Demand-side innovation policies (Nature, instruments, policy rationales, challenges and the implementation trend)

Governments’ intervention in enhancement of innovation through innovation policy making may be made in developed countries to maintain competitiveness but in developing countries like Iran, could be for the aim of catching up promotion at national level. So, for our country applying right and effective policies has critical importance.
In our country the supply-side innovation policies, such as establishment of academic and government research institutions, supporting research and development in industry, have been implemented since last decades, and in recent years, in the form of effective programs such as, Innovation and Efflorescence Fund, have become more diverse.
In the last two decades, a new wave as demand-side innovation has been emerged in the area of innovation policies which has been taken into account seriously by the related experts; in their opinion, the result would be effective if demand- side policies accompanied by the supply- side one.
In demand-side policies category, various tools such as, innovation-oriented public procurement, innovation-based regulations and standards, and labeling are being used. The purpose of this paper is to provide more understanding of demand-side policies, their policy logic, a variety of policy instruments applicable in this field, challenges ahead in using them, and explain the image of these policies implementation trend in Europe.