Towards a sustainable innovation system for the German wood-based bioeconomy: Implications for policy design

In recent years, the EU and several of its member states have adopted strategies in support of a renewable resource-based bioeconomy. It is promoted as a promising means of making economic processes and products more sustainable, with expected contributions to a range of policy aims. However, by increasing the demand for bio-based resources, bioeconomy concepts also impose additional pressures on ecosystems. In limiting these pressures, innovations regarding the use of biogenic and non-biogenic renewable resources play an important role. A well-developed innovation system for the bioeconomy must enable immature renewable resource-based technologies to progress down the learning curve, to eventually reach competitiveness with fossil resource substitutes; second, innovation efforts need to be steered towards bioeconomy pathways with favourable environmental characteristics; third, innovations need to be socially acceptable. Focussing on the case of the German wood-based bioeconomy, this contribution examines the role that policies can play in shaping such an innovation system. First, we review what policy contributions are considered as key for strengthening transition-oriented innovation systems in the innovation economics and innovation systems literature. We then apply these insights to the analysis of the case study’s innovation system, to identify systemic weaknesses and discuss policy implications. Notably, the transition towards a bioeconomy is characterised by a high degree of uncertainty and complexity, making the design of demand-pull policies particularly challenging. We conclude with policy recommendations for strengthening a sustainability-oriented innovation system for the German wood-based bioeconomy.