204to enter the regime. For this reason, regimes have intrinsic tendencies to foster stability and path dependence. Lastly, we have the landscape level. Here, we have a collection of macro trends that affect the regime, but are beyond the direct control of actors and institutions in the regime. These include, for example, globalization, changes in demography, general technological advancements, alterations in policies, and external shocks such as wars or pandemics. While these macro trends and events cannot be influenced by the regime, they nevertheless influence the regime and the emergence of various innovations from different niches.

A system transformation, according to Geels, can be thought of as the successful emergence of an innovation from a niche, which survives and makes its way into an Third-Generation Innovation Policy: System Transformation or Reinforcing. . .

205established regime, which in turn is altered to such an extent that its directionality is fundamentally changed.

3.1

Technology Transitions as Creative Destruction

Based on Geels’ (2004) framework and related literature, several barriers to successful system transformation can be identified. To any policymaker aiming to accomplish system transformation, these barriers and how policies relate to them are of critical importance. Below, we expand on some of these barriers as depicted in various literature concerning institutions and political economy. Thus, the following paragraphs should be read as an attempt to unpack and highlight some of the ideas underpinning the multi-level perspective, specifically with regard to its relevance for innovation policy. Broadly speaking, the emergence of a significant innovation and efforts to penetrate a regime can be thought of as a Schumpeterian process of creative destruction. According to Schumpeter, innovation is the primary source of value creation in society as it enables the economy to transcend established trade-offs. This