosystems to produce a regular horizon scan of opportunities and threats for innovation in Latvia directed at policymakers (the example of the Emerging Technologies Radar in Box 2.11 shows how such information can help achieve policy objectives). The Innovation Research and Governance Council should feed this knowledge back into policy.

• LIAA to produce an annual report on challenges and opportunities for innovation ecosystems in Latvia based on an assessment of their strengths and possible future changes.

Micro-governance findings

5) Ecosystem partners recognise the potential of anticipatory approaches to promote coordination and innovation, but their knowledge of and capacity to facilitate these methods is limited

Many ecosystem actors understand the value of structured and guided collaboration to access additional knowledge and to make the ecosystem more than a sum of its parts, and respondents to the formative evaluation largely agreed that the foresight workshops resulted in an improved understanding of the trends and drivers that may affect their work in the future. However, knowledge of anticipatory approaches among ecosystem partners is fragmented at best, and short-term concerns and financial barriers hinder their application at the levels of individual organisations and the ecosystems.

Action points for Latvia

• Develop skills within LIAA to design and deliver relevant in-person and online workshops which enable the development of micro-governance processes and the generation of anticipatory knowledge, for example developing capabilities in workshop facilitation and strategic foresight.

• Focus on developing the capacities of LIAA on the following functions:

  • Stakeholder engagement and coordination

    • Identify and engage relevant stakeholders, using methods such as stakeholder mapping and engagement plans.

    • Facilitate ongoing collaboration between ecosystem partners by building their capacity for collaboration.

  • Anticipatory knowledge generation and management

    • Select relevant anticipatory tools and methods to generate useful knowledge about the future, for example horizon scanning and roadmaps (see the example of the Baltic Ro-Ro Shipping Ecosystem in Box 1.6).

    • Collect, analyse and provide each ecosystem with information they have identified as relevant.

    • Generate and manage insights from ecosystem interactions (e.g. workshops) to inform future ecosystem decision-making.

  • Educate ecosystem partners on the benefits and limitations of anticipatory approaches, such as enabling a range of actors to converge on a shared vision for future change and stress-test strategies, as well as the limitations, notably that anticipatory approaches do seek to result in an accurate prediction of the future (see Chapter 1 for more detail).

6) Ecosystem partners require clarity about the purpose of ecosystem activities to maintain engagement and trust in the anticipatory innovation ecosystem approach

While ecosystem partners found the workshops undertaken as part of the project valuable, they felt that that one-off events have limited impact on the collective innovation processes. Systemic and regular ecosystem engagement and management is necessary to support collective innovation. To build trust and confidence in the approach, these engagements should be clearly connected to desired ecosystem goals.

Action points for Latvia

• Each ecosystem should collaboratively develop a theory of change so that the purpose of activities is clearly understood and connected to ecosystem goals. The example of PhotonDelta in the Netherlands (Box 2.7) shows how the development of this type of shared resource can enhance ecosystem agility and legitimacy.

• LIAA to apply the micro-governance framework to prioritise activities for the development of each ecosystem.

• When engaging ecosystem partners, LIAA should:

  • Ensure that the purpose of each innovation ecosystem engagement activity is clearly articulated in advance, and that participants are given time to prepare.

  • Clearly communicate the next steps and follow-up strategy for knowledge generated through ecosystem activities.

  • Ensure that insights generated through innovation ecosystem engagement activities are analysed and communicated back to ecosystem partners in a timely manner.

  • Assess perceptions of each ecosystem activity through the formative evaluation framework in order to inform future activities (see Annex A and Box 2.9).

7) LIAA has limited human resources, analytical capacity and expertise to deliver on its mandate and support the development of anticipatory innovation ecosystems

Based on consultations with policymakers, LIAA and ecosystem actors, LIAA currently does not currently have the resources required to meet the expectations placed on the organisation by high-level policy objectives; namely, to coordinate joint ecosystem activities and the development of ecosystem strategies across multiple ecosystems. As a public administration organisation with minimal options to recruit employees with the knowledge, LIAA faces issues developing the skills and experience required to orchestrate innovation ecosystems successfully.

Action points for Latvia

• Assess existing capacity of LIAA to support ecosystems, and prioritise the selection of the number of ecosystems that match the capacity so that the organisation is not over-stretched. Prioritisation should be informed by factors such as policy priorities, potential value-add of the ecosystem approach, and level of ecosystem partner engagement. Prioritisation is a political decision and could be undertaken through the Innovation and Research Governance Council.

• Identify available capacity both within and outside of LIAA to perform the main functions of ecosystem orchestration to develop micro-governance processes. Distribute responsibility between actors so that LIAA can leverage existing resources to its optimal capacity.

  • Identify and work with key actors who can take responsibility for specific micro-governance processes.

  • Consider funding respected stakeholders in academia and/or private sector to take on the role of ecosystem coordination and leadership.

  • Identify new funding mechanisms to outsource responsibilities from LIAA.

• LIAA to identify and connect with similar ecosystems internationally to enable peer learning with Latvian ecosystems.

8) Key ecosystem stakeholders are not consistently engaged

Ecosystem actors found that there was not consistent attendance from other key stakeholders, hindering the development of action plans and making decisions.

Action points for Latvia

• Communicate high level commitment to ecosystem support by assigning an ecosystem leadership function to a senior executive in LIAA.

• LIAA to develop engagement plans for key stakeholders which take into account the drivers and barriers to their participation.

• LIAA should ensure that the value of ecosystem participation is clearly communicated to stakeholders, and that clear insights and next steps from each ecosystem engagement are identified and shared.