The Influence of Quangos on National Systems of Innovation – Case Studies of the Estonian Genome Project and e-Learning Initiatives

Abstract

Innovation can be regarded as one of the most important factors in enhancing economic development. However, innovation management policies are extremely complex and dynamic in the sense of constant change and uncertainty. This complexity is significantly compounded by the fact that the public sector itself is constantly changing as well. In broad terms, this is about the transformation processes in policy making both in developing and developed countries, where the hierarchical model of government as the predominant organisational model to fulfill public goals is losing its power to market mechanisms with supposed creative and specialised capacity of enterprises, quasi-autonomous non-governmental organisations (quangos), third sector etc. The inadequacy, if not absence, of scholarly attention to the effect that aforementioned organisations have on the implementation of innovation policy is the most important aspect in the context of this paper. As the actual effect of quangos on a NSI remains unclear from the literature and as the effect is very much context-specific, the analysis of two case studies is carried through to explore the theoretical implications in practice. Derived from this, in more narrow terms, this paper is to explore how increasing usage of quangos has affected the functioning of a NSI and its performance in two ‘core technologies’ in Estonia: on the one hand, in biotechnology (especially the Estonian Genome Project), and on the other hand, in information and communication technology (e-Learning initiatives). Both areas are stated as the priority areas in the development process of catching up and building up the knowledge-based society in Estonia. This paper argues that the decentralised organisational set-up has caused serious problems in policy impact and can be seen rather as a tool used by the government to shift responsibility (including financial) from itself.