Mission-oriented innovation policy and dynamic capabilities in the public sector

This article contextualizes the reemergence of mission-oriented innovation policies in the broader search for a new type of innovation policies—and the appropriate organizational forms—that can tackle “grand societal challenges, ” and focuses on our knowledge gaps in designing and implementing such innovation policies. We identify the concept and practice of dynamic capabilities in the public sector as perhaps the key missing element in the search for the new generation of innovation policies. We offer a brief conceptual and historical overview of what constitutes mission-oriented policies, focusing on two key elements of missions: coordinated public investments and market-shaping policies to “crowd in” private and third sector experimentation and innovation. The article concludes by briefly discussing the central public sector dynamic capabilities for 21st-century missions.