An effective policy design for controlled-environment food production systems in urban settings

Novel types of food production, such as controlled environment food production systems (CEFPS), are widely vaunted as a promising approach to achieve a more resilient food system capable of feeding a growing global population with local and high-quality food within planetary boundaries. CEFPS are also expected to be more resilient against sudden shocks such as the Covid-19 pandemic. However, urban CEFPS are not well aligned with different public policies at European, national and local level, which are geared towards the regulation and support of existing food production systems rather than new and emerging ones. In order to design effective policies for urban CEFPS, we must understand how well the respective innovation systems fulfil seven functions that are essential for the successful implementation of any innovation: entrepreneurial activities, creation of knowledge, knowledge diffusion, guidance of the search, market formation, mobilization of resources and creation of legitimacy. The functional analysis includes an in-depth examination of the interactions with the current regulatory framework and builds the foundation for the design of a regulatory framework that fosters sustainable and resilient food innovations. Using the case of an innovative CEFPS in Germany, this paper combines a systemic innovation system analysis with a policy design approach to develop effective policy designs for urban CEFPS from a bottom-up perspective. It assesses the systemic innovation policies needed to support the implementation of urban CEFPS in the regulatory framework at European, national and local levels. First, a document analysis was carried out to identify relevant legislation for urban CEFPS at European, national and local level. Subsequently, 12 semi-structured expert interviews with stakeholders from academia and policy were conducted for the functional-structural analysis of the innovation system for urban CEFPS. The results of the document analysis show that the objectives of urban CEFPS align well with policy goals at European, national and local level. However, the regulatory framework contains numerous obstacles for their implementation. The functional-structural analysis shows that several key functions for a successful innovation are not well performed by the current innovation system of urban CEFPS due to e.g. a lack of social and political awareness, bureaucratic obstacles, rare funding opportunities or weak network interactions. On this basis, we recommend various policy instruments to address these problems and to strengthen the overall performance of the innovation system for urban CEFPS, and a regulatory framework that considers urban CEFPS more adequately. The findings suggest that for an effective policy design for urban CEFPS, a policy mix with greater focus on informational (e.g. education, formulation of sustainability criteria) and economic (e.g. creation of purchase incentives or tax depreciation) instruments should be established. However, the proposed policy instruments need to be congruent, consistent and coherent with the existing regulatory framework to enable a regulatory framework supportive for urban CEFPS.