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Green Economy and Eco-Innovation

How green economy and eco-innovation are related

Although the concepts of green economy, sustainable development and eco-innovation co-exist, their content is quite general and the interpretation differs between different stakeholders of EU countries, between EU member states, but even more across different regions of the world. Moreover, they are sometimes seen as pre-specified concepts that came up in developed economies and have to be transferred to developed and transition economies. The alternative would be to develop concepts which may differ from region to region due to variances regarding the meaning and importance of social and economic aspects, or regarding the view if high tech solutions are appropriate to solve the problems. Following the latter approach, the development of operational concepts in different countries requires the exchange of visions, views, best practices and research programs. Operational concepts of eco-innovation, green economy and sustainable development should be based on joint global discussions, instead of following a one-way road of communication and diffusion from North to South. Synergies and trade-offs should be identified, and conflicting interests should be managed.

Within the triangle of sustainable development, green economy and eco-innovation; eco-innovation can be understood as an enabler for a green economy to the same extent that the green economy can be understood as an enabler of sustainable development. Technological trajectories, capabilities to eco-innovate, infrastructures and needs however differ around the globe and have to be taken into account. While certain global markets for eco-innovation are very attractive for major economies, such as e-mobility and renewable energy, and countries compete to be the lead market for a certain eco-innovation (Rennings, 2014), it is relevant to mention that quite often eco-innovation diffusion (north-south, south-south) encounter weaker innovation systems, institutional barriers, non-regulated markets, etc.

In a systemic perspective the process can be interpreted as a global paradigm shift to sustainability inducing a co-evolution of technology, markets, and institutions. More and more the innovation systems of single countries from different parts of the world are interacting, what has not really been investigated up to now. While there is no universal scientific approach available that is ready to be applied to the project, we prefer a stepwise, evolutionary and systemic transition approach since it avoids shortcomings of alternative concepts. Kemp and Rotmans (2005) defined transitions as transformational processes in which society or a complex sub-system of society, changes in a fundamental way, over an extended period of time; typically more than one generation (i.e. 25 years). Transitions occur when a system moves from one stable state, or equilibrium, to another, and consist of a combination of system improvements and system innovations. Transitions are particularly interesting to sustainability scientists and practitioners because they offer the possibility of large scale change at the scale required to meet our global challenges.

The key question though, is whether transitions can be engineered. The short answer appears to be that transitions are difficult to control, but they can be influenced and even managed. Kemp and Rotmans (2005) claim that transition management is based a two-pronged strategy that requires incremental system improvement (under the existing equilibrium or ‘rules of the game’) and radical system innovation (towards the new equilibrium and new ‘rules of the game’). Figure 2 below shows the different typologies of incremental and radical technological change.

The combination of these two strategies is important. System innovation and renewal is complex, risky and normally takes a long time (at least a generation or 25 years). Incremental system improvements under the old ‘rules of the game’ are therefore necessary to maintain and improve the functionality of the system during the time that it takes for new system innovations to take hold and set the trajectory to the new equilibrium. A dual strategy of incrementally improving the system under the old ‘rules of the game’, whilst simultaneously working on radical system innovations that fundamentally transform the ‘rules of the game’, is therefore needed for successful system transitions.

Incremental eco-innovations that save money are looked upon with great favour by users and policy makers alike because they constitute a win-win option by combining advantages to users with advantages to society but there are two problems with such innovations: the environmental wins are often low because of rebound effects and the incremental nature of many of such innovations. Radical eco-innovations may be a more promising solution, but radical technologies have long developments times and take long to become attractive to users. Innovation thus does not offer an easy way out but involves difficult policy choices. There always will be trade-offs to be managed.

For this discussion, the relevant global actors on these topics will be mobilized in the inno4sd-network with a focus on eco-innovations. The exchange of views and experiences can improve the mutual understanding and accelerate appropriate measures to green development in the respective countries.

References

Kemp, R., J. Rotmans (2005): Managing the transition to sustainable mobility. In: Elzen., B., F.W. Geels, K. Green, System Innovation and the Transition to Sustainability, Cheltenham.

Rennings, K. (2014): Global Diffusion of Environmental Innovations, Environmental Innovation and Societal Transition (EIST).

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EU flagThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No. 641974.