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

78 Chapter 4
Hughes’ basic model of change of large technical systems focuses on two
main dimensions. The first involves the way the system interacts with
external or contextual changes and the second the way the system solves
internal problems that hampers system expansion. These reverse salients, as
Hughes labelled them, can be solved if actors collectively perceive a specific
problem as the major bottleneck and if their activities are mobilised in
overcoming this reverse salient. Actors with a leading role within the system,
such as a system builder as Edison, may be able to translate reverse salients
into critical problems that become shared by other actors, while boundary
spanners such as Insull play an important part in the diffusion of these ideas.
Apart from the more technical and legal principles listed above it is thus
possible to add another, more cognitive, principle of sharing similar ideas
about the nature of the problems within the system and the way they should
be solved.
Verbong et al. (2000) account of the evolution of the Dutch electricity
system shows how Dutch municipalities and provinces strengthened their
grip on electricity supply by opening public facilities and refusing
concessions to private companies. This process ran parallel with increasing
economies of scale made possible as investments in steam turbine outran
steam engines and as alternating current was increasingly adopted for larger
distribution networks. Electricity supply thus increasingly took the form of a
natural monopoly and was dominated by initially municipal and later
provincial stakeholders.
The way in which electricity consumption developed and was cultivated is
another crucial part of the transition towards an electricity system.
Households had to become used to electric lamps, a rather different practice
than using oil or gas lamps, although generally quickly considered more
convenient due to the invention of the incandescent light bulb by Edison in
1879. Electric trams replaced horse trams, and manufacturing companies
shifted from steam and water engines to electric motors as their source for
mechanical drive. In an analysis of the shift from steam to electric power in
US manufacturing Devine (1983) reports how initially electric motors were
used to replace steam engines without changes in the organisation of
production. At the end of the 19th century steam engines were the main
source for mechanically powering machines. The first use of electric motors
in manufacturing plants was in 1884, in 1900 the share of electric motors as
a source for mechanical drive was about 3%, in 1910 around 20%, in 1920
over 50% with electric motors replacing steam engines as the main source
for mechanical drive, and in 1929 78% of total capacity for mechanical drive
was based on electric motors (Devine, 1983: 349). At first instance
substitution took only place in those cases where replacing steam engines by
electric motors for driving machinery reduced direct costs. As companies