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

Theoretical perspectives 55
technologies are complex, they require complex networks that create,
acquire, and integrate the diverse knowledge and skills involved in the
innovation. In a similar vein Teece (1992) argues that advanced
technological systems are not created in isolation, but require building
linkages for joint production of knowledge both along the supply chain, in
collaboration with knowledge organisations, and with a range of actors in
order to develop or adapt standards and regulations, for example industrial
standards, safety regulations, etc. Van Rossum (2000) also argues that the
structures of network-based industries such as electricity, transport and
telecommunications, impact innovative processes in these industries. He
points at the pervasiveness of path-dependent network externalities.
Innovation networks in the electricity system are then strongly conditioned
by the standards prescribed by the transmission network and its mode of
provision.
The network perspective is a key element in the approach of environmental
management, as in a system of more sophisticated environmental
management the firm needs to connect with a variety of stakeholders
(Roome, 1998). The focus on networks is also present in research on
industrial ecology and product chains. Networks, such as in industrial
ecology, are deemed crucial to advance towards sustainability as they are
able to provide adaptability (e.g. continuous rethinking of goals, strategies
and implementation), diversity as a learning potential (as the presence of
multiple perspectives increases the likelihood of higher order learning to
occur), and enable the exchange of tacit knowledge. One focus is on the
organisational mode of networks and its relation to the type of innovation
that is likely to be generated. Loose coupling within networks promotes
radical innovation through its diversity and adaptability, but is less
conducive for the exchange of tacit knowledge necessary to realise its
learning potential while tight coupling is more conducive for the exchange of
tacit knowledge but favours incrementalism (Boons and Berends, 2001).
While the previous research focuses mainly on processes internal to the firm
and its networks, in Boons et al. (2000) there is more explicit focus on the
interaction between external and internal factors and processes and how this
has shaped the greening of business practices in the Netherlands. Some of
the ‘new’ organisational routines that are studied are the product-oriented
approach to environmental problems (e.g. eco-design), the preventionoriented
approach (pollution prevention and cleaner production), and the
management-oriented approach (e.g. environmental management systems).
They conclude that although these routines have to some extent become part
of the operational and management activities of companies, this has
generally not resulted in fundamental changes such as radically new
technologies, products, or designs. They tentatively explain this by the fact