Distribution sensitive innovation policies: Conceptualization and empirical examples

Innovation is essential to economic growth. However, it appears that the ways in which we pursue innovation policies generate economic inequities. In this paper, we explore policies that could be devised and employed with the aim of increasing growth while taking into account economic distribution. We call these policies distribution-sensitive innovation policies (DSIP). Following an exploratory theoretical approach, the paper focuses on a specific set of DSIP which are focused on particular groups of disadvantaged producers and consumers. We first categorize such programs into four types, and then employ a comparative approach to analyze existing programs in terms of these types, first, in our primary case study, Israel, and, then, using the United States, Germany, and Sweden as limited shadow cases to elaborate on the finding from our primary case. We conclude by arguing that although these programs are currently driven primarily by a concern for economic efficiency and not distribution, they show that our approach utilizing innovation policy to reach dual economic and social policy goals has potential for success.