Stream Institutions, Innovation & Prosperity

Can institutions ensure that innovative activities continue to take place that contribute to prosperity?

Institutions are ‘the rules of the game’ in a society. We ask what institutions can ensure that innovative activities continue to take place that contribute to prosperity? And how such institutions may take shape or fail in specific contexts?

Technologies and institutions both resist change. Such change, however, is essential in a changing socio-technological environment. Institutions for an open society should allow for challengers to challenge while providing stability for incumbents and ensure a stable set of rules of the game on a level playing field for both. Many innovations that could enhance our prosperity fail to be developed and diffused on a large scale. This is especially the case for (radical) innovations that contribute to solving grand societal innovations. Examples are novel forms of renewable energy, the circular economy, self-driving cars, or novel medical innovations, such as DNA-editing.

Institutions, Innovation & Prosperity

Understand the process of institutional change

Technologies that we use today are embedded in a powerful social context of formal and informal institutions that cause “lock-in” to occur. And in turn technologies (re)shape institutions, often to strengthen the status quo. For example, in construction, many construction regulations block the progress in alternative technologies as conventional technology progresses.

In contrast, services driven by internet-based technologies, such as car sharing or flex working diffuse at such a rapid pace that it hardly possible to develop institutions to properly regulate these new phenomena. These services generally increase prosperity, but also have undesirable side-effects, such as poor labour conditions. In short, the institutional fabric of society is not aligned to the needs of prosperity enhancing innovations. This stream aims to develop insights that help create this alignment.

 To regulate the pace at which these innovations diffuse, we need to understand the process of institutional change, and the mechanisms that trigger these changes. In this stream we will develop the theoretical concepts and empirical tools to analyse these processes across disciplines.

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