The rise of systemic instruments in innovation policy Ruud Smits* and Stefan Kuhlmann Department of Innovation Studies, PO Box 80125, 3508 TC Utrecht University, The Netherlands Fax: +31-30-2533939 E-mail: r.smits@geog.uu.nl *Corresponding author Abstract: Starting from the co-evolutionary development of innovation practice, theory and policy, five functions are identified that play a crucial role in the management of present-day innovation processes: (1) management of interfaces, (2) (de-) construction and organising (innovation) systems, (3) providing a platform for learning and experimenting, (4) providing an infrastructure for strategic intelligence and (5) stimulating demand articulation, strategy and vision development. From a first analysis of innovation policy instrument portfolios it is concluded that the already existing instruments only cover a small part of the five `systemic' functions. Furthermore it is concluded that the portfolios are heavily dominated by financial instruments. It is argued that the development of a (relatively) new type of instrument, the systemic instruments, should be furthered in order to tune the instrument portfolio better to the needs of actors involved in innovation processes. In order to obtain a better insight into the characteristics of systemic instruments, their success and fail factors, and into strategies for their further development, effectiveness and use, an analysis of four systemic instruments avant la letter is presented. From this analysis conclusions concerning the need for and best practice of systemic instruments are drawn, suggestions for policy are derived and questions for further research are proposed. Keywords: innovation policies; innovation studies; innovation systems; policy instruments; systemic instruments. Reference to this paper should be made as follows: Smits, R. and Kuhlmann, S. (2004) `The rise of systemic instruments in innovation policy', Int. J. Foresight and Innovation Policy, Vol. 1, Nos. 1/2, pp.4±32. Biographical notes: Ruud Smits is Professor of Technology and Innovation, with a particular interest in the Strategy and Management of Innovation Processes of the Department of Innovation Studies of Utrecht University. Stefan Kuhlmann is at the Fraunhofer Institute for Systems and Innovation Research (ISI), Karlsruhe/Germany, and is part-time Professor of Innovation Policy Analysis of the Department of Innovation Studies of Utrecht University. Both participate in the Copernicus Research Institute for Innovation and Sustainability. Int. J. Foresight and Innovation Policy, Vol. 1, Nos. 1/2, 2004 4 Copyright # 2004 Inderscience Enterprises Ltd.