This chapter presents the results of the assessment of net zero mission outcomes, which is the second layer of systemic effects. These outcomes relate to the scope and ambitions of the missions, the investment from public and private partners in mission activities, and the systemic dimension of missions.
Mission‑Oriented Innovation Policies for Net Zero
How Can Countries Implement Missions to Achieve Climate Targets?
Abstract
Mission-oriented innovation policies (MOIP) are expected to build upon their three main outputs discussed in Chapter 4 (strategic agenda, governance structure and policy package) to essentially “aim higher”, benefit from more resources and engagement from all partners, and explore more systemic solutions. This chapter assesses the extent to which net zero missions contribute to these three outcomes. Table 5.1 provides a synthesis of the main outcomes of net zero missions.
Missions have a broader scope and higher level of ambitions than comparable initiatives in traditional strategic and policy frameworks.
5.1.1. Net zero missions belong to broader portfolios of missions
In a large number of cases, net zero missions are presented in a bundle along with other missions that aim to tackle other or similar societal challenges.1 Figure 5.1 shows that 65% of the identified mission-oriented innovation policy (MOIP) initiatives include more than one mission tackling different challenges beside climate change (“general multi-mission MOIP”). Examples include Horizon Europe missions, Germany’s High-tech Strategy 2025 and the Swedish strategic innovation programmes. Ireland’s National Challenge Fund initiative groups its eight missions into two main themes: 1) green transition; and 2) digital translation.
The remaining 35% of the MOIP initiatives only have “green missions”, either several ones (“green multi-mission MOIP”, 19%) or a unique one (“green mono mission MOIP”, 16%). For instance, the Danish Inno mission initiative includes respectively four missions that all directly relate to climate change. Stand-alone green missions are often the evolution of a programme or a strategy that became a first mission-oriented pilot initiative, such as Chile’s Green Hydrogen mission and Colombia’s Bioeconomy mission.
Note: MOIP: mission-oriented innovation policy.
Source: OECD Net Zero Mission Database.
5.1.2. The scope of a mission must be negotiated and aligned with its available resources and anchored in its innovation system
The issue of the scope of the mission is one of the most difficult to apprehend conceptually and handle in practice. One of the reasons for this can be found in the apparent paradox that lies at the core of the mission principle: a mission must be open to all potential solutions for any given challenge, but the selection and scoping of the challenge de facto limits the range of potential solutions. As the famous saying from Mazzucato goes “missions pick problems, not solutions”. However, picking problems is far from neutral. A broader mission scope increases the range of potential solutions, which increases the likelihood of finding an adequate solution but reduces the potential synergies between the different solutions that will be actually investigated.
In theory, the only goal of a net zero mission that does not restrict the range of potential solutions is simply to “achieve net zero” by a certain milestone, without any mention of any sectors of emissions or technology that could limit the range of options. Technology neutrality is maintained best at high levels of aggregation, as explained by Boon and Bakker (2016[1]), and “the further one goes down the staircase” in offering support to a specific problem, the more likely alterations are possible to the “level playing field”. The final milestone for the realisation of the mission also has implications for the breadth of the “problem space”. A close deadline will focus efforts on mature solutions to the detriment of the exploration of new – possibly more transformative – ones.
A critical variable in this trade-off between the benefits of a large exploration space and a consistent portfolio of options is the level of financial resources and capabilities available for the mission. A small innovation system will be in a difficult position to pursue a net zero mission of the necessary scale and scope to cover a wide mission scope. It will not be able to support enough projects to cover such a wide problem space and its underpinning research innovation actors will not have the corresponding capabilities in all the relevant domains. In such a case, a more focused scope will be more sustainable and effective.
Interviews and desk research confirms that, in principle, a great deal of attention is placed on the “solution neutrality” of the missions. In the most interesting cases, the multi-mission MOIPs have been experimenting with various scopes of missions. However, very few have set widely open net zero missions. Most missions have set “solution-neutral objectives” within the confines of a technological area, an ecosystem or a sector (most often an application sector, hence leaving open the choice of the potential solutions to fulfil the objectives).
Source: OECD Net Zero Mission Database.
The technological focus associated with the missions can be directly included in the mission objectives or mentioned in the text that accompanies the description of the mission. In some cases, it is difficult to assess whether these technologies marked the boundaries of the problem space ex ante or were the result of the mission co-ordination and implementation. However, despite this caveat, Figure 5.3 provides some good indications as to what technologies the net zero missions focus on. Energy technologies come first, in accordance with their current level of emissions and their potential to reduce emissions in many sectors. The circular economy, which requires the close co-ordination of numerous actors along products’ value chain, is also considered in a significant number of missions.
Note: GHG: greenhouse gas.
Source: OECD Net Zero Mission Database.
➤Net zero mission case
Zero Emission Challenge, Research Ireland Challenge Research Programmes, Ireland. Determining the ‘right’ scope of the missions has been debated within Research Ireland (formerly Science Foundation Ireland - SFI) when they initiated their Challenge Research Programmes. The agency has deliberately launched missions with different degree of openness to draw lessons on this key issue. The Zero Emissions Challenge for instance was very open, aiming to ‘Support interdisciplinary teams to develop disruptive solutions that accelerate progress towards net-zero greenhouse gas emissions in Ireland by 2050’. It attracted a project to create a carbon neutral resilient dairy farm (‘Farm Zero C’, the winning project at the end of the competition), as well as projects on the recycling of lithium cobalt batteries or new solar panel technologies. Others were more narrowly defined such as the Food Challenge, the Plastics Challenge, or the AI for Societal Good Challenge. Some further specifications permitted to fine-tune the balance between openness and strategic pre-orientation: the Zero Emissions Challenge was open to all solutions to reduce GHG emissions, but a specific ‘bonus’ of 1 million euros was announced for projects that would succeed in developing Carbon dioxide removal (CDR) technologies (this bonus was not awarded).
5.1.3. A carefully managed interface with exploratory research allows mission renewal
Missions often include parallel activities on different generations of technologies to fulfil staged objectives, often related directly or indirectly to national GHG reduction commitments for different time horizons (2030 and 2050 in most cases). Mission co‑ordinators usually try to remain more open and flexible regarding the scope of solutions under investigation for future technologies, as they require more exploratory research.
While such an approach can appear to be in line with the “common wisdom” of research management, it has implications on the design of the mission. Since the directed and integrated features of missions are less suited for exploratory research, upstream research activities may be better placed either outside the mission or in a specific sub-programme with their own operating principles and governance, although still directed towards mission goals. In both cases, it is essential to set up institutionalised linkages between these upstream activities and the mission’s “core” development, demonstration and deployment activities. Concretely, this can be done through mutual representation in the governance bodies of the missions and the exploratory research programme, and periodical progress reviews of basic research promising advances, common events with presentations of results and challenges on both sides. This “controlled interface” maintains the strategic autonomy and freedom of research while ensuring that researchers are aware of the mission’s needs and that their progress will be reviewed against these needs. In France and the United States, specific basic research initiatives are attached to one or several missions without being formally embedded in them. They have their own operating principles, budgets and governance structures.
➤ Net zero mission cases
Acceleration Strategies, France. Within the French acceleration strategies, exploratory research is conducted in Priority research programs and equipment (programmes et équipements prioritaires de recherche, PEPRs) which are attached to one or several AS to support them. As of mid-2023, 43 PEPR had been launched to support about 20 ASs. They are used either to support ASs (‘acceleration PEPRs’) or to structure new scientific communities around emerging research areas (‘exploration PEPRs’) which could become, if deemed relevant and promising, ASs in their own right. The average support given to each of these PEPRs ranges between 20 and 120 million euros. Acceleration PEPRs, such as the "Carbon-free Hydrogen" PEPR, have their own strategic agenda. They are led by a designated scientific coordinator, possibly with a co-leader from another higher education or research institution. Although operationally and financially autonomous from the ASs, they are formally linked to the SAs they support by an interface enabling two-way connections: from the PEPR to ASs, some PEPR funds are dedicated to the transfer of new technological options within the strategic agendas of the relevant ASs; from the ASs to the PEPRs, the ASs can issue some specific calls for proposals for premature and mature technologies to explore the potential of new basic research progress and mobilise them to achieve their specific objectives. The linkages between Sas and PEPRs are also ensure by mutual presence in their respective governance bodies. The PEPR « Supporting innovation to develop new, largely carbon-free industrial processes » for instance is attached to the Industry Decarbonisation AS, covering the TRL 1-4 via breakthrough research on, for instance, CCSU research. This programme has a budget of 70-80m Euros (compared to 610m Euros for the AS).
➤ Energy Earthshots™, US. The U.S. Department of Energy’s (DOE) Energy Earthshots™ Initiative sets specific cost and performance targets across clean energy technologies. The Energy Earthshots™ focus is on having technology meeting the cost and performance targets ready to be deployed at scale within a decade. Reaching these targets will require major RD&D breakthroughs to solve significant technology barriers that exist today, and will make major impacts on some of the largest emitting sectors of the energy economy. Energy Earthshots™ drive integrated program development across DOE’s Office of Science and its Applied Energy Offices, and integrate into the innovation and deployment strategies of the Department as a whole. The Energy Earthshots™ mobilise basic research through specific activities of the Office of Science, that address the fundamental science challenges for each of the Energy Earthshots™ as identified by subject matter experts in the basic and applied research, development, and demonstration space via different initiatives. 1) The Energy Earthshot Research Centres (EERCs) are multi-disciplinary, multi-institutional teams led by DOE laboratories. USD100 million were allocated to these centres in 2023. They focus on key research challenges at the interface of basic and applied R&D in support of Energy Earthshots™. Each EERC focuses on one Energy Earthshot mission (e.g. Hydrogen Shot™, to achieve $1 for 1 kilogram of hydrogen by 2031), and thus becomes a center of innovation that can catalyze and connect with applied work and foundational science. 2) DOE also created Scientific Foundations for Energy Earthshots (SFEE): Small group awards led by academic or private sector institutions focused on use-inspired fundamental research addressing knowledge gaps limiting the achievement of Earthshot goals. SFEEs research goals are applicable to multiple Energy Earthshots™. Applied Energy Offices within DOE support technology development, applied R&D, through early demonstration. This is through specific funding opportunities targeted toward key technologies critical to achieving one or more Energy Earthshots™, as well as through consortia engaging industry, national labs, and universities that are aligned with specific mission targets. One example is the H2NEW consortium launched and managed by the Hydrogen and Fuel Cell Technologies Office within DOE’s Office of Energy Efficiency and Renewable Energy. H2NEW is a cohesive, coordinated effort on “Hydrogen for the Next Generation of Electrolysis from Water.” Funding for H2NEW is planned at approximately $150 million over five years. Additional funding is provided through competitive funding opportunity announcements, such as $470 million in specific electrolyzer development and manufacturing-related topics in March 2023.
Net zero missions have yet to attract funding commensurate with their level of ambition, scope and time horizon.
5.2.1. Missions have a longer term horizon and provide more longer term funding
Most net zero missions have set ultimate target dates for either 2030 or 2050, consistent with their country’s global CO2 reduction pledges. While the administrative budgeting processes and political cycles do not allow securing budget allocations until these target dates, the analysis reveals that these missions generally benefit from more longer term funding than traditional research and innovation initiatives. Specifically, among the net zero missions with available data, 61% have funding durations exceeding four years, with 38% spanning beyond six years. For purposes of comparison, OECD findings on competitive research funding indicate that the majority of research grants are provided for three to five years. However, there is a growing trend toward longer grant durations in newer schemes. Financial support exceeding seven years is primarily channelled to “centres of excellence” with fewer grant applications or is tied to institutional funding (OECD, 2018[2]). Further comparison with EC-OECD STIP Compass data affirms this: approximately 45% of public research grants and 34% of business research and development (R&D) grants extend beyond three years.2
Since many funding organisations (ministries, agencies) are still subject to an annual budget cycle, multi-year funding is most often only announced (or at best, earmarked), but not appropriated. However, even if non-binding, it is announced publicly, and therefore usually represents fairly reliable budget commitments that reduce the level of uncertainty of the partners and stakeholders involved in the mission, allowing them to plan ahead and set more ambitious and long-term objectives. Missions are too recent to allow for an assessment of whether they can withstand several budgetary restrictions, such as those experienced after the 2008 financial crisis. The tightening of budgets after the COVID-19 pandemic is the first mission robustness test.
5.2.2. Most missions’ budgets remain in the range of large-scale climate R&D programmes, but are better integrated
Most missions with available budget information3 have budgets in the EUR 1‑20 million and EUR 20-200 million (each range representing 35% of missions) (Figure 5.4).
Source: OECD Net Zero Mission Database.
As for other policies, many variations in mission budgets predominantly reflect the general disparities in the size and development stage of a country’s science, technology and innovation (STI) budgets. The scope of the mission is another crucial determinant of its budgetary allocation. Broad, systemic missions, especially those encompassed within a comprehensive mission-oriented strategic framework, often comprise numerous relevant programmes. However, as previously mentioned, these budget figures should not be taken at face value since these large missions are often loosely integrated and only aggregate ex post policies and programmes that remain, for the most part, independent from each other. A prime example is the former German HTS mission, “Achieve Substantial Greenhouse Gas Neutrality in Industry”, which operated with an annual budget of EUR 6.25 billion.
A mission’s budget envelope correlates with its content. Notably, the few missions that also support the market deployment of new solutions generally require far greater budgets than missions focusing on research. As mentioned in Chapter 4, this is the case for France’s “Clean Hydrogen” Acceleration Strategy, whose more than EUR 1 billion annual budget is allocated to provide price-based incentives for adopting new (more costly) technologies. On the other end of the spectrum, the Irish “Zero Emissions Challenge” research programme, which aims to include the demand dimension in its research activities but remains focused on R&D, has an annual budget of EUR 1.5 million.
Although imperfect, a comparison with some selected examples of climate change-related research and innovation “programmes” provides some meaningful orders of magnitude. It shows that (“non-mission oriented”) thematic programmes in renewable energy; carbon capture, utilisation and storage; or sustainable transport technologies have budgets in the range of EUR 5-100 million, as is the case for most missions. These comparisons, therefore, tend to suggest that the funding envelopes available to net zero remains, while significant, somewhat in the order of magnitude of more traditional large climate-related R&D programmes, apart from some large umbrella missions and some more systemic missions which include scale-up and investment support.
At the project level, some cases such as Pilot-E and Mission-driven Top Sectors and Innovation Policy (Netherlands) suggest that the joined up approach enables public bodies to award larger grants to larger consortia performing a wider range of activities.
Net zero mission cases
➤ Mission-driven Top Sectors and Innovation Policy, The Netherlands. The Mission-oriented research, development, and innovation (MOOI) scheme in the Carbon-built environment mission is an integrated instrument specifically developed for this mission. It provides support to multidisciplinary consortia that develop proposals that combine various technological and non-technological sub-solutions, including also activities concerning the commercialisation and societal acceptance of the projects (Janssen, 2020).
➤ Pilot-E, Norway. The cooperation of three agencies in Pilot-E has resulted in larger projects with larger budgets than those traditionally awarded by the agencies alone.
Besides funding levels, another important dimension is the nature and composition of the mission budget. Many missions do not have a proper dedicated budget and are funded by diverse funding sources. This is confirmed by the survey of mission practitioners and stakeholders mentioned above carried out by the OECD Mission Action Lab and the Danish Design Center (OECD and DDC, 2022[3]). While most funding comes from national actors, most missions are funded through multiple sources, showing a “scattering of funding resources”. Furthermore, 36% of the 131 respondents consider that “aligning resources across government or organisations” is the biggest financial challenge, ahead of the mismatch of investment and strategic mission objectives and the lack of risk capital and high-risk, high-reward investments or the lack of targeted resources.
The uncertainty with regards to the unfolding of the net zero pathways and the consequent development of the mission strategic agenda or road map as a “living document” in many missions requires some degree of flexibility on the budgetary side as well. There must be firm financial commitments from public authorities over the long term while preserving a significant margin for changes to adapt to new internal and external developments. Striving to do this, missions can face difficulties due to existing rigid public budgetary and accounting rules. One way to get around those is to commit a portion of the announced funding and earmark another portion which might be awarded under certain conditions regarding the performance of the funding, notably its ability to form a wide and solid partnership that gathers the necessary capabilities and resources to meet the mission’s objectives. Another more widespread mean in the world of missions (and increasingly in other STI support programmes) is to use a gated funding model, where projects have to go through pre-determined assessment milestones to progress to the next phase and receive the associated instalment.
Net zero mission case
➤ INNO-CCUS, Innomissions, Denmark. When the Danish CCUS INNOmission was initiated, it was granted DKK 200 million, including DKK 100 million awarded to 20 projects. These 20 projects were referred to as the “pool 1 projects”. Forty per cent of this amount (DKK 80 million) was reserved for subsequent “pool 2 projects”, where projects could be added to the mission. Elaborating this more flexible process was considered cumbersome because the implementation of this new funding mechanism involved legal changes.
5.2.3. Missions need a dedicated process and support to leverage their initial funding and mobilise additional partners
The funding of a mission should thus be considered in a dynamic perspective. A mission’s success depends in the end on the funding that it can attract using the governance and policy frameworks built with its initial budget. However, the academic literature rarely addresses the mission’s leverage effect. Several interviewees described the initial budget of their mission, in almost all cases originating from the leading STI authorities, as “seed money”. Given the transformational objectives of the net zero missions, the necessary financial amounts to bring the developed sociotechnical solutions to scale are several orders of magnitudes higher than their endowment at the outset. Others have invested in developing a “map” of potential funding sources that could be mobilised, in line with the unfolding of the mission strategic agenda. Some initiatives, such as CSIRO’s missions, have embedded this leverage imperative into their mission approach.
Net zero mission case
➤ CSIRO Missions, Australia. The title of the Mission Playbook developed by CSIRO – “Convening missions” – clearly conveys the organisation’s strategic approach to missions. The CSIRO Missions Program was launched in 2019 as an internal endeavour, integrating the capabilities of several internal departments and business units, and joining forces with a limited number of external public and private partners. The success of the mission then depends on the ability to build upon this initial impetus to attract new partners with their own capabilities and resources. The CSIRO mission theory of change translates the progress of the mission through the gradual broadening of the range of partners involved: it goes from the ‘institution (CSIRO) outcomes’ to the ‘network outcomes’, ‘system outcomes and finally meet the ‘mission objective’. The convening dimension of CSIRO missions is therefore double: 1/ it is about convening various internal resources of this large interdisciplinary research organisation (6,000 staff members); 2/ to succeed the missions need to convene partners well beyond the initial ‘coalition of the willing’. CSIRO refers to an ‘agency convened’ model of missions. This ‘model seeks to accelerate the diffusion of solutions by ‘crowding in’ existing and new policy initiatives, investment, research activities and innovation system actors around a shared objective’. To trigger this snowball effect CSIRO invests internally over EUR 30 million per year of ‘seed funding’ and expect to crowd in about EUR 120 million per year. The CSIRO’s mission office supports all missions in the convening process and fund raising (CSIRO, 2023).
Some missions benefit from a label effect that support the leveraging of their funding. In the case of EU missions, this labelling is formal. In other cases (Research Ireland Challenge Research Programmes, Pilot -E) it is only informal, building upon reputation effects. At the project level, several mission leaders report cases where the selected projects have benefitted from significant additional or follow-up funding from other programmes, benefitting from their embeddedness in a particular mission. This is particularly the case for the mission-oriented schemes that take the form of a challenge-led “prize competition”, as they involve a fair degree of competition. As mentioned above, the public authorities in charge of the mission, as part of their more hands-on project management, can support projects with dedicated commercialisation and entrepreneurship training, connections to users and investors.
Net zero mission cases
➤ Horizon Europe missions, EU. The Cities Mission has set up an innovative procedure to labellise cities that comply with some criteria established collectively at the level of the mission, to ease their access to complementary funding. The initial mission budget (EUR 360 million over 2021-23) originates only from Horizon Europe. To date, there is little fund committed to or earmarked for the mission by other programmes. This initial budget is mainly dedicated to setting up the overall framework for developing and normalising the process to be followed by the 112 cities to become ‘smart and climate neutral’ and supporting the cities in implementing this process through the Mission Platform. The latter enables direct exchange and networking between participating cities and provides them with the necessary expertise and assistance for developing and implementing their Climate City Contracts (CCCs), as well as financial and technical advisory services to develop their tailor-made investment plan to access public and private funding. In particular, a key component of the mission leverage effect consists in awarding a ‘Mission label’ by the Mission Manager to selected cities having completed a CCC that has been positively reviewed. This label aims to ‘unlock synergies with other programmes’ by facilitating access to other funding and financing opportunities (not least the EIB and the European Regional Development Fund (ERDF)). Cities are invited to make explicit reference to their Mission Label in their award procedures (calls for proposals, prizes etc.). It is also expected that in the second phase of the mission which started in 2023, when the vast majority of CCCs are in place, linkages will be established to calls for proposals under other funding programmes at EU, national or regional level. Labellised cities could for example receive additional “points” in the award criteria under these calls’ evaluation process.’ The Council of the EU, in its ‘Conclusions on European missions’ adopted in June 2022, proposed that this labelling procedure be used for the other EU missions in the context of calls for proposal outside Horizon Europe in order ‘to facilitate the construction of missions’ portfolios, to increase the visibility of the related initiatives and to gather their results (Council of the European Union, 2022[4]).
➤ Net Zero challenge, Research Ireland Challenge Research Programmes, Ireland. In Ireland, the Zero Farm project that won the Research Ireland Net Zero challenge received 1.2 million euros from Research Ireland and 10 million euros from the EU and Enterprise Ireland. According to the mission leader the Prize helped raising additional funds.
➤ Pilot-E, Norway. In Norway, the evaluation of Pilot-E concluded that there is broad agreement among beneficiaries that having been selected as part of this scheme is ‘a stamp of quality for the project’ (Menon Economics, 2020)
5.2.4. Most mission funding almost only draws in STI budgets
To date, few missions have been able to secure significant financial commitments beside the initial STI funding. This is notably one of the results of the first assessment of EU missions (see Table 4.5 and Annex E), which concluded that the level of resources mobilised beside Horizon Europe remains lower than expectations.
Although it is difficult to collect systematic data on this matter, the question was asked in all interviews and the results firmly confirm this argument.
This has two major consequences. First, at the outset, many missions only receive seed funding and depend on their ability to attract partners and leverage additional funds to reach their objectives. Their success is thus compromised at this stage. Second, the difficulty of missions to raise funds beyond the STI budget creates a mismatch with the mission scope. In other terms, several missions end up supporting non-STI activities with STI funding which, in some cases, has raised criticisms and generated tensions. This has been pointed out in other case studies and assessments. For example, the 12 missions of the German former High-Tech Strategy were clearly addressing societal problems, but they still strongly relied on STI policy means, which made “effective integration with sectoral policies … rather patchy” (Roth et al., 2022[5]).
5.3.1. Needs and demands related to the mission are articulated throughout its life cycle
Although different types of STI policies have made progress in the way they identify the needs and demands to be addressed, and how they use these to calibrate their objectives and design, the demand conditions are still not given full consideration when designing the policies to support missions (Boon and Bakker, 2016[1]). The systematic review of net zero missions in this chapter draws a less negative picture of missions. It finds that, in many cases, the missions tend to be effective platforms for demand articulation in the specific context of systemic and complex societal challenges.
The mission’s demand-driven nature is one of the aspects the most frequently highlighted as a novelty of the mission-oriented policy approach. There are various means to articulate demands in missions at different stages of their life cycle, from mission definition to mission evaluation (Figure 5.5).
During their early stages of definition, missions use different ways (e.g., consultation workshops and platforms, committees, and studies) to determine and integrate the interests of society and various stakeholders’ views. Through these various channels, the demand and use dimensions are embedded by design into the mission’s objectives and targets. While the mission targets can sometimes be politically driven (as for the 25 missions of the Dutch Mission-driven Top Sectors and Innovation Policy), in many missions, the development of the strategic agenda is the main channel for integrating the demand and use dimensions. This is especially true for ecosystem-based MOIPs. In these initiatives, large communities of actors coalesce to develop an agenda that is consensual enough to reconcile the interests of the broadest part of the ecosystem and ambitious enough to maximise its chances of being selected by public authorities for implementation.
The governance of the mission can also serve as a channel to connect more continuously to the potential user community and various interest parties. Although these co-ordination structures most often involve representatives from various public authorities, the presence of sectoral ministries or agencies can help integrate the use dimension into missions. Again, ecosystem-based MOIPs are an exception, as their governance structure features large representation from the ecosystem itself. Some of the largest overarching mission schemes can also have a dedicated advisory body comprised of stakeholders and experts with strong consultation mandates.
During implementation, some missions – even the most research-intensive ones – have included specific mechanisms to engage users and other actors related to the demand side (e.g. regulatory authorities) at the project level.
Net zero mission cases
➤ Net Zero challenge, Research Ireland Challenge Research Programmes, Ireland In the Irish Challenge Research programmes, including those targeted at zero emissions, project applicants are strongly encouraged to include stakeholders and end-users in the proposal. Even during the so-called “concept phase” (first phase in the programme’s stage-gate funding), Research Ireland promotes interactions between the “challenge teams” and potential “solution beneficiaries” so that they can test whether their ambitions are realistic, and also navigate non-technical issues relating to challenges (e.g., stakeholder engagement) and solutions (e.g., barrier identification). A “societal impact champion” is nominated for each project, to provide a strong societal perspective for team members as they develop their solutions and build relationships between scientific researchers and their stakeholders and beneficiaries. In addition, Research Ireland strives to identify and map the “impact actors” related (in a broad sense) to the various applications and use of the technologies being developed, and support connections between the researchers involved in the mission and these organisations. Research Ireland strongly encourages the mission teams to engage with these actors so that they better understand the challenges and start building connections. This has a significant acceleration effect, bringing projects closer to the market and impact. Research Ireland also organises “meet and greet” events with investors, to familiarise researchers with their way of thinking.
➤Energy Earthshots™, United States
The Earthshots™ use a variety of approaches to ensure potential users and regulatory authorities are involved in the initiative. This is done for instance through calls for proposal at a rather early stage. For instance, the Hydrogen Shot has issued Small Business Innovation Research and Small Business Technology Transfer (SBIR/STTR) challenges for innovators to respond to, and these could result in procurement from government if innovators are successful. The Hydrogen Shot also used an Incubator Prize to foster innovative concepts for producing clean hydrogen, and hosted a “Pitch Day” for the winners to present to potential investors and commercial partners. Also, as part of its support for the Carbon Negative Shot, the DOE has created a market for carbon off-sets through its Carbon Dioxide Removal Purchase Pilot Prize. Under this scheme, companies are competing for the opportunity to deliver carbon dioxide removal credits directly to DOE. This is the first example of the US government agreeing to purchase these sorts of credits. It aims to help catalyse the development of the carbon dioxide removal market through rigorous monitoring, measurement, reporting, and verification practices through third-party scientific validation. The DOE has developed a leader board for companies to make companion purchases of these high credible carbon credits. Some companies have already made pledges to purchase these credits once the credits are verified by the DOE. In addition, regulators are included in the governance of the initiatives, which helps ensure they align their regulations with the novel technologies developed by DOE. In the case of the Floating Offshore Wind Shot, the Department of Transport is providing priority permitting approvals to the speciality vessels that will deploy offshore wind technologies.
5.3.2. Missions support a more comprehensive and consistent range of activities but remain too confined to science and technology development
Depending on a mission’s objectives, its tailor-made policy mix supports a wide range of activities, from basic research to deployment, capacity building, communication and advocacy.
Net zero mission case
➤ Atmosphere and Climate Competence Centre, Flagship Programme, Finland. The Atmosphere and Climate Competence Centre (ACCC) is a Finnish flagship programme that aims to mitigate climate change by increasing forest and soil carbon sequestration and improve global air quality. The ACCC consortium brings together three universities and one research institute, and over 40 key stakeholders. The mission sustains a diverse array of activities, which range from education, research and impact programmes to engagement and citizen science, and solution development and prototyping. Among these activities, the Verified Climate Safety initiative verifies climate neutrality based on observation systems; the GlobalSMEAR initiative integrates 1 000 atmospheric-earth system stations to provide data from various ecosystems around the world; the Citizen Science Initiative allows the general public to contribute to problem definition, data collection and analysis in climate science; the Initiative for “Safer Climate” works at the intersection between civil society, academia and art; the Climate University develops climate change and sustainability education in higher education; and ACCC Impact Week promotes dialogue between earth system scientists and society stakeholders interested in the co-creation of science-based solutions for climate change and air quality.
Most (if not all) net zero missions illustrate the additionality of the mission approach, compared to traditionally more fragmented policies, when it comes to designing and directing a consistent pool of activities towards a shared goal. It is, therefore, worth delving further into the subject and attempting to debunk this notion of portfolio consistency. A first step consists in identifying the main dimensions that allow making sense of a portfolio of activities. In principle, a portfolio can be composed of projects and activities that:
pertain to different solutions (or combinations thereof) or pathways
span different components of each of these potential solutions (from knowledge and innovation to skills, infrastructure, etc.)
pertain to different generations of these solutions, each of them being at any point in time at different stages of maturity (from basic research to market deployment) (Figure 5.6).
Managing and monitoring a mission portfolio therefore requires being able to map the different projects and activities along these dimensions and link this portfolio to the mission’s strategic agenda to identify gaps and progress made.
Note: R&D: research and development.
However, the added value of the mission approach not only resides in the diversity of the activities it covers, as more traditional initiatives like large-scale programmes or clusters may also cover a wide spectrum of activities. Rather, the mission should enable greater consistency in the pool of projects and activities. A critical challenge for net zero missions is that these different project and activities are most often under the authority of different public bodies.
A second step involves determining what type of complementarities and synergies are expected between the different activities and projects in a mission portfolio. Figure 5.6 provides such an analysis, using an ad hoc typology of the announced rationales for integrating activities within missions.4
Source: OECD Net Zero Mission Database.
As the label “mission-oriented” suggests, one of the main expected benefits of MOIPs are the common focus of a diversity of actors towards a common challenge. Challenge-led integration is, therefore, often put forward in policy documents de scribing the different initiatives. The second most frequent “pro-mission” argument is scale and scope effects, notably to finance demonstration and scale-up. This shows that the net zero missions’ scope extends beyond R&D and seeks to better bridge the demonstration or scale-up stages, ensuring continuity. Holistic integration comes in third position. It translates the fact that missions are implemented to cover consistently several dimensions of an innovation system (scientific, technological, social, legal, behavioural, educational) to solve a particular challenge.
However, the limits in the scope of missions’ policy mixes are reflected in their range of activities: few missions directly include in their “sphere of influence” activities related to the scale-up and deployment of the solutions developed and demonstrated as part of the mission. Most activities supported by missions relate directly or indirectly to science and technology development.
5.3.3. Hands-on portfolio management practices are slowly emerging
Effective portfolio management is essential to integrate the different policies and activities. As defined by the United Nations Development Programme, a portfolio-based approach is a methodology that seeks to develop, test, learn and scale a suite of interventions that are complementary and can shift complex systems by focusing on multiple intervention points at a given time (UNDP, 2022[6]). Partly inspired by their use in the financial sector, these practices have been used in traditional STI policies, notably for spreading the risks of investments in uncertain projects, and valuable tools and models exist to promote their use in the public sector (OECD, 2022[7]). Closer to missions, they are also being used by DARPA (Defense Advanced Research Projects Agency) and DARPA-like agencies (Bonvillian, Van Atta and Windham, 2019[8]).
Yet, as revealed in interviews with mission leaders, they are only emergent in other types of broader and more systemic missions. The barriers hindering their effective and widespread use are numerous and significant: lack of effective methodology and criteria to enhance synergies between instruments (not only reduce risk), lack of staff both in terms of quantity and necessary skills for hands-on and proactive management, conflicting staff and organisation incentives (still focused on individual project performance and limited to the mandate of specific organisations), inadequate bureaucratic rules and regulations (favouring competitive mechanisms to ensure a level playing field over more effective and purposive direct interventions) (Box 5.1).
Mission portfolio management (MPM) is the practice that consists in selecting, steering and monitoring a group of consistent activities in a systemic way to more effectively meet within the set deadline the objectives that have been collectively developed. This approach starkly contrasts with traditional practices.
MPM raises specific challenges which are still, to a large extent, unresolved:
Which criteria should be used to select activities and design the portfolio? MPM relies on traditional criteria such as excellence and relevance but adds an essential new family of criteria at portfolio level: the coherence of the portfolio relative to the mission’s objectives, i.e., how each project contributes to the mission’s objectives as part of a consistent set of projects and activities.
How to proactively design the portfolio while still preserving a sufficient level of competition between projects/activities and ensuring the sound and equitable treatment of project proposals? Hands on MPM approaches are less suited than a “distant” call for proposals to ensure a level playing field between different candidates and keep the process accountable. In many countries, public administrations can only allocate funding using competitive mechanisms.
How to promote exchanges between different projects/activities while preserving the confidentiality of certain knowledge and information? Project participants – especially in private firms and research and technology organisations – can be reluctant to exchange with other companies by fear of disclosing proprietary information.
How to manage strategically the portfolio of interventions? This requires some skills and knowledge that can be in limited supply in many public administrations, notably deep and broad knowledge of specific technological and industrial areas to be able to plan and assess the portfolio’s progress towards the objectives, identify arising needs, and terminate some activities.
How to manage the portfolio at a reasonable cost? MPM hands-on and strategic practices require more and more costly human resources.
Source: (OECD, Forthcoming[9]).
The implementation of such portfolio approaches calls for a change in established practices; first regarding the criteria to select projects and, as a result, to constitute the portfolio. In most cases, these criteria are not yet formalised in net zero missions. As stated by one interviewee, the selection panel pays great attention to ensure that each project is a building block of the mission. However, this new approach is still in its infancy and there are few precise comparative studies on the different ways to assess the “mission portfolio fitness” of a given project.
Net zero mission cases
➤ Horizon Europe missions, EU. The five EU missions represent a step change in the way the projects are selected in Framework Programme. The Horizon Europe Implementation Strategy planned specific procedure designed to allow for the selection of a coherent portfolio of projects (European Commission, 2020[10]). It was envisaged to proceed via two-stage calls: firstly, an evaluation of the intrinsic quality of each individual proposal submitted; and secondly, the identification of high-quality proposals that go together in a way that maximises the expected impact of the portfolio as a whole. The evaluation committees would be provided more flexibility to adapt to a mission-oriented approach. For instance, the art 26 of the Regulation stipulated that the ‘evaluation committee may rank the proposals having passed the applicable thresholds according to their contribution to the achievement of specific policy objectives and may also propose any substantial adjustments to the proposals in as far as needed for the consistency of the portfolio’. Actions were also encouraged before a call with a view to support the building of a consistent portfolio, for example using an expression of interest mechanism. Another novelty was found in the necessary tailor-made approach due the inherent specificity of each mission: the chosen approach to the selection of projects was expected to vary from mission to mission. While it is not clear whether such procedures have been implemented, the European Commission has launched some ‘sense-making’ initiatives to understand portfolio of activities relevant to missions. Such portfolio analysis found a portfolio of 841 past and present EU projects that contribute to the objectives of the Ocean and Waters missions. The analysis of the results of these projects and of the remaining gaps compared to what is needed to realise the mission by 2030 is expected to inform the mission activities. It also provides indication in terms of needed synergies with other EU programmes, including regional and cross-regional development programmes (European Commission, 2023[11]).
➤ Strategic Innovation Areas, Wallonia, Belgium. As part of its Smart Specialisation Strategy 2021-2027 Wallonia defined five Strategic Innovation Areas (SIA) as a coherent and ambitious portfolio of innovative activities, of regional scope, with strong economic impact and societal contribution. The objective is to maximize cross-fertilisation between actors across policy fields, technologies and disciplines. The processes started in each SIA with the development of ‘Co-constructed Roadmaps’ to serve as the main reference for the selection of projects and the concentration of resources in the SIA. To implement these roadmaps and move beyond individual projects, 19 ‘Strategic Innovation Initiatives’ or Integrated portfolio of projects have been selected via a dedicated call. Each portfolio proposal was required to gather a critical mass of stakeholders representing the quadruple helix and to show the various proposed activities, distinguishing their technological and economic maturity levels (Technology Readiness Levels [TRLs] and Market Readiness Levels [MRLs]), identify the necessary 'bricks', the needed public support arrangements, the cross-sectoral and multidisciplinary interactions among portfolio activities.
In the course of implementing a mission, the proactive and strategic management of the portfolio of projects and complementary activities also challenge existing structures (e.g. incentive structures) and skills. As documented by a voluminous body of research, portfolio management in these agencies is greatly predicated not only on the rare combinations of competencies among the programme staff, but also on the conditions offered to them within their agencies (notably in terms of support resources, empowerment and autonomy) to allow them to perform active project management.
While it is difficult to quantify, several mission managers emphasised that proactive portfolio management calls for significantly greater resources than traditional practices. They also mentioned that these practices are often hindered (or in some cases made impossible) by organisational procedures – and in Europe, by R&D state aid rules that prioritise the fair treatment of project applicants to ensure a level playing field among potential beneficiaries.
5.3.4. Missions support ecosystem structuring
The systemic dimension of missions often goes beyond the portfolio of projects and activities it directly supports, expanding toward the entire “mission area” or ecosystem. The objectives of a significant number of missions, in particular those pertaining to ecosystem-based MOIPs (39% of net zero missions, in 37% of MOIPs) directly relate to strengthening the relevant ecosystem. In some cases, the mission aims to create a new ecosystem in a new area, gathering disciplines and sectors that had barely met before.
Several MOIP initiatives adopt such proactive practices and engage in frequent interactions with mission partners, including during the calls for proposals. This is particularly the case of ecosystem-based MOIPs, whose success depends on the co-operation of a wide range of ecosystem partners in the framework of a co-developed strategic agenda. In these missions, such as the Finnish Growth Engine “Green E2”, significant funding (sometimes the entire budget) is dedicated to supporting the formation and structuring of the ecosystem partnership and providing resources for its “orchestration”.
Net zero mission case
➤ GreenE2, Growth Engines, Finland. The objective of the GreenE2 Growth Engine is to create a cross-sectoral network for global business in Finland that focuses on green hydrogen, technologies and ‘e-products’ (chemicals, fuels) and, based on this ecosystem, contributes to making Finland climate neutral by 2035. Growth Engines work by administering funding in two-year periods (for a maximum of ten years) to either ‘platform companies’ or ‘orchestrators’ to form a network of operators around selected ‘business spearheads’. In the case of the Flexens Growth Engine, which aim to ‘Bring together all the actors to create the solutions needed to build a 100% renewable energy system’, the selected ‘platform company’ is financed during the preparation stage through an equity loan (interest rate of 1%, loan is limited to EUR 400 000). Once the platform company and its network are established, it can apply to a Business Finland’s Competitive bidding on Growth Engines which can allocate capital loan typically in the range of EUR 2-10 M€ through a tendering by public procurement procedure. The Platform companies (small and medium-sized enterprises under 5 years of age) are tasked with tasked with ‘promoting the development of the competitiveness and new innovations of the companies involved in the Growth Engine ecosystem’. These can for instance be data providers, developing an ecosystem among their partners and value chain suppliers and clients towards a common goal. In the second case, the ‘orchestrator’, is financed via a grant covering a maximum of 50% of the costs of supported ‘orchestration’ activities. The funding is intended for the goal-oriented development of innovation cooperation in a business-driven ecosystem. Growth engines aim to create an innovative ecosystem (which can be expressed variously as joint visions/ research/ pilot/ demo projects, business models, activities etc.) geared toward developing new business initiatives that have ‘global market potential amounting to at least 1 billion euros in new exports’. The objectives are therefore primarily economic but Growth Engines were ‘particularly welcome’ on data economy, circular economy and low carbon economy themes. Some Growth Engines have objectives directly related to the reduction of GHG emissions, such as GreenE2, Flexens or the Compensate Platform company that aim to ‘establish an ecosystem that enables the compensation of carbon dioxide emissions easier in international scale, while creating business opportunities for Finnish companies’.
The systemic nature of societal challenges requires that mission co-ordinators and “ecosystem orchestrators” have not only a broad range of competencies, but also adopt different perspectives, more holistic and proactive ones, i.e. involving different sectors and disciplines at the same time, and not only responding to their respective needs and demands as service providers. As research and technology organisations (RTOs) are hybrid organisations in many regards (interdisciplinary and cross-sectoral scope, public-private status, involved in science and industrial development, providing services to industry and administrations), they appear well-suited to perform this function in many cases. In one OECD study on the contribution of RTOs to solving societal challenges (Larrue and Strauka, 2022[12]), interviewees used different labels to describe the emerging role of RTOs: “system intermediaries”, “orchestrators”, “transition architects”, “innovation system hub”’, “virtual OEM”, “system platforms”, “system translator”, etc. (Box 5.2).
Research and technology organisations (RTOs) play an active role in many ecosystem-based missions. This role calls for new capabilities such as the “convening capacity” (Olsen-Boyd et al., 2023[13]), in addition to new forms of technological knowledge and expertise. In Europe, participation in large European-funded projects, from FP6’s Integrated Projects to the various European Partnerships, have been instrumental in helping European RTOs further develop these capabilities. Evaluations of the strategic innovation programmes provide evidence that these initiatives have had significant systematic impacts, by gradually achieving a national joining of forces and mobilisation, both across traditional sectoral boundaries and along value chains. RTOs (notably the RISE institutes) have significantly contributed to this “by fulfilling a system integrating function, especially with regard to industry” (Åström, Arnold and Olsson, 2021[14]).
A Finnish impact study analysing in detail several ecosystems using network graphs showed the role that the Finnish RTO VTT played in several of them as a link between different actors (Zegel et al., 2021[15]). VTT was even one of the key actors in 2015-16 to think and help design the national ecosystem approach with public authorities. While VTT is not the only actor to play this role (some universities and large companies are also network “nodes”), it is non-equivocally the one that ensures this bridging function in the greatest number of ecosystems and appears more central in ecosystem network graphs. VTT also leads and formally acts as the formal co-ordinator of several of these ecosystems (such as Smart Otaniemi in smart energy solutions or BATCircle in battery materials and component development). VTT has created a position of “co-creation managers” who oversee specific eco-systems. Several other RTOs play advisory or co-ordinating roles to support mission-oriented policies, for instance in Austria (Austrian Institute of Technology, Joaennum), Germany (Fraunhofer) and France (Alternative Energies and Atomic Energy Commission).
Some of the largest RTOs, especially when their functions expand beyond research implementation toward agency activities, have launched missions within their organisation to foster internal collaboration between their various centres and departments and build ecosystem-wide partnerships with external partners to achieve clear goals. In Australia, the Commonwealth Scientific & Industrial Research Organisation (CSIRO) launched its Mission Programme in August 2020. Missions represent significant five to seven years partnerships that harness the power of science and technology to create meaningful outcomes that cannot be attained by a single organisation alone. These missions are designed to mobilise science, technology and innovation with the aim of tackling well-defined goals associated with one or multiple national challenges. CSIRO has launched eight missions: 1) drought resilience; 2) ending plastic waste; 3) future protein; 4) hydrogen industry; 5) trusted agrifood exports; 6) towards net zero; 7) minimising antimicrobial resistance; and 8) AquaWatch Australia. CSIRO mostly initiates missions internally first, then engages partnership with government and industry stakeholders across Australia to co-develop and crowd-in the missions, gathering the resources and competencies needed to implement them. These include government bodies, academic institutions, industry partners and the broader community. Missions at CSIRO are supported by a dedicated Mission Office. All missions have a unique mission co-ordinator and a dedicated governance structure, including an advisory group composed of representatives of public and private organisations involved in the mission.
In Canada, the National Research Council launched internal Challenge Programmes in 2019. These programmes bring together for up to 7 years, researchers and facilities across the National Research Council’s 14 research centres, with academic and industrial partners to advance transformative, high-risk, high-reward research that addresses Canadian priorities. In 2022, there were nine National Research Council programmes. For instance, the Materials for Clean Fuels Challenge aims to develop transformative technologies to sustainably transition Canada’s energy and chemical industries to a low-carbon economy through materials innovation (including the Materials for Clean Fuels Programme). The mission has received about EUR 40 million in funding for the seven-year period (2019-26). It follows a funnel approach whereby the number of projects in the programme decreases and the amount of investment per project increases over time.
Source: (Larrue and Strauka, 2022[16]); OECD MOIP Online Toolkit, https://stip.oecd.org/moip.
References
[14] Åström, T., E. Arnold and J. Olsson (2021), Meta-evaluation of the Third Round of Strategic Innovation Programmes After Six Years, Technopolis, https://www.vinnova.se/contentassets/e9aafdfe5f67491ab2f7016758458ac5/metautvardering-av-andra-omgangen-strategiska-innovationsprogram-efter-sex-ar.pdf?cb=20201215174117.
[8] Bonvillian, W., R. Van Atta and P. Windham (2019), The DARPA Model for Transformative Technologies: Perspectives on the US Defense Advanced Research Projects Agency, Open Book Publishers, Cambridge, United Kingdom, https://doi.org/10.11647/OBP.0184.
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[4] Council of the European Union (2022), Council Conclusions on European Missions (Adopted on 10 June 2022), Brussels, https://www.consilium.europa.eu/media/56954/st10124-en22.pdf.
[11] European Commission (2023), Portfolio Analysis EU Mission “Restore Our Ocean and Waters by 2030”: Analysis of a Portfolio of Projects Financed by Sixteen EU Programmes Contributing to the Objectives of the Mission Ocean and Waters, Directorate-General for Research and Innovation, European Commission, https://data.europa.eu/doi/10.2777/683.
[10] European Commission (2020), Implementation Strategy for Horizon Europe – Version 1.0, Directorate-General for Research and Innovation, European Commission, https://research-and-innovation.ec.europa.eu/system/files/2020-04/ec_rtd_implementation-strategy_he.pdf.
[12] Larrue, P. and O. Strauka (2022), “The contribution of research and technology organisations (RTOs) to socio-economic recovery, resilience and transitions”, OECD Science, Technology and Industry Policy Papers, No. 129, OECD, Publishing, Paris, https://doi.org/10.1787/ae93dc1d-en.
[16] Larrue, P. and O. Strauka (2022), “The contribution of RTOs to socio-economic recovery, resilience and transitions”, OECD Science, Technology and Industry Policy Papers, No. 129, OECD Publishing, Paris, https://doi.org/10.1787/ae93dc1d-en.
[7] OECD (2022), Tackling Policy Challenges Through Public Sector Innovation: A Strategic Portfolio Approach, OECD Public Governance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/052b06b7-en.
[2] OECD (2018), “Effective operation of competitive research funding systems”, OECD Science, Technology and Industry Policy Papers, No. 57, OECD Publishing, Paris, https://doi.org/10.1787/2ae8c0dc-en.
[9] OECD (Forthcoming), “Mission portfolio management: towards a dynamic practice”, OECD Science, Technology and Innovation Working Papers.
[3] OECD and DDC (2022), Mission-oriented Innovation Needs Assessment Survey: Highlights & Insights on Mission Work, OECD and Danish Design Center, https://ddc.dk/wp-content/uploads/2021/10/REPORT-mission-needs-assessment-survey-110222-.pdf.
[13] Olsen-Boyd, A. et al. (2023), Convening Missions: A Playbook for Collective Implementation of Mission-oriented Innovation, CSIRO, Brisbane, Australia, https://www.csiro.au/-/media/Missions/CSIRO_MissionPlaybook.pdf.
[5] Roth, F. et al. (2022), “Putting mission-oriented innovation policies to work: A case study of the German High-Tech Strategy 2025”, Fraunhofer ISI Discussion Papers Innovation Systems and Policy Analysis, No. 75, https://www.isi.fraunhofer.de/content/dam/isi/dokumente/cci/innovation-systems-policy-analysis/2022/discussionpaper_75_2022.pdf.
[6] UNDP (2022), System Change: A Guidebook for Adopting Portfolio Approaches, United Nations Development Programme, Bangkok, https://www.undp.org/sites/g/files/zskgke326/files/2022-03/UNDP-RBAP-System-Change-A-Guidebook-for-Adopting-Portfolio-Approaches-2022.pdf.
[15] Zegel, S. et al. (2021), World-class Ecosystems in the Finnish Economy: Impact Study, Business Finland, https://www.businessfinland.fi/4a702b/globalassets/julkaisut/World-class-Ecosystems-in-the-Finnish-Economy-2-2021.pdf.
← 1. Climate change is the most frequent challenge tackled by MOIP initiatives identified to date, followed by health and healthcare issues.
← 2. Team calculation based on data retrieved on 20 September 2022 for 289 policy instruments with replies to the grant duration question in the STIP Compass database, in the same countries with net zero missions covered in the OECD study (https://stip.oecd.org/stip).
← 3. About 50% of missions. In some cases, budgets per year were calculated based on overall budgets divided by the number of funding years.
← 4. This analysis is based on the authors’ appreciation of missions’ rationales presented in available mission documents. It should be considered tentative at this stage.