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

Analytical framework 67
of doing things is taken-for-granted and embedded in regulative and
normative institutions. An example is the way every house in the
Netherlands is connected to the electricity grid, and provided with electricity
sockets. This is taken-for-granted by both house owners as those involved in
planning and building houses. But, as we will show in the coming chapter,
this was not taken for granted in the early 1900s. Through a process of
normative (societal goal of access to electricity for everyone) and regulative
(withholding concessions if not everyone was to be connected) institution
building every household became connected, and electricity became takenfor-granted.
Important is the realisation that this process of
institutionalisation could be successful because it had acquired legitimacy
within society (convenience and low cost of electricity), within government
(electricity growth as a means for economic growth), and within the
economy (electricity as effective and low-cost power source).
Our focus is especially on the interplay between changes in practices
(innovations) and institutional changes. A main premise is that changes in
practices can only become durable and significant (in the sense of
representing a form of systems change) if they are accompanied by
institutional changes that act as carriers of the new practices. Simply stated:
innovation and institutional change are two sides of the same coin of systems
change. With regard to institutions we use the idea of a hierarchy. This
implies some kind of nested system of sets of practices guided by sets of
institutions, and activities aimed to change those institutions, such as
proposed by Holm (1995). We feel this distinction is valuable, because it
represents two totally different playing fields, comparable to playing chess at
the chessboard on the one hand, and trying to change the rules for chess
within a rule-making body such as the FIDE 2 at the same time. Apart from
discerning between practices guided by institutions and practices intended to
manipulate institutions, we also distinguish institutions that represent ground
rules (or fundamental rules) and specification rules that specify, and built
upon, ground rules, inspired by, among others, Coriat and Weinstein (2002).
Creating a level playing field within European electricity systems in the
wave of liberalisation in the 1990s and 2000s may be considered a ground
rule, and the rules under which mergers may exceed acceptable levels of
market shares in defined areas as a specification rule.
Furthermore, we contend that dominant practices organised in sociotechnical
systems gain stability as a certain ‘institutional logics’ becomes prevalent. In
other words: a particular institutional logics shapes practices, exchange
relationships, and structures. We define institutional logics as a set of
socially constructed assumptions, values, and beliefs (Sine and David, 2003:
2 International Chess Federation.