Do we need public policy towards innovation?

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Ambar Vitelli-Khosla

Strategic Partnerships

The common purpose of public policy and innovation is to address socio-economic challenges and meet aspirations of the industry and the society. With increased digital penetration around the globe, tech innovation has come to resolve critical issues including climate action, finclusion and customer vulnerabilities. A little involvement from the government can accelerate innovation and streamline it in the direction of holistic growth with efficient resource utilisation.

How governments and industries facilitate innovation?

The direction of innovation is often sensitive to market and customer demands. Public policy channelises how the innovation policy is designed, implemented, and governed by organisations.
Governments can influence the pace and the direction of corporate and tech innovation through their influence on regulation, investments and scalability of supply chain.

On the other hand, considering their proximity to the market, tech and financial institutions generate a significant proportion of data and insights. Rapid experimentation with this data gives the foundational knowledge of why, where and how governments could intervene in the processes of innovation.

A public policy that encourages innovation

Innovation requires fiscal investment, skill building, rapid experimentation and strategic thinking. But foremost, the industry requires support from the government in the form of creation of a tech friendly ecosystem and massive engagement. Good public policies can encourage:
  • Creation of Interaction Spaces: While governments endure the task of dealing with multiple policies and assessing costs, industries deal with regulatory challenges. Interaction spaces create the feedback loop where industries and governments can coexist, brainstorm and learn from each other’s experiences and outputs.
  • Acknowledging Corporate Innovation: Corporate innovation not only generates more creative output but also builds social capital among stakeholders in the tech ecosystem.
  • Incentivising Data Sharing: Data sharing is an opportunity to eliminate costs and redundancies and leverage the data created by different industries. Governments can benefit by feeding the massive datasets that are generated by industries into simulation systems to form accurate objective policies.
  • Partnerships: Stakeholders that want to be agile and quickly adapt to disruptions need to collaborate with other partner organisations. Fintech partnerships make supply chain processes frictionless, resource-efficient and swift implementation.
  • Experimentation: Rapid experimentation takes into consideration the different sectors and stakeholders of the economy and wider communities, making innovation inclusive. Evaluation using Digital Sandbox makes certain that innovative products and services conform to Proof of Concepts (PoC) and Proof of Values.
Public Policies that are formed after thorough multisectoral interaction, experimentation and evaluation diffuse knowledge. They ensure that potential beneficiaries are capable of understanding and using new knowledge productively.
Research shows that encouraging innovation, engagement, and technical skilling are necessary for economic growth, international competitiveness and making systems more resilient. Accommodative policies can enable addressing finclusion, cybersecurity, ease of doing business in the most efficient and effective way.

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