Innovation and institutional change: the transition to a sustainable ...

20 Chapter 2
increasing scale and realising higher temperature and pressure (Hirsh, 1999:
56; Verbong, 2000: 226; Hofman and Marquart, 2001: 43).
What is less clear in the work of Nelson, Winter and Dosi is how paradigms
emerge or how shifts from one paradigm to another occur, and the nature
and effects of embeddedness of these paradigms outside the realms of firms
and engineers. The role of external changes will play an important role as is
argued by Saviotti (1996: 45-46): “However, important environmental
changes requiring, for example, substantial modifications of the
technologies used by a firm, are likely to induce changes in routines, knowhow
and competences which are then transmitted to subsequent
generations”. What remains unclear, however, is to which external changes
routines and know-how of a firm remain relatively invariant and to which
not. A second more fundamental criticism is that these scholars model the
selection environment as a (set of) factor(s) independent to the agents that
generate variation. Especially more sociological interpretations of
technological changes point at continuous interaction between the selection
environment and variation and argue that the way these are shaped and take
on certain more structural forms is essential. Van den Belt and Rip (1987), in
their analysis of the synthetic dye industry, argue that the “influence on the
selection environment often results in a nexus, that is a social institution that
carries and shapes the interaction between trajectory and selection
environment”. This implies a shift from a focus on evolution to co-evolution:
understanding the way particular technological paths are embedded in, and
co-evolve with, broader institutional structures.
Evolution of large technical systems
This approach is especially relevant for the analysis of the electrity system as
a system of technologies in which infrastructure plays a central role. Of
crucial concern is the work of Thomas Hughes, who interpreted the
electricity system as a seamless web of interwoven elements of both a
technical and non-technical nature (Hughes, 1983; 1987). His analysis thus
focuses not on individual technologies but on the way the development of a
variety of elements tends to reinforce the system as a whole, involving
clusters of technologies and knowledge generation, and creating some
specific dynamics as general understanding is created as to how to further
optimise and expand the system. This takes the form of engineering guiding
principles such as how increasing scale of steam turbines is accompanied by
higher efficiency, and by fine-tuning of the system with public policy, such
as through the establishment of monopoly as the natural form of