Editorial: Governing innovation systems: intermediaries, accountability, and the pursuit of sustainable change

During an era marked by convoluted societal and environmental issues, innovation must be tackled as a systemic, multidimensional transformation that transcends organizational and sectoral boundaries. At the root of such development lies the intertwinement of culture, individual behavior, institutional governance and financial systems. As a growing literature argues, catalyzing transformative innovation involves not only technological advancement but also inclusive governance arrangements, visionary leadership and supportive ecosystems. Within this context, transformational innovation is primarily driven by a constellation of interrelated forces, citizen action, organizational conduct, governance institutions, financial systems, cultural norms and leadership. These bodies of knowledge collectively illustrate that sustainable, inclusive and effective innovation requires integrative thinking and systemic action across public, private and hybrid sectors.

The role of governance in public sector innovation has been subject to increasing scrutiny. A recent systematic review investigating coproduction, public sector innovation and governance finds a significant gap between theoretical acknowledgment and empirical adherence to citizen involvement in innovation governance. While many studies are concerned with governance in interorganizational partnerships, only 20% address coproduction explicitly, thus reflecting an overriding emphasis on collaborative governance institutions that do not necessarily encompass direct citizen participation (Baretta et al., 2025). The presence of such polysemy within the governance literature reveals the need for a reconceptualization of innovation as a participatory, co-owned process, especially within public systems where responsiveness and legitimacy are crucial.

To complement this, Almazrouei et al. (2025) examine the effects of job design and emotional well-being on public sector innovation. Grounded in the broaden-and-build theory and relational job design, their study finds that job contact, i.e. face-to-face contact with beneficiaries, positively affects employees’ innovative behavior. This is mediated by job happiness and further increased by prosocial motivation. These findings point to the promise of behavioral drivers and positive workplace culture in releasing innovation potential from within, especially in service environments.

In the financial realm, innovation is increasingly being linked with sustainability and technological advancement. Farooq et al. (2025) demonstrate that financial development in the Gulf Cooperation Council countries has a substantial effect on green technological innovation (GTI). A developed financial sector guarantees access to capital and technology, hence encouraging industrial transformation. Yet natural resource dependence is inversely related to GTI, suggesting the paradox that resource-rich economies may underinvest in sustainable innovation. Similarly, Baig et al. (2025) show how FinTech innovation enhances firm performance, with mediation from knowledge assets such as research and development (R&D) spending and intellectual capital. This relationship suggests the strategic shift from traditional finance toward knowledge-based value creation, with a hint of the role of intangible assets in competitiveness during the digital age.

The triple helix university–industry–government innovation model is yet another model attracting renewed interest. Mêgnigbêto (2025) models this system as a cooperative game and obtains conditions under which systemic synergy emerges. The analysis corroborates that while solution concepts like the Shapley value and nucleolus always exist, the “core” of the system, stable cooperation, is contingent on tangible outcomes from bilateral and trilateral partnerships. Convexity of the innovation system depends on everyone contributing actively, reiterating that collaboration alone is not sufficient without collective productivity.

To be adaptable to future challenges, organizations must also implement strategic changes to their culture and structure. Krajcsák and Bakacsi (2025) propose a three-level model, micro, meso and macro levels, to guide organizations toward “future potentiality.” Some of the key values that serve as guiding lights to future-fit institutions include equity in the leadership–employee relationship, moderation in organizational processes and responsibility and sustainability at the macro level. These outcomes strongly support Shahbaz et al. (2025), who determine that green intellectual capital among Pakistani small and medium enterprises enhances environmental performance, especially when combined with green creativity. Collectively, these studies accentuate the central role of organizational culture and creativity in steering innovation toward sustainability.

Leadership, especially executive leadership, is instrumental in driving innovation trajectories. Ullah et al. (2025) present evidence from China that CEOs with science and engineering backgrounds have a positive impact on firm innovation. Further, this connection is strongly complemented by both compensation systems and the institutional environment, such as intellectual property rights protection. These observations align with the view that matching executive competencies with organizational innovation objectives is paramount for sustainable development.

Frugal innovation, a paradigm that underscores cost-effectiveness and inclusiveness, has also emerged as a key theme. Quintino Sant’Ana et al. (2025) propose a research agenda to map the future direction of the field, outlining six theme areas, from frugal consumer behavior to value creation concerns. Their review illustrates not only the maturity of the frugal innovation literature but also the need to contextualize it in different socio-economic settings.

Finally, individual and cultural attributes also influence innovation intent, particularly among young individuals. Maheshwari (2025), applying the theory of planned behavior, investigates the development of Vietnamese students’ entrepreneurial intentions. The findings indicate that risk propensity has a direct influence on intentions, and culture influences subjective norms, which impact attitudes and perceived behavioral control. These mediating influences suggest that entrepreneurship and innovation education must be culturally based and psychologically attuned.

Building from the previous transformative innovation perspective, we delve deeper into the roles of innovation intermediaries and their function in triggering systemic change. In latecomer contexts, policy-linked transition intermediaries have critical roles to play in coordinating innovation systems. Their function extends beyond typical facilitation to become a central component of strategic developments. As highlighted by Attarpour et al. (2024), such intermediaries align innovation agendas with government and private sector markets via tax credit and science and technological parks’ support mechanisms, triggering various stakeholder engagement. Through empowering leading academic brains, fostering innovation clusters and enabling international scientific collaboration, such intermediaries contribute significantly to innovation-based transitions.

Schepis (2021) examines how intermediaries increase relational proximity for startup internationalization. By facilitating trust establishment and facilitating linkages, such actors enhance the ability of startups to enter emerging markets. Their relationship-building enables them to reduce the complexity of foreign business environments and to ensure affluent, multifaceted partnerships. In situations marked by uncertainty and ambiguity, where actors, interests and platforms are ambiguous, intermediaries are even more instrumental. Agogué et al. (2017) depict how intermediaries act in states of the unknown, dealing with managerial and network-related challenges through adaptive and contingent action.

Sociotechnical transitions to sustainability must also have robust systems of governance, and intermediaries are positioned strategically to see that innovation meets environmental imperatives. In the network of Brazil’s craft brewery, Gruba et al. (2022) expose the manner in which circular economy activity, emerging amidst the COVID-19 pandemic, was pivotal in the formulation of resource-efficient innovation. Entrepreneurial actors interacted with intermediary organizations to coevolve a sustainable system with waste-minimization and regenerative methods. Similarly, Lobo et al. (2025) discuss the intermediaries’ central role in technological innovation systems and confirms that intermediaries drive sociotechnical transitions by bridging people, networks and organizations. Intermediaries play a central role in sustainability management through a systemic mechanism that connects environmental, social and governance values to entrepreneurial innovation and strategy.

Organizational absorptive capacity overlaps with intermediary support as well. As has been shown by Marrucci et al. (2022), firms with greater absorptive capacity are more probable to embrace circular economy measures and implement environmental management systems. Intermediaries indirectly contribute to such capability by overseeing knowledge flows and encouraging learning networks.

The COVID-19 pandemic posed unprecedented challenges to transition processes. Busch and Hansen (2021) found that community energy projects in Europe were disrupted due to diminished trust-building and networking. Intermediaries supported by the public fared better in maintaining operations, emphasizing the role of institutional support. The findings highlight the value of redundancy and resilience in intermediary networks. In addition, urban cooperation is also a vital platform for intermediation. Madrid-based Soberón et al. (2023) capture how transition intermediaries help make municipalities learn how to cooperate across sectors and actors. The job of intermediaries is not to replace but to enable, rendering municipalities as middle facilitators. Universities and NGOs also demonstrate intermediary roles at the grassroots level. Wolf et al. (2021) construct a conceptual model demonstrating how such actors bridge niche innovations to scale and integrate into broader regimes. Their intermediation ensures bottom-up sustainability efforts reach systemic significance.

Ideologically, systemic intermediation by Kanda et al. (2020) aids in the elaboration of multiple levels at which the intermediaries operate, starting with connecting the actors within the networks to connecting across institutions. Place-based intermediation, researched by Loeber and Kok (2024), centers around the importance of regional identity, trust and local innovation potential within governance styles. In the same direction, Kivimaa et al. (2019) propose a typology that defines systemic, niche, regime-based, process and user intermediaries. The broad categorization emphasizes the dynamic character of intermediary roles and the necessity of these in orchestrating sustainability transitions. To create innovative governance, there must be an entire ecology of intermediary actors constructed, where alignment, resilience and transformative capacity are present at different levels of the system.

As businesses strive to integrate sustainability and innovation into their core strategies, traditional accounting practices find themselves under mounting pressure to further evolve. Accounting, once considered a backward-looking scorekeeping process, is being redefined as a forward-looking enabler of strategic decision-making. This shift has given birth to new forms of accounting, such as green accounting, strategic management accounting (SMA) and innovation accounting, that do not only track financial performance but also legitimize innovation, offer support for sustainability initiatives and align with competitive strategies. Accounting innovation is not a peripheral or technical change – it is a central to transforming how organizations manage, justify and sustain innovation. By integrating green, strategic and innovation accounting within an integrated performance system, organizations are better able to cope with the complexity of the contemporary innovation-driven, sustainability-conscious setting. Together, these new frameworks are components of the architecture of sustainable performance systems, where accountability is not just financial but also environmental, social and strategic.

Entrepreneurs, in particular, are central to reconfiguring accounting practices to demonstrate the value of innovations that challenge conventional business models. Barman et al. (2021) highlight how social enterprises have developed new frameworks such as social return on investment to legitimate impact. This is achieved through pre-empting stakeholder expectations, developing the infrastructure necessary to value and iteratively developing both the metrics and the innovation accounts. Accounting, therefore, is not only a measurement tool but also a storytelling and advocacy tool.

At the macroeconomic level, accounting systems must also capture complex interdependencies between trade, technological progress and environmental outcomes. Ali et al. (2021) find that while trade-induced innovation can reduce CO₂ emissions in Asia, the scale effects of economic growth cancel out these benefits unless combined with strict environmental regulations and green technologies. This interaction reiterates the need for green accounting systems that capture both positive and negative externalities, thereby policymaking that balances economic development with environmental sustainability.

Within the organizational sphere, management accounting is being transformed by the imperatives of responsiveness and strategic alignment. Oyewo (2021) reveals that the spread and scope of SMA usage are significantly influenced by the level of alignment or compatibility of these tools with a firm’s competitive strategies. In highly competitive or innovation-intensive sectors, SMA becomes the key competency to enable change adaptability and differentiation.

The emergence of digital tools has created even broader opportunities for what can be done in accounting. Imjai et al. (2023) demonstrate that digital competency plays an important role in enhancing management accounting competency among Thai micropreneurs, which contributes to an increase in competitive performance. Similarly, Xu et al. (2024) demonstrate that digitalization of financial accounting management has a positive correlation with firm performance, particularly in China’s rapidly changing digital economy. These findings point to the growing importance of digital innovation as both a cause and a result of accounting evolution.

Environmental management accounting (EMA) is another pillar in sustainable performance system design. Ariani (2023) illustrates that incorporating EMA into strategic planning enables companies to minimize waste and environmental costs and enhance innovation opportunities. Green accounting and innovation are not contradictory but complementary; when companies adopt greener strategies, they often discover opportunities for product and process innovation with beneficial effects on both environmental and economic performance. In addition, accounting information quality (AIQ) can be a significant driver of innovation outcomes. Zuo and Lin (2022) confirm that firms with higher AIQ absorb more value from government R&D subsidies and exhibit stronger innovation performance. This suggests that besides measuring innovation, accounting can actually drive it by reducing information asymmetries and improving investment efficiency.

Finally, recent studies challenge conventional wisdom on how managerial incentives promote innovation. Cardinaels et al. (2024) show that the inclusion of cost considerations in performance metrics, rather than shielding managers from them, can actually improve the adoption of innovative accounting systems. This result reframes the role of performance measurement as an arena for behavioral design rather than outcome measurement.

Transformative innovation demands a multidimensional approach that transcends traditional policy, organizational and practice silos. As the interactive dynamics among citizen engagement, institutional response, leadership and financial infrastructure shape the innovation landscape, it is clear that no one actor or sector can shape sustainable change independently. The typology offered by Lobo et al. (2025) highlights the intermediaries’ central role in facilitating coordination, experimentation and learning between levels and domains. These actors are connective tissue in innovation ecosystems, making coherence and adaptability necessary for systemic transitions.

Equally critical is the establishment of accounting practices to support the ambitions of sustainability-oriented innovation. Rather than accounting as a compliance- or backward-looking activity, new paradigms see it as a proactive, integrated tool for strategic choice and stakeholder engagement. Green, strategic and innovation accounting are not isolated tools but an integrated system that embeds sustainability into the decision-making fabric. These methods allow organizations to measure what matters, connecting financial performance with social and environmental performance.

System-changing innovation is less about generating new policies and technologies, but rather about reorienting the underlying logics, incentives and values guiding action. This requires collaborative governance, robust intermediary infrastructures and adaptive performance systems that are infused with a more expansive concept of value. As innovation systems increasingly become more integrated and interdependent, it will be imperative to develop such integrative capacities to achieve equitable, long-lasting and meaningful transformation.