7.3 Challenges and research questions

In a recent article, Van Bueren and Klievink (2017) describe five institutional challenges: 1) a fragmented decision-making structure (as a result of decentralisation and deregulation); 2) the increasing dynamics in decision-making (whereby institutions transform and break down), 3) the rise of the private equity firm; 4) the declining role of knowledge in policy processes (accompanied by a shift to data-driven methodology); and finally 5) the expanding policy discussions.

While these challenges - often fueled by societal transitions and technical innovations - follow at a rapid pace, institutional change is often inherently slow. There is therefore a constant danger that existing institutions no longer match the new reality or offer insufficient room for transitions and innovation. At the same time, institutional voids can also arise, where there is no appropriate institutional framework to address and resolve the issue in question (Pelzer et al., 2019). Innovative companies such as Uber and Airbnb often take advantage of such gaps to launch new technology and business models. On the one hand, they disrupt institutions, but they also elicit a reflexive process that can lead to new institutions. In other cases, there may be institutional pressure, a challenge can then be addressed from multiple regulatory frameworks. The question then is which framework is used and under what circumstances a new framework can be created.

As a result of these constant challenges, we must look to new ways and methods of institutional change. This can be done through deliberate interventions, but also often happens through processes of emergence, evolution, and serendipity. In reality it is mainly a combination of conscious and unconscious action. The challenge for policymakers is how to steer institutional change under dynamic, complex and uncertain circumstances. While different solutions exist, each lurks an apparent dilemma. For example, how to deal with institutional inertia versus highly dynamic change? Loosening institutions and allowing them to move with them can offer a solution, but at the same time it can also undermine mechanisms of institutional stability (such as the constitution). Transformational and rapid change can be an effective means of closing institutional voids, but often inevitably leads to frictions with existing institutional structures.

Research questions The challenges described above raise new research questions. A small selection of these questions is:

• How can we design mission-driven innovation policy so that it is both effective and legitimate for those involved?

• What is the role of new organisational forms in mobilising resources, commitment and knowledge about societal problems and possible innovative solutions?

• What is the role of leadership in bringing about institutional change, and what new forms of leadership are needed for this?

• How can successful practices and institutions be transferred from one context (domain, sector, region, time) to another context?

• How can institutions on the one hand adapt to technological dynamics and on the other hand retain their desired guiding effect?

• How can a radically new solution to a societal challenge obtain support from those involved?

• How can institutional arrangements that promote transitions be designed in collaboration with citizens and stakeholders?

Need for new methods The institutional environment in which transitions take place has become increasingly diverse and dynamic. New and experimental methods can help to learn from institutional change, such as living labs that gain new insights into the microprocessing of change. New methods can build on the aforementioned methods, such as incremental change, institutional logics and comparative methods. This can lead to new insights into the institutional mechanisms that determine the effectiveness and lifespan of transitions. For example, what could cause existing power structures that have an interest in maintaining the status quo to be subverted? Or understand why many attempts at desired social change fail and only a few are successful. This means that we must also distinguish between aspects of institutions that are changeable and negotiable, under what conditions, how, and by whom? An important aspect in this is the time factor, which requires methods that go beyond a snapshot and offer the possibility to observe and monitor for a longer period of time. At the same time, historical insights can help by providing insight into how current societal challenges have been solved in the past. After all, innovation is timeless.

In addition, there are still many steps to be taken within the design methodology for institutional change that can ensure a better connection with transitions. One of the options for this is technology assessment and participatory monitoring, in which citizens or other stakeholders are involved in monitoring the effects of interventions. This also includes new methods that are specifically aimed at network governance and that can promote cooperation between different actors and sectors. It can ensure an increase in trust between parties and ultimately more support for innovations. Various initiatives have recently emerged from the government, such as the new Environmental Act or the discussed Right to Challenge, which provides a rich breeding ground for developing new insights and methodology.

Finally, there is a great need for methods that can integrate insights from emergence and design methodology. While promising steps have been taken for both over the past three decades, they are often unrelated. In addition, institutional methodology is spread over various disciplines such as economics, political science, and sociology. Integration is also desirable here. The energy transition is a good example of the fact that many solutions can no longer be approached from a single discipline. For the time being there are a multitude of analysis methods, but the field of consciously developing a systematic framework is sparse.