Mobilising private investment to address societal challenges

2. Businesses’ motivations for engaging in mission-oriented policies

Challenges in engaging the private sector in mission-oriented policies

Countries struggle to understand the motivations for why the private sector engages in missions – particularly when it comes to broader societal challenges. Difficulties in incentivising business participation in societal missions is tied for the biggest weakness amongst the weaknesses from the mission survey of policymakers for crowding-in (representing 27% of the responses for challenges under this theme). Risk aversion from the private sector is the fifth most common response (6%). This low level of engagement can undermine the overall mission goals because many rely on the private sector to develop new innovations and broadly adopt them. What is more, private sector financing is required to mainstream and support the scale-up of novel technologies (Pessoa, Feil and Feijó, 2024[13]).

A clear distinction exists between how powerful missions are in changing the behaviour of companies when it comes to larger ones compared to SMEs. Large companies have the resources available to spend time on more complex problems and earlier-stage research. Larger companies are often more adaptable in aligning research with government challenge programmes or mission funding, and use these types of programmes as signals for where to direct some of their early-stage research investments. Large companies have the capacity to continuously support this work over a longer period of time, often taking part in several projects at once to explore what opportunities may pay off for them.

Bigger companies can afford to take a more strategic view than smaller ones. – Private sector interviewee

Basic research is more difficult for industry to co-fund. Only the biggest companies can afford to fund basic research. – Private sector interviewee

Smaller businesses, on the other hand, need to more clearly understand the business case for them to take part in these types of programmes, as they often have less of a focus on the bigger picture and are homed in on their immediate products or existing research. Some of these startups are pursuing more disruptive research naturally, while others are more focused on practical incremental innovations. At the same time, because they have limited resources, many small companies are not innovating constantly, so they may take part in one project and then stop or slow their engagement with missions. Smaller companies try to align their existing business lines and research with challenge programmes or mission funding so that they can continue to grow. This approach also risks ‘mission washing’ – adopting some of the language related to the mission in project applications but without meaningful change to what they would be pursuing otherwise (OECD Mission Lab, 2024[14]). Even when they are recipients of funding from mission-oriented programmes, many SMEs are often unaware of the missions they are contributing to.

We won’t start a new project because of a government call but maybe augment work underway if it fits into a call for proposals. Big US companies work the other way to us. When DARPA publishes a challenge, they jump on it to fund some of their early-stage research. Large American dual use or military companies ambulance chase calls a bit, particularly with DARPA. – Private sector interviewee

While many businesses are interested in these partnerships, there is also a degree of competition between companies that can get in the way of collaborating. At the same time, a common opportunity and threat can help drive collaboration, so missions can be used as tools to facilitate discussions and this collaboration. Depending on the sectors or technologies that missions focus on, IP and standards can be major hurdles – particularly if relevant companies have a competitive advantage they are seeking to cement. This hesitancy is sometimes less prevalent at earlier stages than when the research progresses along the technology readiness levels (TRLs).

There are a lot of businesses who seek to change in the right way but want to do it in their own way. Businesses are quite protective of their own products and processes and see standardising processes or having to change their products as eroding their competitive advantage – even if it would make the whole better. – Private sector interviewee

Equipment suppliers are interested in keeping their technologies for themselves, so they haven't participated in the mission. They prefer to keep their knowledge in house because a lot of their things are proprietary. – Private sector interviewee

Businesses also look for stability when considering whether to take part in mission-oriented programmes. Political uncertainty is a major deterrent for missions but this is an issue for green transformation at large, where government failures (e.g., lack of policy predictability and stability, regulatory barriers and a preference for incumbents) deter private sector investment, particularly in pollution-intensive sectors ( (OECD, 2023[15]) and (Berestycki et al., 2022[16])).

Technological uncertainty is another major barrier for businesses of all sizes when deciding if they will take part in a mission. Businesses consider what the call is asking for and the technology they could develop, but also the market opportunity for the technology. These decisions come with a high degree of uncertainty – even if companies have an idea of the end technology they may develop for an individual project – especially if an established market does not already exist for the mission area. These projects often need to get approved by companies’ boards, which may have concerns if the project creeps too far from the companies’ main scope. Some companies have scientific advisory teams who can help judge the scientific merit in pursuing a project.

When countries are able to engage with businesses, scaling up this engagement beyond individual projects or pilots is also a challenge because it requires more investment on the part of the company and the risk may remain quite large. Some policymakers attributed this hesitancy to the broader sociotechnical headwinds around the challenge. Following a shift in broader societal perceptions on a mission topic (e.g., regarding electric vehicles) industry momentum has accelerated. Other barriers policymakers point to are leading companies seeking to guard their existing comparative advantage or not seeing the business case around the mission areas – issues that they actively seek to change attitudes towards through ongoing engagement.

There are tipping points to crowding in. In the automobile industry, despite much public financing, industry was fighting against the transition. Now they are the ones pushing for accelerating the transition. – Conference breakout room

There is no clear case for making a profit from preventative interventions to healthcare. This is a wider problem for us as a society, but it is difficult to incentivise societal value creating if there is no business case. – Conference breakout room

While the ambition is clear, the challenge lies in reaching all target groups, particularly smaller companies with fewer resources.​ ​​– Mission survey response

Private actors feel more comfortable acting as followers of public institutions in this type of plan. ​​– Mission survey response

The added value of mission-oriented policies for businesses

Businesses participate in missions for a range of reasons. Firstly, many of them acknowledge the substantive importance of realising mission goals in creating a better society or planet, so try to support these goals for the broader social good. Businesses sometimes see supporting missions as charity for them to spend time on such priorities, when these issues may not be perfectly aligned with their core business. This can help them to curry favour with the government on related issues in the future.

Secondly, businesses appreciate the signals that missions provide in terms of governments’ longer-term priorities. When governments are able to demonstrate their commitment to these goals, it gives businesses certainty to invest in these priority areas. Several countries have sought to institutionalise their commitments to the mission goals and provide more certainty through legislation or dedicated multi-year budgets. The government of Korea enacts legislation for many of its flagship strategies across government. For example, it has legislation for the mission-oriented Comprehensive Plan to Solve Social Problems Based on Science and Technology, which requires it be reviewed and updated every 5 years. This plan is now on its third iteration, and it has become more mission-oriented after each update. It has taken a similar approach for its new mission-oriented programmes on strategic technologies and carbon-neutral technologies (OECD, 2025[17]). Some industry players try and take these matters into their own hands by lobbying representatives from different political parties to discuss the work they have underway, the investments they have made, and the importance of the overall portfolio of projects under the mission.

Crowding in private sector resources is related to political stability of the programme. Stable commitments make it more likely for investors to come on board. – Conference breakout room 

For us, the cross-sector collaboration was difficult – especially to get partners from other sectors to get on board. The different companies just don’t listen to each other. If we would do this again, we would add programmes, so that the partners would listen to each other more. – Conference breakout room 

If government changes, missions can change drastically. It was a concern for us that if a new government came in, then it could be an issue. 30% of our revenue comes from these types of programmes. If these are the missions the country sets, then that needs to be a longer term priority and not disappear. – Private sector interviewee

Thirdly, they see the benefit of missions striving to provide more integrated support. Businesses find traditional government support overly bureaucratic and disjointed. Missions strive to provide more coherence across government by aligning support for R&D with regulatory changes and funding for demonstration. At the same time, governments often have struggled to realise these more systemic approaches – falling into what the OECD has identified as the “STI trap” (OECD, 2023[15]).

In addition, businesses recognise the importance of collective action, and how the missions can act as new mechanisms for bringing together like-minded partners. STI collaboration is an important policy area at large, pooling financing, sharing skills, knowledge, and information (Rodrik, 2014[18]). These collaborations help in driving transformation because they support the establishment of innovation ecosystems and new value chains, and bring together novel combinations solutions from different technology domains or sectors that can disrupt established knowledge hierarchies (OECD, 2024[19]). Through these collaborations, companies can create wider value chain changes through rippling effects that drive the types of systems change often required for achieving mission goals (Booth et al., 2024[7]). By taking part in mission partnerships, companies hope that this work may result in new research collaborations or commercial partnerships.

Finally, some companies see the economic benefits of a mission in how the goals are aligned with their current business models and areas of research. As discussed above, the business case of missions is particularly important for smaller companies.