21, January 2026

In 2026 THECIS celebrates its 25th anniversary. To celebrate this, we are starting a 25th Anniversary Blog series where we ask prominent individuals to write a blog to provide perspective on a topic related to innovation and entrepreneurship. This first Blog in the series is by Richard Hawkins, former Professor and Canada Research Chair in Science, Technology and Innovation Policy at the University of Calgary. It is the first in a three part series on the past, present and future of innovation policy.

The origins of Innovation Policy

As we approach the 25th anniversary of THECIS, I have been asked to set down some reflections on “innovation policy”, the central and constantly evolving mission of our organization. In this series of three short pieces, I will reflect on this evolution by commenting first on the origins of innovation policy, then on the state of the field today, and finally on the challenges it faces and the directions it seems likely to take.

The first question one must face in discussing policy for innovation is to determine exactly what innovation is. Because it is quite possible to discuss virtually everything that today we associate with innovation policy without any reference to innovation at all. In the 1930s, JD Bernal, who would go on to head up the British R&D effort in WWII, published The Social Function of Science. Contained in it was the first comprehensively worked out policy roadmap for facilitating the transformation of new knowledge into economic growth, prosperity and social well-being. In its roughly 500 pages, the word innovation does not appear once.

Indeed, the term is virtually absent in any public policy context until the 1950s, even though policies clearly aimed at innovation date back to the 19th century. Today, most of Bernal’s vocabulary would be associated with innovation, but mainly as a synonym for technology and/or science.  What then is the difference between innovation policy and policy for science, R&D, IP, education, health, or indeed for any activity involved in the production of wealth from knowledge? Any of these could be discussed adequately and in their entirety in their own terms.

One way to sort this out is to start with how national statisticians go about defining innovation. Expressions of this definition have changed many times, but the key principle has remained. An innovation is the “real product” of the application of knowledge to some useful purpose: “real product” meaning something that yields a real measurable socio-economic effect or impact in a real context, not just implicitly or in theory. So not an idea, discovery or invention, but the observable outcome of their application usually reckoned in terms of growth.

Government initiatives aimed at contributing to such outcomes constitute “innovation policy” in its broadest sense, but this has always existed as a portfolio of initiatives regardless of whether they are specifically linked with innovation. In the narrowest sense, however, innovation policy has come to refer to a specific sub-set of initiatives directed mostly at generating inputs – like ideas, discoveries and inventions – that have come to be associated and often confused with innovation. And almost invariably, inefficiencies in allocating resources towards this effort can be attributed directly to the confusion of inputs with outputs.

The idea that the production of new knowledge is related instrumentally to economic growth was never particularly prominent before the mid-20th century. The earliest antecedent is often accepted to be the Report on Manufactures (1791) by Alexander Hamilton who laid out plans to transform a post-colonial agrarian America into an industrial economy, most significantly drawing a link between the advance of industry and the advance of science.

A generation or so later, the Austrian Friederich List would go a step further; proposing that the wealth of nations came not from the output of industry as such, but from what he called (in rough translation) “mental capital” – the conceptual capacity to bring into production what had never been produced before.

Josef Schumpeter was the first economist to use the term innovation, but never in a policy context. Moreover, Schumpeter was at best indifferent to industry and uninterested in technology or science, concerning which he developed no coherent theory. For him innovation was simply the product of entrepreneurship which in turn drove economies to grow much in the same way as photosynthesis drives evolution in life.

Precursor ideas like these and many more besides were eventually to converge and find voice in defining innovation policy as we would understand it today. It would be simplistic to identify a single point at which they converged, but certainly one of the most significant catalysts would have to be World War II. Conflict is not essential for innovation, but as it turned out it became essential for the development of innovation policy.

Bernal’s motivation was his observation in the 1930s that the Great War had seen not only major advances in technology, which could have many economic spillovers, but also in science (most of what Bernal called science would be called R&D today). His insight was to link the two in a sort of symbiosis, leading to the proposition that science is linked directly to growth and prosperity, and that this was instrumentally linked to public investment. A proposition that has driven most innovation policy ever since.

Bernal’s ideas were radical for their time and received with bemused curiosity by his peers. But they were never implemented. Not so a substantially similar proposal following WWII by Vannevar Bush, Bernal’s American counterpart as head of US military R&D. Bush’s Science the Endless Frontier started a case for supercharging the US post-war economy such that the growth created by scientific advances and new technology in wartime could be continued and accelerated by investment in R&D.

This idea also informed both European and Japanese reconstruction, notably via the Marshall Plan. But the situation in these countries was vastly different to that of the US. The US exited the war with a fully functioning, indeed booming, industrial and higher education complex, and with access to virtually all the world’s liquidity. As the only remaining global force in science and technology, the only policy required was to feed the single horse on an otherwise vacant racecard. By contrast, Europe and Japan faced the task of totally reconstructing and transforming their industrial capacity and rebuilding their human capital base. Thus, although aimed at the same ends, the policy paths of the US and the rest of the world diverged at this point and have never fully converged since.

Accordingly, although the US became the idealized model to emulate, it was mostly out of the European and Japanese effort to do so that the precursors of what today we recognize as science, technology and innovation policy were forged. Most of the architects of these initiatives were involved with the Marshall Plan, which eventually became the OECD. Most of the apparatus still used today to monitor and measure innovation evolved out of efforts to plot the progress of post-war reconstruction.

The details of how all of this worked out are of course considerably more extensive and complicated, with everything spurred massively further forward by the Cold War. But by the mid-1950s, most of the former allied and occupied countries, plus Germany and Japan, were adopting similar suites of policies aimed at economic reconstruction but also transformation through investments in new technology. Such efforts were eventually to coalesce in policy frameworks, like national systems of innovation, around which most current policies are still oriented.

The key lesson to take away from this brief and highly selective history of the roots of innovation policy is that although the period during and following WWII saw innovation accelerate at an unprecedented rate, supported substantially by public investment, very little if any of this effort was carried on under the banner of “innovation policy”. Rather, it emerged from initiatives in diverse policy portfolios – defense, transport, aerospace, communications, health and a host of others – aimed strategically at industrial development in various sectors. Innovation was the outcome.

By the 1960s this all started to change. And in this instance, one could point with justification to a point of origin in a single technology – electronics. Which will be where my next installment begins.

Richard Hawkins, former Professor and Canada Research Chair in Science, Technology and Innovation Policy at the University of Calgary.