The US’ Polycentric Innovation State

Abstract

This paper analyses US innovation policymaking since the 2008 Global Financial Crisis, as prevailing political economy accounts, such as the Varieties of Capitalism, often under-conceptualise the extensive federal and state governmental roles in fostering innovation. Employing inductive process tracing, the study analyses federal innovation strategies alongside those of Maine and Michigan using the Polycentric Innovation State framework, characterised by multi-level governance, regional diversity, crisis-driven adaptation and non-market coordination. The findings reveal an evolution in federal approaches towards mission-oriented policies targeting a range of high-tech sectors using non-market coordination and catalytic mechanisms. This is complemented by variegated, place-based state strategies, such as Maine upgrading its resource-based industries and Michigan supporting innovation in the automotive sector alongside broader economic diversification, reshaping each state’s regional growth regimes towards high-tech sectors, aligned with their comparative advantages. This analysis demonstrates how both federal and state governments support America’s complex, multi-level innovation system.