Developing climate solutions: Role of national systems of innovation

National systems of innovation can play a key part in harnessing the power of technology to find transformative climate solutions

Climate technologies play an important part in addressing climate change, which can be seen at the national as well as global level. By blending technological, institutional, and social innovations, national systems of innovation can accelerate climate action and unlock solutions that leverage the unique capacities of different actors to collectively drive the transition towards a green, resilient, and climate-smart economy.

When the United Nations Framework Convention on Climate Change (UNFCCC) was established in 1992, it already highlighted the need for a transfer of technology and provision of finance from developed to developing countries (Articles 4 and 11). Building on this, the Paris Agreement in 2015 dedicated an entire article (Article 10) to “technology development and transfer in order to improve resilience to climate change and reduce greenhouse gas emissions,” further underlining the importance of climate technologies.

“Technology” in this context is used in a broad sense and can include mitigation technologies (e.g., wind or solar energy), adaptation technologies (e.g., drought-resistant crop varieties or early warning systems), and “soft” technologies, such as energy-efficient practices or technology-related training. As part of the overall means of implementation, technology also closely connects to both climate finance and capacity-building, which are crucial for the development, transfer, deployment, operation, and maintenance of climate technologies.

Building national systems of innovation

At the national level, the enabling environment is crucial for the effective utilisation of climate technologies and fostering innovation. As stated in Article 10 of the Paris Agreement, “accelerating, encouraging, and enabling innovation is critical for an effective, long-term global response to climate change and promoting economic growth and sustainable development.” A national system of innovation can support and align the efforts of different actors and provide the institutions and linkages that form the foundation for domestic systems of research and development that can produce indigenous technologies and homegrown innovation.

But what is needed for a strong national system of innovation, especially in a climate-vulnerable developing country such as Sri Lanka? How can the potential of technology be unlocked and connected in practical ways to the actors who can effectively manufacture, diffuse, and scale it—such as start-ups and entrepreneurs, the private sector, local governments, or national institutions?

The key building blocks for a national system of innovation include education (including technical and vocational education and training); research and development; and a conducive policy and regulatory framework. Together, these building blocks can produce a skilled workforce and create a research base at the heart of the innovation system, allowing different entities—such as universities, research institutions, and think tanks—to attract and retain talent. The stability and predictability of this enabling environment is a significant factor to enable long-term research and development activities, while regulatory sandboxes and innovation spaces can help to jump from incremental technology development to technological breakthroughs.

In addition, a strong national system of innovation brings together resources and capacities from different actors and provides strategic coordination and alignment with a national research agenda and/or development vision. For example, this can be supported through transparent flows of information and data availability; collaborations and partnerships between the public sector, academia, and the private sector; or cross-sectoral cooperation. Fostering market demand for climate technologies can further unlock innovation and support the transition from technology adoption to genuine technology deployment and scaling, allowing enterprises to find commercial applications and mobilise capital and investment from a variety of sources.

From strategy to implementation: Making innovation a reality

A key challenge for enhancing national systems of innovation is the need to move from strategic prioritisation to technology development, commercialisation, and large-scale diffusion. Fragmentation of efforts, data gaps, insufficient funding, or resistance to change can pose barriers to the widespread adoption of climate technologies.

Therefore, beyond a solid foundation in education, training, and research that builds scientific, engineering, and design capabilities, finding technology-driven climate solutions also requires a mindset shift towards innovation, experimentation, and risk-taking. De-risking investment and providing dedicated grant or loan schemes could provide additional incentives in this regard and support innovators in understanding users, markets, and the linkages between the two. Access to both domestic and foreign markets as well as policy review and feedback systems that measure impact and support the iterative improvement of the innovation ecosystem are other key aspects of technology at the national level.

At a larger scale, developing countries need financial and technical support for product development, demonstration, manufacturing, and business model development. National systems of innovation are indispensable for a successful transition and can play a key part in harnessing the power of technology to find transformative climate solutions. As countries work towards their national as well as collective global climate goals, strengthening these systems offers a powerful pathway for climate change mitigation, adaptation, and long-term green growth. 

(The writer works as Director: Research & Knowledge Management at SLYCAN Trust, a non-profit think tank based in Sri Lanka. His work focuses on climate change, adaptation, resilience, ecosystem conservation, just transition, human mobility, and a range of related issues. He holds a Master’s degree in Education from the University of Cologne, Germany and is a regular contributor to several international and local media outlets.)