Innovation and institutional change: the transition to a sustainable ...
Innovation and institutional change: the transition to a sustainable ... 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
56 Chapter 2 that the introduction of these new organisational routines has not been accompanied by shifts in power (changing and new coalitions) or changes in values. Dieleman (1999) also focuses on change processes in companies, and specifically addresses the question why companies seem to be captured in a trajectory of cleaning up pollution and cannot easily make the change to prevention and process integrated solutions. He explains this by elaborating how a certain way of doing things has become institutionalised in the past 30 years in problem approaches, laws and regulations, education and technology, standard solutions and so forth (Dieleman, 1999: 200). His focus is on cleaner production projects as a way to undermine this existing ‘arena’. “Because an arena has the character of a ‘seamless web’ with numerous interwoven alignments and connections, change that is fundamental in several ways demands changes of all actors involved” (Dieleman, 1999: 200, my translation). The framework he develops for analysing and explaining change processes in companies is based on insights from technology studies, institutional economics and evolutionary theorizing. Firms have developed certain blindness, a way of viewing problems and solutions in one particular way, which hampers prevention of pollution as firms tend not to see the opportunities available. Also, when regarding alternative solutions, these are difficult to implement due to path dependencies, as existing functional and structural connections (e.g. with the regulatory setting and knowledge infrastructure) are not geared to this type of change. He concludes that change processes rely on confrontation (unpacking blindness, make it visible, and confronting actors with other problem approaches and problem solving), reflection (analysing linkages between various levels that create path dependencies, such as the relationship between a firms’ accumulated competencies and the knowledge infrastructure), and experimenting and learning (through trial and error, opportunities and their frontiers can be assessed in a process of learning by doing, using and interacting). A partial explanation lies in the composition of the networks of the cleaner production projects which were not designed from the perspective of stimulating confrontation, and in firms’ wider context (e.g. regulatory environment; intermediaries; knowledge infrastructure) which was not geared towards stimulating prevention, had it roots mainly in the trajectory of cleaning up pollution (e.g. pollution control instead of pollution prevention). The observation of Boons et al. (2000) that the more top-down oriented approach of stimulating environmental management dominated the more bottom-up oriented pollution prevention approach is also very relevant. The environmental management approach is much more oriented towards providing environment relevant information and much less on redesigning and improving production processes and products. In that sense it fitted better to the regulation approach, policy style, competencies and routines of
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56 Chapter 2<br />
that <strong>the</strong> introduction of <strong>the</strong>se new organisational routines has not been<br />
accompanied by shifts in power (changing <strong>and</strong> new coalitions) or <strong>change</strong>s in<br />
values. Dieleman (1999) also focuses on <strong>change</strong> processes in companies, <strong>and</strong><br />
specifically addresses <strong>the</strong> question why companies seem <strong>to</strong> be captured in a<br />
trajec<strong>to</strong>ry of cleaning up pollution <strong>and</strong> cannot easily make <strong>the</strong> <strong>change</strong> <strong>to</strong><br />
prevention <strong>and</strong> process integrated solutions. He explains this by elaborating<br />
how a certain way of doing things has become <strong>institutional</strong>ised in <strong>the</strong> past 30<br />
years in problem approaches, laws <strong>and</strong> regulations, education <strong>and</strong><br />
technology, st<strong>and</strong>ard solutions <strong>and</strong> so forth (Dieleman, 1999: 200). His focus<br />
is on cleaner production projects as a way <strong>to</strong> undermine this existing ‘arena’.<br />
“Because an arena has <strong>the</strong> character of a ‘seamless web’ with numerous<br />
interwoven alignments <strong>and</strong> connections, <strong>change</strong> that is fundamental in<br />
several ways dem<strong>and</strong>s <strong>change</strong>s of all ac<strong>to</strong>rs involved” (Dieleman, 1999: 200,<br />
my translation). The framework he develops for analysing <strong>and</strong> explaining<br />
<strong>change</strong> processes in companies is based on insights from technology studies,<br />
<strong>institutional</strong> economics <strong>and</strong> evolutionary <strong>the</strong>orizing. Firms have developed<br />
certain blindness, a way of viewing problems <strong>and</strong> solutions in one particular<br />
way, which hampers prevention of pollution as firms tend not <strong>to</strong> see <strong>the</strong><br />
opportunities available. Also, when regarding alternative solutions, <strong>the</strong>se are<br />
difficult <strong>to</strong> implement due <strong>to</strong> path dependencies, as existing functional <strong>and</strong><br />
structural connections (e.g. with <strong>the</strong> regula<strong>to</strong>ry setting <strong>and</strong> knowledge<br />
infrastructure) are not geared <strong>to</strong> this type of <strong>change</strong>. He concludes that<br />
<strong>change</strong> processes rely on confrontation (unpacking blindness, make it<br />
visible, <strong>and</strong> confronting ac<strong>to</strong>rs with o<strong>the</strong>r problem approaches <strong>and</strong> problem<br />
solving), reflection (analysing linkages between various levels that create<br />
path dependencies, such as <strong>the</strong> relationship between a firms’ accumulated<br />
competencies <strong>and</strong> <strong>the</strong> knowledge infrastructure), <strong>and</strong> experimenting <strong>and</strong><br />
learning (through trial <strong>and</strong> error, opportunities <strong>and</strong> <strong>the</strong>ir frontiers can be<br />
assessed in a process of learning by doing, using <strong>and</strong> interacting). A partial<br />
explanation lies in <strong>the</strong> composition of <strong>the</strong> networks of <strong>the</strong> cleaner production<br />
projects which were not designed from <strong>the</strong> perspective of stimulating<br />
confrontation, <strong>and</strong> in firms’ wider context (e.g. regula<strong>to</strong>ry environment;<br />
intermediaries; knowledge infrastructure) which was not geared <strong>to</strong>wards<br />
stimulating prevention, had it roots mainly in <strong>the</strong> trajec<strong>to</strong>ry of cleaning up<br />
pollution (e.g. pollution control instead of pollution prevention). The<br />
observation of Boons et al. (2000) that <strong>the</strong> more <strong>to</strong>p-down oriented approach<br />
of stimulating environmental management dominated <strong>the</strong> more bot<strong>to</strong>m-up<br />
oriented pollution prevention approach is also very relevant. The<br />
environmental management approach is much more oriented <strong>to</strong>wards<br />
providing environment relevant information <strong>and</strong> much less on redesigning<br />
<strong>and</strong> improving production processes <strong>and</strong> products. In that sense it fitted<br />
better <strong>to</strong> <strong>the</strong> regulation approach, policy style, competencies <strong>and</strong> routines of