Legal–institutional design and dynamic capabilities for mission-oriented innovation agencies: a new framework

Abstract Recent scholarship emphasizes the need for mission-oriented innovation policies (MOIPs) to tackle grand challenges and the importance of dynamic capabilities in innovation agencies for their implementation. However, the development of dynamic capabilities in innovation agencies, especially in relation to the legal and institutional design of such agencies, remains understudied. We propose a framework integrating research on innovation policy, dynamic capabilities, and legal institutionalism, adapting the three high-order dynamic capabilities—sense, seize, and transform—into nine more concrete low-order capabilities for implementation of MOIPs. We also look at rules and institutional design related to five groups of routines affecting the development of dynamic capabilities: (1) governance, (2) organizational design, (3) budget and finance, (4) public procurement and partnerships, and (5) human resources. We conclude by outlining the analytical and policy implications for (re)designing innovation agencies to implement MOIPs.