System Dynamics for System Innovation: POLYTRoPOS

There is mounting interest in innovation policy approaches that can lead to transformative societal outcomes which include rapid economic development, environmental sustainability and an inclusive society. These theoretical developments have inspired widespread experimentation by policy practitioners. However, the growing popularity of transformative innovation policy has not yet been matched with suitable developments in measurement and evaluation frameworks and tools. Existing tools for measuring, modelling and evaluating innovation policy inputs and outcomes are unable to capture crucial features of transformative innovation policy, including synergies, tipping points, multi-level interactions, sequencing and rebound effects.  

System Dynamics for System Innovation aims to build the knowledge base for the conceptualisation, measurement, modelling and evaluation of system innovation. In its present phase the project focuses on the construction of a first prototype model (POLYTRoPOS - POLYvalent model for the ex ante evaluation of TRansformative POlicy Scenarios) and on its validation with experts. 

The project’s key objectives in this exploratory first stage are to:  

• Develop a working prototype quantitative system dynamics model with policy applications in demand-led industrial transitions (e.g. in energy & mobility; agri-food; security & space) that demonstrates feasibility and usefulness; 
• Contribute to the definition of design specifications for a fuller and more rigorous model of the system dynamics of transformative socio-economic change.  

To achieve these objectives the JRC facilitates a co-creation process that brings together: 

• Pioneer policy practitioners, as the final users of policy evaluations  
• JRC researchers and other experts on the measurement of policy inputs and outcomes, system dynamics models, new industrial policies and transformative innovation policy. 

The initial exploratory phase has a duration of 12 months (December 2023-2024) 

The JRC facilitates a Working Group on System Dynamics for System Innovation with external partners that brings together researchers, system stakeholders and policy practitioners. The Working Group provides a space for learning from the state of the art on system dynamics for innovation, provides substantive input and critical feedback to the development of the prototype model, opens up possibilities for collaboration and nurtures an incipient community of policy users. 

To shape the evolution of the project, the JRC maintains an Advisory Board of internationally recognised experts and distinguished practitioners in their respective fields:

A prototype model illustrating key concepts and applications (possible application domains to explore include: energy and transport; agri-food; security and space) will be developed along the course of the project. The steps to the development of the prototype model involve the construction of core model functions based primarily on insights from theoretical and empirical literature, experts consultations and the codification of causal loop diagrams, custom measurements of relevant parameters (e.g .technology diffusion and production capabilities), measurements of policy interventions and the set-up of a quantitative SD computer simulation model suitable for assessing policy scenarios. 

The process and outcomes will be documented in a JRC Scientific and Technical Report and other publications. 

Lessons from the exploratory project will inform the future development of measurement and evaluation tools in the JRC, which may include a more fully-fledged and versatile SD model.