This article explores whether and how innovation policies promote transitions to more sustainable configurations in socio-technical systems. Empirically it departs from an analysis of the bioeconomy policy strategies and instruments in four Nordic countries. The analysis highlights that while a transformative approach is present at the policy strategy level in the Nordic countries, the bioeconomy policy instruments implemented are significantly less transformative. The article argues that a bioeconomy transition that contributes to sustainable development will require a redirection of policies towards transformative failures (directionality, policy coordination, demand articulation, and reflexivity). In this regard, it is important that policymakers experiment with and explore ways of balancing between traditional market and innovation system approaches and new policy approaches for transformative change.