Designing performance-based incentives for innovation intermediaries: evidence from regional innovation poles

Intermediary organisations that support firm-level and collaborative innovation, often called ‘innovation intermediaries’, have gained increasing prominence in knowledge-intensive economies. They provide a range of knowledge-intensive services that include, among others, technology foresight and technology scouting, R&D partnership formation, technical assistance in R&D projects, dissemination and commercialisation of results, and technology transfer. In recent years numerous policy interventions have funded organisations performing at least some innovation intermediary functions, particularly at regional level. Examples are the Regional Competitiveness Poles in France, the Innovation Networks in Denmark, the Strategic Centres for Science, Technology and Innovation in Finland, and the Innovation Poles in Italy. With the growing importance of publicly-funded regional innovation intermediaries, a need has emerged for appropriate instruments to evaluate their performance. Nonetheless, few studies have explored theoretically the key performance dimensions of the activities of innovation intermediaries, with a view to support evaluation processes. This paper analyses what are the main dimensions that should be considered when evaluating the performance of publicly-funded regional innovation intermediaries. Building on a review of the literature on innovation intermediaries and their functions within regional innovation systems, we develop a conceptual framework capturing the key performance dimensions in the activity of publicly-funded regional innovation intermediaries, which could be used as a guide to develop indicators and other metrics for the evaluation of their performance. In particular, we tie these performance dimensions to the set of systems failures that innovation intermediaries are expected to address. These system failures include: information failures, whereby regional organisations are imperfectly informed about the sources of knowledge they can tap into; managerial failures, whereby organisations do not possess the capabilities needed to acquire useful knowledge or technologies, or to usefully implement them into products and services; awareness failures, whereby organisations may be unaware of the knowledge or competences they are lacking; networking failures, whereby organisations lack potentially useful connections; and cognitive failures, which occur when individuals from different institutional backgrounds have too much cognitive distance to adequately learn together. For each of the activities that intermediaries implement in order to address one or more of these system failures, we argue that several performance dimensions should be considered. Besides the direct outputs resulting from the intermediaries’ activities, and the indirect outputs resulting from follow-up activities in which the intermediaries had some involvement, the evaluation should particularly focus on the outcomes achieved. Outcomes can be in the form of improvements in measurable performance in the activities of the intermediaries’ client organisations, or of the intermediaries themselves: for example, how they increased their profitability or turnover or their success in acquiring funds. But outcomes can also take the form of behavioural changes: for example, how these organisations changed their way of innovating, and how the intermediaries improved their own systems and practices to achieve qualitatively better outcomes. We present an implementation of our conceptual framework, with a case study focused on an innovation policy intervention aimed at funding innovation poles (a particular type of innovation intermediary), implemented by the Italian region of Tuscany in 2011-2014.