System Dynamics for System Innovation: POLYTRoPOS

Introduction

There is mounting interest in innovation policy approaches that can lead to transformative societal outcomes which include rapid economic development, environmental sustainability and a cohesive 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. 

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

Objectives

Over 2025-26, the JRC is developing a purpose-built impact assessment model of system innovation to complement the European Commission’s policy evaluation toolkit. The POLYTRoPOS system dynamics model will have the capability to evaluate crucial features of transformative innovation policy, including synergies and sequences between policies across multiple funds/sectors, multi-level interactions, and rebound effects. 

POLYTRoPOS has been defined as a general model of the economy operating in symbiosis with the natural environment and societal wellbeing, that can be readily applied to cases, or ‘episodes’, of solution diffusion and deployment (e.g. on energy, mobility, defence) and of domestic productive capability development through innovation. 

The full macro-model will be multi-level (EU, national, regional), and draw on readily available, internationally comparable and regularly updated statistics. Its focus will be on assessing the approximate impacts of coordinated policy portfolios along the duration of a deployment-capability transition episode. It will include sufficient detail to model the impacts of major decisions by EU, national and regional innovation policy makers and evaluate their outcomes in synergy with one another and with other policies.

Specific objectives:

• To construct a bespoke quantitative model of system innovation capable of simulating policy synergies and sequences across domains and levels of governance
• To develop a matching participatory system dynamics modelling (PSDM) methodology suitable for place-based diagnoses and attendant extensions to and adaptations of the general model
• To develop a data infrastructure for the cost-effective calibration of the model to distinct policy applications 

Duration

The current development phase has a duration of 24 months (December 2024-2026)

Partners

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:

Key outputs

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.