TUM School of Management is part of PRME (Principles for Management Education), a UN Initiative aiming at “developing the responsible decision-makers of tomorrow to advance sustainable development”. Sustainable Development is often associated with innovation, or more precisely with “good innovation”. But, what is good innovation? And, how does it relate to public policy, and society? To understand this, we spoke with Sebastian Pfotenhauer, who is Associate Professor for Innovation Research at the TUM School of Management and Co-Director of the Munich Center for Technology in Society, where he heads the Innovation, Society and Public Policy Research Group. He is also the coordinator of the federally funded “Munich Cluster for the Future of Mobility in Metropolitan Regions (MCube)”. He shared with us very important insights about what makes innovation good and about how it can be instrumental to achieve sustainable development. We report key highlights from our interview below.

What is “good” innovation?

That’s an extremely interesting question that, in a way, is also the heart of the research program of my group and that I’m trying to address in my classes. So in a way, my research and teaching suggest a paradigm shift from simply “more innovation” – what I have called the “innovation imperative” – to a more nuanced understanding of what kind of innovation is actually socially desirable, and how can we shape innovation in ways that reflect the specific social, cultural, and political commitments of diverse groups and societies. “Good innovation” is a mission that treats innovation processes accordingly as social-political processes, not just techno-economic ones. It is also about recognizing that the obsession with innovation might crowd out other solutions or important social issues that might not require innovation to fix them.

How do innovations shape diverse societies and cultures?

It is important to realize that different societies, and certain groups within societies, understand the benefits and risks of innovation differently. For example, in the 1990s in the US, genetically modified crops were seen as an extension of existing biotechnologies, not fundamentally different or riskier, and were hence understood to be well covered under existent regulatory frameworks. In contrast, Britain chose an unusually scrupulous approach to GMOs after having recently been hit by the mad cow disease crisis, which considerably undermined public trust in risk management by government authorities and experts. Germany, against the backdrop of decades of strong environmental movements, took an extremely cautious, incremental strategy, detailed regulation, and publicly monitored experimental procedures to test the effects of GM crops. Some of the rationales have changed, but even today Europe and the US remain sharply divided over the use of GMOs. Thus, innovations do not travel across nations, cultures, and jurisdictions as easily as trade economics would have us believe.

What does that mean on the broader spectrum?

Innovations are never separate from their social embedding, and in democratic societies, the effects of technology will always encounter a diversity of political positions and social preferences. To pretend that this is not the case and to wish that controversies would magically go away fundamentally misunderstands what innovation is about: social change. Trying to resolve these conflicts through appeals to “rationality” or by insisting that the benefits or a technology are “clear” fails to recognize that people might reject technologies or certain forms of expert advice for reasons that have nothing to do with irrationality or ignorance.

What are the most important steps powerful institutions have to take in driving sustainable innovation?

For one, I think it requires a fundamental change in the way universities – and especially technical universities as hotbeds of innovation – conceive of their role as mediators between technology and society. This affects every part of their mission, from the way they educate the next generation of engineers and leaders, to the way they steer and reflect on their own research, all the way to their role as spaces of public debate and dialogue about innovation and the future of society.

What does that look like at both TUM and the TUM School of Management?

TUM has recently taken a number of critical steps to put social responsibility at the heart of its technological mission, from novel educational programs such as the Master’s in “Responsibility in Science, Engineering and Technology” to novel institutional units such as the center that I am co-heading, the “Munich Center for Technology in Society”. At the TUM School of Management, we have embraced responsible technology leadership as a core value and put in place additional incentive structures to emphasize the Sustainable Development Goals in our teaching and research. For several years now, we have tried to highlight opportunities for students to engage with what we call Ethics, Responsibility and Sustainability (ERS) issues. Students respond very positively to these steps – and they also demand them. This is why it’s so important to be ahead of this trend.

Who benefits from innovation and who loses – and what can business schools do?

Innovation always produces winners and losers — as do other forms of social change. At business schools, we need to become better at providing the resources for firms anticipate and address the social consequences of innovation as part of corporate responsibility culture, e.g. at the nexus of R&D and CSR. This is particularly critical for early-stage start-ups, where traditional CSR mechanisms often don’t stick, and which might scale very rapidly. Second, we need to recognize that innovation is always a redistributive social and political process, not just a techno-economic one. Questions about precarious employment of an entirely new class of drivers for Uber, or about potential genetic or digital discrimination, are deeply political. When we accept how political those questions are, the logical consequence is that those who are affected by them should have a say in it – for example by democratizing innovation. Third, we need to watch out for macro-effects in what some have called a ‘new gilded age.’ Last month, we had two billionaires fly to space, with Jeff Bezos thanking all Amazon employees and customers for making it possible. What does this say about the effects of innovation?

What needs to change to get everyone involved in sustainable innovation?

For me, sustainable innovation has to do with being able to live with the consequences of innovation long-term. People are feeling uneasy with the power of Big Tech and with current debates about vaccination mandates or carbon taxes – all of which can be framed as questions about the long-term relationship between innovation, society, and public policy. To be sure, technology controversies have always existed, but today they seem heightened. This is due to growing social media attention, knowledge pluralization and greater awareness of the unintended consequences of technological progress. This unease occurs because people realize how much technologies shape who we are and how we live, which in turn raises the question how people can be involved in shaping these technologies.

Traditionally, science and technology have been created mostly by small expert communities, such as engineers, scientists, policy-makers, and entrepreneurs. Yet, in the current world, with some unwanted consequences so starkly in our face, this traditional model seems likely insufficient. Sustainable innovation in this sense means not just thinking about sustainable products and services, but also about how to change innovation processes with a view towards public legitimacy, social robustness, inclusiveness, and anticipation of unintended consequences. In other words: How do we want to govern innovation as a driver of social change, whose consequences we will all have to live with?

How is innovation shaped by social, economic, and policy processes?

There is lots to say here. Maybe the most important is that the relationship between innovation and social, economic and political processes cuts both ways. Take digital social media platforms. It is easy to see how different social contexts and regulations have led to quite different uses of Facebook, Twitter, TikTok, etc. across cultural and regulatory, even if these platforms are supposedly global. At the same time, it’s hard to miss how social media has changed how we as societies communicate with one another, how there is an entire new influencer economy, and how election processes differ from, say, 10 years ago. What is more, there is a core set of socio-economic assumptions about who gets to drive this massive social change based on which ideas about “value,” which in the case of social media platforms is decidedly driven by venture capital and scalability logics out of Silicon Valley, combined with the revenue models of the data economy. This multi-layered mutually constitutive dynamic between innovation and social change is what Harvard STS scholar Sheila Jasanoff would call “co-production.”

How can innovation be governed responsibly?

That’s the question, isn’t it? While entrepreneurs move fast and break things, and often disrupt societies at a large scale, the traditional view is that policy-makers and society to play catch-up with technology rather than self-consciously taking the drivers’ seat. To address these shortcomings, the concept of “responsible innovation” has been gaining traction in academic, policy and corporate contexts. There are different frameworks and notions out there – but the basic idea is the same for all of them, and it points to the process dimension of innovation: How can we make meaningful changes “upstream” in innovation trajectories together with those that will be affected “down-stream”? Some frameworks highlight the importance of certain organizational capacities, e.g. for anticipation, reflexivity, inclusiveness, and adaptiveness; others, like the European Commission, emphasize a more formalized “check-box” approach to, e.g., gender balance or ethics certification.

This sounds rather easy – where do you currently see issues?

Most companies still lack a “social responsibility” approach to innovation. This is highly problematic since companies are the driving forces behind innovation in many sectors! You can see this struggle in the very visible public failures and criticisms of initiatives such as Google’s AI Ethics Board or the Facebook Oversight Board. We analyzed this tricky situation for neurotech startups in a recent Nature Biotechnology article (Pfotenhauer et al. 2021).

We thank Prof. Dr. Sebastian Pfotenhauer for this insightful interview. If you want to find out more about the sustainability approach of the TUM School of Management, be sure to read our PRME report.