Policy innovation has become a critical policy area in public policy-making. In the context of globalisation, policy innovation should take into account socioeconomic issues to enable national governments to compete in the international
arena. Smaller countries with less capital may be in a predicament. Policymakers should strike a balance between local interests and peculiarities and international demands, which require new policy-making capacities and policy innovation. The question arises whether innovation in one country is necessarily innovation in another. It is also uncertain whether an innovation policy necessarily leads to innovation activities. For instance, in the field of energy policy and
energy policy innovation, tensions arise between social and financial capital. In this article, it is argued that the leaders of countries – especially smaller and developing countries – face continuous challenges in their attempts to promote renewable energy policies.