Socio-technical transitions towards sustainability:
Dynamics and policy implications
Professor Frank GeelsSPRU, University of Sussex
12th International Conference on Industrial Technology Innovation (‘Heading towards a sustainable future’)
Taipei, Taiwan, 25-26 August 2011
Structure
1. Introduction
2. Multi-level perspective
3. Policy implications (and dilemmas)
4. Relevance for Taiwan
5. Concluding comments
1. Introduction: Green growth and green economy are hot topics
Green growth/economy entails
“systemic changes across the entire economy” (OECD, 2011: 16)
“fundamental rethinking of our approach to the economy” (UNEP, 2011: 38)
“business as usual would consign us to gradual decline” and that “it is the time to the bold and ambitious” (Europe 2020 Strategy)
(Radical) innovation is crucial.
But green growth reports traditional economics.
1) Neo-Keynesian:a) Increase public and private investments in green technology
b) Environmental regulation
2) Neo-liberal: prices and incentives (Carbon tax, cap-and-trade, subsidies, fiscal policies)
Conceptual problem:
Reports remain outside green growth:
• Inputs (R&D investments)
• Context (framework conditions + incentives)
Poor understanding of radical innovationNo explicit innovation policy, industry policy
Goals
1. Develop better understanding of radical innovation and (socio-technical) transitions
2. More specific policy proposals
2. Multi-level perspective on transitions
Focus on socio-technical systems
Socio- technical systemfor transportation
Culture and sym bolicm eaning (e.g . Freedom , ind ividuality)
Regulations and po licies(e.g. traffi c ru les,parking fees,em ission standards, car tax)
Road in frastructureand traffi c system(e.g. lights, signs)
Vehicle (artefact)
M arkets and user practices(m obility patterns, driver preferences)
I ndustry structure (e.g. car m anufacturers,suppliers)
M aintenance and d istribution netw ork (e.g. repair shops, dealers)
Fuel infrastructure (o il com panies, petro l stations)
Organizational field-analysisS up p ly ch ain : * m a te r ia l su p lie r s * co m p o n e n t su p p lie r s * m a c h in e s u p p lie rs
U sers
P ro duc tion ,indu stry :* f irm s* e n g in ee r s , d e s ig n e r s
R esearch :* u n iv e rs itie s* te c h n ic a l in s ti tu te s* R & D la b o ra to r ie s
P o licy, pub lic au thoritie s :* E u ro p e a n C o m m is s io n , W T O , G AT T* G o v e rn m e n t , M in is tr ie s , P a r lia m e n t* L o c a l a u th o ri tie s a n d e x e c u t iv e b ra n c h e s
S oc ieta l g ro ups:(e .g . G re e n p e a c e ,m e d ia , b ran c ho rg a n is a tio n s)
Multi-level perspective
N ich es(n ove lty )
S ystem /reg im e
L an dscap e
In crea sing s truc tu ra tion o f ac tiv ities in lo ca l p rac tices
Regime: Lock-in, path dependence
Economic: a)vested interestsb)sunk investments (competence, infrastructure) c)scale advantages, low cost
Social: a)cognitive routines make ‘blind’ (beliefs) b)alignment between social groups (‘social capital’) c)user practices, values and life styles
Politics and power:
a) Opposition to change from vested interests
b) Uneven playing field + policy networks
Analytical problem:
How to overcome lock-in?
N ich es(n ove lty )
S ystem /reg im e
L an dscap e
In crea sing s truc tu ra tion o f ac tiv ities in lo ca l p rac tices
•Protection from mainstream market selection•Nurturing of ‘hopeful monstrosities’ (Mokyr)•Carried by entrepreneurs and small social networks
Time
Product performance Invading product
Established product
T (1) T (2)
Niches for radical innovation
Socio-technical landscape
•Exogeneous backdrop of action•Heterogeneous
T im eT im e
L a n d sc a p e d e v e lo p m e n ts p u t p re s su re o n e x is tin g re g im e , w h ic h o p e n s u p , c re a tin g w in d o w s o f o p p o rtu n ity fo r n o v e lt ie s
S o c io - te c h n ic a l re g im e is ‘d y n a m ic a lly s ta b le ’ .O n d iffe re n t d im e n s io n s th e re a re o n g o in g p ro c e ss e s
N e w c o n f ig u ra tio n b re a k s th ro u g h , ta k in ga d v a n ta g e o f ‘w in d o w s o f o p p o rtu n ity ’ . A d ju s tm e n ts o c c u r in so c io - te c h n ic a l re g im e .
E le m e n ts a re g ra d u a lly l in k e d to g e th e r,a n d s ta b ilis e in a d o m in a n t d e s ig n .In te rn a l m o m e n tu m in c re a se s .
S m a ll n e tw o rk s o f a c to rs s u p p o r t n o v e lt ie s o n th e b a s is o f e x p e c ta tio n s a n d fu tu re v is io n s .L e a rn in g p ro c e s se s ta k e p la c e o n m u ltip le d im e n s io n s .D iffe re n t e le m e n ts a re g ra d u a lly l in k e d to g e th e r in a se a m le ss w e b .
N e w s o c io - te c h n ic a lre g im e in f lu e n c e s la n d s c a p e
Tech n o log ica ln ich es
S oc io -tech n ica l’lan d scap e
S oc io -tech n ica lreg im e
Tec hno logy
M arke ts, u se r p re ferences
C u ltu reP o lic y
Scienc eIndustry
E x te rn a l in f lu e n c e s o n n ic h e s(v ia e x p e c ta tio n s a n d n e tw o rk s)
3. Policy implications and dilemmas
Two-pronged strategy:
1)Niche-level: Stimulate radical innovation
2) Pressure on regime: taxes, regulations, incentives
1) Strategic Niche Management (SNM)
• Radical innovations deviate from regime, and are often pioneered by
- engineers/inventors/pioneers- entrepreneurs/start-up firms
• Niches are ‘protected spaces’ that nurture radical innovations
• They help radical innovations bridge the ‘valley of death’
Crossing the valley of death
Niches nurture novelties when they cannot (yet) compete on mainstream markets
Time
Product performance Invading product
Established product
T (1) T (2)
Invention Innovation Time lag (years)
electronic digital computers 1939 1943 4
float glass 1902 1943 41
fluorescent lighting 1901 1938 37
helicopter 1904 1936 32
jet engine 1928 1941 13
magnetic tape-recording 1898 1937 39
radar 1925 1934 9
radio 1900 1918 18
synthetic detergents 1886 1928 42
television 1923 1936 13
transistor 1948 1950 2
zipper 1891 1923 32
Time lag between invention and innovation (Clark et al, 1981)
• Niches are initially unstable and fragile.
• They protection or support from:- Government subsidies- Special users (willing to accept teething problems)
• Niches are carried by concrete R&D projects, demonstration projects
… is carried byprojects in differentlocal practices
Global niche-level(e.g. the emerging field of PV solar cells)
Innovation programs should manage a portfolio of projects:- sharing of knowledge between projects- articulation of best practices, search heuristics
S ha red ru le s ( sea rch heu ris tic s ,expec ta tion s, ab strac t theo ries , te ch n ica l m od els)
p rob lem agendas ,
A g g re g a tio n ,le a rn in g
G loba l lev el(com m un ity,fie ld )
L ocal p ro jects ,c arr ied by localne tw ork s,cha rac terisedby loca l va rie ty
E m erg in gtechno lo g ica ltra jec to ry
F ra m in g , c o o rd in a tin g
Green innovation programs should address interactions
between:
1) Visions, expectations: a) set direction, b) attract attention and funding
2) Learning processes (technology, user practice, policy, infrastructure)
3) Network building: diverse stakeholders. Incumbent firms and new entrants.
A c c e p te d v is io n s a n d e x p e c ta tio n s (o n fu n c tio n a l ity ) fo rm a g en d a o f e m e rg in g f ie ld
R e s o u rc e s + re q u ire m e n ts(f in a n c e , p ro te c t io n ,s p e c if ic a t io n s )
A r te fa c t- a c tiv ity : P ro je c ts in lo c a l p ra c tic e s R & D p ro je c ts , p i lo t p ro je c ts )(
G lo b a l n e tw o rk o f a c to r s (e m e rg in g c o m m u n ity )
O u tco m e s a n d n e w p ro m is e s b y lo c a l a c to rs
C o g n i tiv e , fo rm a l a n d n o rm a tiv e ru le s(k n o w le d g e , re g u la tio n s , b eh a v io u ra l n o rm s)
L o c a l p rac tices
G lo b a l lev e l (em erg in g fie ld )
L e a rn in g ,a r t ic u la tio na g g re g a tio n
E n ro l m o re a c to r s
A d ju s t e x p e c ta t io n s
Dynamic model of niche development
Green growth required multiple types of policy instruments
Top-down (command-and-control)
Market model (bottom up)
Policy networks and processes
Strategy Regulations specify what actors should do
Provide incentives for rational actors
Modulate ongoing processes
Foundation scientific disciplines
Classic political science
Neo-classical economy
Sociology, innovation studies, neo-institutional political science
Governance instruments
Formal rules, regulations and laws
Financial incentives (subsidies, taxes, feed-in-tariffs)
Learning processes, network management through seminars and strategic conferences, experiments, vision building at scenario workshops, public debates
Policy mix differs around world (varieties of capitalism)
• Liberal Market Economies (LME): USA, UK, Canada, Ireland, New Zealand, Australia.
• Coordinated Market Economies (CME): Germany, Denmark, Netherlands.
• State-influenced Market Economies (SME): France, Spain, Italy, Korea, Taiwan, Japan.
Green growth leaders from CME and SME
4. Relevance of green growth for Taiwan?
Taiwanese economic miracle (1960-1990)
But problems since late 1990s
Green growth as next phase in Taiwan’s innovation policy?
1. labour-intensive exports (1960s): textiles
2. capital-intensive sectors (1970s-1980s): ship-building, heavy and chemical industries
3. technology-intensive sectors (1990s): electronics, IT, machinery, biomedical and advanced materials, energy and resources, civil aerospace.
4. Green technologies ???
Current green growth leaders
• Germany, e.g. world-leading solar PV industry
• Denmark, e.g. world-leading wind turbines
• Korea: aggressive green growth plan
• China: Green export-oriented Five Year plan
5. Concluding comments
• Green growth attracts much attention
• Taiwan could strategically position itself regarding other countries
• And implement smart innovation policy
Two deviations from 1960s economic miracle:
1)‘Catch up’ differs from uncertain future
2)Changes in Taiwan’s governance structure
1) Catch-up to technology frontier has a clear direction. Strong state implements vision.
Green growth is open-ended and can follow many paths.
Vision-building should be interactiveNeed portfolio management Innovation management through trial-and-
error (more evolutionary such as SNM)
2) Taiwan changed from authoritarianism to democracy (1980s, 1990s)
Traditional top-down style no longer works
Green economy requires different governance: - More collaboration between state and industry (CME?)- Public support from civil society and citizens
SNM as model for collective learning and vision building
Taiwan is well-placed because of sector-specific consultation bodies, agencies and research institutes (ITRI)
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