Article

The institutional evolution process of the global solar industry: The role of public and private actors in creating institutional shifts

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Abstract

This study takes an institutional perspective on industry creation, which argues that an industry’s maturation relies on a process of building legitimacy and establishing rules for competition. It addresses the institutional evolution process that an industry experiences, in which existing rules for competition are disrupted and replaced by new regulatory frameworks, technological standards, and business models. These interruptions are referred to as institutional shifts. The study seeks to understand the role of specific actors in creating institutional shifts that drive an industry’s institutional evolution process. Based on a study of the global solar industry over the period of 1982 to 2012, the findings suggest that the industry’s institutional evolution was driven by an interplay of different public and private actors that influenced one another over time and across national borders. To create institutional shifts, companies employed a mechanism based on knowledge diffusion, while governments used a stimuli-based mechanism instead.

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... While this outcome would have not been possible without Henri and Nina's early dedication to the process, your comments still serve as a source of professional reinforcement to me, and I am now considering developing them into framed posters or oversized laminated out-prints that I can return to in 1. Introduction Solar technology has emerged as a significant option in energy provision in a rather short time. Prices for solar photovoltaic (PV) systems have decreased rapidly from 2005 to 2015 and the industry has turned into a major business with a global outlook (Bohnsack, Pinkse, & Waelpoel, 2015;Solar Power Europe, 2015). Solar energy is also often considered a spreadhead technology in the transition of the energy domain towards an increased use of new renewable energy sources. ...
... The country is also characterized as one of the harshest contexts for the technology globally (Haukkala, 2015;Hakkarainen et al. 2015;WWF Finland, 2013). These observations are worthwhile considering that governments around the globe have invested in developing supportive policies for boosting local industries and markets, such as Germany as the early market leader (Bohnsack, Pinkse, & Waelpoel, 2015; International Energy Agency 2018a) and countries with similar conditions like the U.K., Canada, Sweden and Denmark as some examples Walker, Schlosser, & Deephouse, 2014). Finland also has similar over the year insolation rates to Germany, which also gives reason to wonder how the mobilization of initial actors has come to stagnate over multiple decades. ...
... Hence, while solar is also produced in large power plants, it has spread widely as a decentralized technology. In the latter case the adoption of feed-in-tariff policies support the technology by giving renewable energy sources priority in the electric grid and allowing the small-scale producer to sell back excess electricity to the electric grid (Bohnsack et al., 2015). Solar energy has a fairly long global history, with initial interest having increased for the first time during the two oil crises, that triggered a global search for alternative energy sources (Bohnsack et al., 2015). ...
... What makes sustainable innovation distinct is its political nature, that is, the institutional context in which firms seek to innovate has a strong influence on the outcome of the innovation process (Bohnsack et al. 2016;Levy 1997b;Pacheco et al. 2010;Stenzel and Frenzel 2008). Firms that invest in sustainable technologies strongly depend on the government (Rennings 2000); the government can thus make or break the emergence of the cleantech industry. ...
... Corporate political activity to garner government support, to create new market rules, or to set a new standard for a sustainable technology is an important part of sustainable innovation (Bohnsack et al. 2016;Sarasini 2013;Smink et al. 2015). Political action is particularly important in a technology's early stages of development, when it still needs to gain legitimacy among various stakeholders, including the government, customers, suppliers and the like (Aldrich and Fiol 1994;Fisher et al. 2017;Markard et al. 2016). ...
... They also have many different tactics at their disposal (Hillman and Hitt 1999). Political action can take the form of directly trying to influence the government through lobbying, but it can also be done in a more indirect manner, for instance by establishing new standards that aim to become an industry norm (Bohnsack et al. 2016). While many tactics and approaches related to corporate political action have been discussed in the literature (Hillman and Hitt 1999), this chapter specifically develops a view on political strategizing that emphasizes the context in which it happens, that is, one where institutions can both enable and constrain firm behaviour (Ingram and Clay 2000). ...
Chapter
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This chapter focuses on the role of firms’ process of strategizing in relation to the political dimension of sustainable innovation. Basing itself in management literature that takes a strategic perspective to corporate sustainability, it analyses firms’ capabilities in lobbying governments to either push or impede the development and commercialization of sustainable technologies. It addresses the question how firms use corporate political activity to manage the complex institutional landscape around sustainable technologies. Conceptually, the chapter builds on a dual view on government institutions that emphasizes the enabling and constraining influence of institutions on firm behaviour. Government institutions can enable social change by providing support for sustainable technologies, but at the same time also constrain change when existing laws that form barriers are not adjusted or removed. Accordingly, the chapter analyses how firms strategically leverage government support as well as manage to influence the policymaking process through corporate political action.
... It is argued here that global solar PV market is not isolated from what happens in the rest of the society. As noted by Bohnsack et al. (2015) different actors, at different times, created the momentum for the industry's evolution due to institutional shifts. There have been needs for new regulatory frameworks, technological standards, and business models. ...
... New ideas do not diffuse easily but require changes in both supply and demand. For instance, the demand and supply has till date been largely influenced by changes in price and availability of other forms of energy, such as coal, gas and oil (Bohnsack et al., 2015;Jones & Bouamane, 2012). To illustrate, exhaustion of Britain's coal reserves in the 1860s, periodic oil and coal shortages during and after World War II, the OPEC oil embargo in 1973, and warnings about the risks of nuclear energy have all encouraged scientists, inventors and policymakers to seek alternative sources of energy (Johnson, 2015). ...
... Here, it is noted that the ecosystems vary from one country to another. Further, solar PV market has been influenced by development in other industries, particularly other natural resources (Bohnsack et al., 2015). Therefore, a closer look is taken at multiple actors in the following. ...
Chapter
Full-text available
Purpose: This chapter seeks to place Paris agreement on anthropogenic greenhouse gases (COP21) in a wider picture on how the global solar photovoltaic (PV) market has been created and shaped over decades. The chapter discusses the role of solar PV actors, as well as other actors in market shaping process. The aim is to show how the COP21 can be interpreted in a longer historical perspective. Approach: The book chapter builds on expert interviews conducted after the COP21, as well as secondary data on historical studies on evolution of solar energy markets in various countries. Findings: Although scientists and entrepreneurs have been important in creating and shaping the global solar PV market, it is noted that also other actors have had influence on the market development. Particularly, politicians are seen as having crucial role through legislation and funding. Unfortunate to solar PV market, support has fluctuated over time. The COP21 provides a clear pathway for positive support, and it is expected to bind governments for pro-solar politics even during low prices of fossil fuels and economic downturn. Practical implications: The chapter provides an overview of what has happened in the history of global solar PV market. It gives reasoning why the COP21 is important in securing support to solar PV market. Thus, it can provide reasoning why the COP21 can make difference. Originality/value: This is the first academic study that portrays the COP21 against historical evolution of global solar PV market.
... Notable exceptions do exist, which contribute important insights into the role of actors in bringing about or resisting change. However, these studies often focus on a limited group of actors, such as incumbent actors (Geels, 2014) or institutional entrepreneurs (van Doren et al., 2020), or they focus on specific institutional fields, such as the urban water sector (Fuenfschilling and Truffer, 2016) or the solar industry (Bohnsack et al., 2016). Within transition studies there is a call for more engagement with institutional theories in general, and institutional work specifically, to further unravel the influence of actors in organizing institutional change and stability in the complex multi-actor settings surrounding sustainability transitions (Fuenfschilling and Truffer, 2014;Köhler et al., 2019). ...
... Existing research focuses mainly on institutional creation work as performed by institutional entrepreneurs (Lawrence et al., 2013). This is also the case for the studies that do examine sustainability transitions in combination with institutional work (see Bohnsack et al., 2016;van Doren et al., 2020). These studies contribute important insights into how institutional entrepreneurs are important in pursuing institutional change and the strategies they apply in doing so, thereby contributing empirical and theoretical insights to institutional work literature (Bohnsack et al., 2016;Hardy and Maguire, 2008;van Doren et al., 2020). ...
... This is also the case for the studies that do examine sustainability transitions in combination with institutional work (see Bohnsack et al., 2016;van Doren et al., 2020). These studies contribute important insights into how institutional entrepreneurs are important in pursuing institutional change and the strategies they apply in doing so, thereby contributing empirical and theoretical insights to institutional work literature (Bohnsack et al., 2016;Hardy and Maguire, 2008;van Doren et al., 2020). However, this perspective is being criticized for focusing too much on the 'heroic actions' of a few actors to effect institutional change and the conditions required to accommodate them, rather than the continuous work of many actors in many directions (Hardy and Maguire, 2008;Lawrence et al., 2011). ...
Article
Open Access available through: https://doi.org/10.1016/j.eist.2021.08.002 Offshore wind farms (OWF) are considered important for a timely energy transition. However, offshore space is governed by sector-specific institutional frameworks representing various and sometimes conflicting interests. Therefore, institutional change towards improved cooperation and coordination between various stakeholders, their interests and alternative institutional frameworks is necessary. Institutional work is used as an analytical lens to explore patterns resulting from the interplay between different forms of institutional work by actors over time. Data was collected through participatory observation of the Dutch North Sea Dialogues (NSD) and focused on balancing interest in the context of multi-use of OFW. Institutional change in this case relied mostly on a highly subtle interplay between forms of creating and maintaining work that result in incremental changes to existing practices. Sustainability transitions could benefit from institutional harmonization as a pathway to institutional change for improved cross-sectoral coordination and cooperation.
... In management studies, sustainability issues have received increasing attention in recent years and meanwhile, there is a substantial body of literature on what has been labeled as 'corporate sustainability' (Linnenluecke and Griffiths, 2013;van Marrewijk, 2003). Among others, management scholars have analyzed the conditions under which firms respond to sustainability challenges and social responsibility issues (Aragón-Correa and Sharma, 2003;Bansal and Roth, 2000;Campbell, 2007), whether it pays to be green, or socially responsible (Hart and Ahuja, 1996;King and Lenox, 2001;Kölbel et al., 2017;Margolis and Walsh, 2003), how firms react to sustainability issues such as climate change (Buhr, 2012;Engau and Hoffmann, 2011;Kolk and Pinkse, 2005;Levy and Kolk, 2002), or how new (green) industries emerge and how firms, and other organizations, contribute to this (Bohnsack et al., 2016;Garud and Karnoe, 2003;Sine and Lee, 2009). Moreover, there are numerous studies that address issues such as climate change, renewable energy industries or environmental regulation, which are not framed as a contribution to corporate sustainability but to a specific theoretical discourse on e.g. ...
... Moreover, there are numerous studies that address issues such as climate change, renewable energy industries or environmental regulation, which are not framed as a contribution to corporate sustainability but to a specific theoretical discourse on e.g. institutional or technological entrepreneurship (Garud and Karnoe, 2003;Wijen and Ansari, 2007), institutional work (Lefsrud and Meyer, 2012;Slager et al., 2012), corporate political strategy (Levy and Egan, 2003) or institutional change more generally (Bohnsack et al., 2016;Hoffman, 1999). ...
... These include rather 'classic themes' such as the creation of common pool, or system resources (e.g. environmental standards, platforms, intermediaries, multi-lateral agreements) in emerging clean-tech industries and the conditions for, and strategies of different organizations taking part in these processes (Bohnsack et al., 2016;King and Lenox, 2000;Musiolik et al., 2012;Slager et al., 2012;Wijen and Ansari, 2007). A closely related theme is the creation (or re-creation) of legitimacy, which is essential for industry creation (Aldrich and Fiol, 1994;Johnson et al., 2006;Rao, 2002) and mobilizing public policy support for 'sustainable' technologies (Binz et al., 2016;Markard et al., 2016b). ...
Conference Paper
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Novel ways of thinking and theorizing are needed, given the persistence and magnitude of contemporary sustainability challenges. While management scholars have approached sustainability issues from different perspectives, critical voices find the research agenda on corporate sustainability too narrow, theoretical approaches ill-suited, and the impact on practice limited, if not adverse. This article introduces the research field of 'sustainability transitions' and explores how its general approach and some of its concepts can be mobilized to address these issues. Sustainability transitions research studies fundamental and long-term changes of sectors such as energy, transportation or food toward more sustainable modes of production and consumption. It is based on systemic theorizing thereby mobilizing middle range frameworks such as the multi-level perspective or technological innovation systems. For management scholars interested in sustainability, the field of sustainability transitions offers highly relevant and potentially impactful research, empirical and conceptual challenges, novel frameworks and interdisciplinary perspectives, which altogether make it a promising terrain to explore.
... In management studies, sustainability issues have received increasing attention in recent years and meanwhile, there is a substantial body of literature on what has been labeled as 'corporate sustainability' (Linnenluecke and Griffiths, 2013;van Marrewijk, 2003). Among others, management scholars have analyzed the conditions under which firms respond to sustainability challenges and social responsibility issues (Aragón-Correa and Sharma, 2003;Bansal and Roth, 2000;Campbell, 2007), whether it pays to be green, or socially responsible (Hart and Ahuja, 1996;King and Lenox, 2001;Kölbel et al., 2017;Margolis and Walsh, 2003), how firms react to sustainability issues such as climate change (Buhr, 2012;Engau and Hoffmann, 2011;Kolk and Pinkse, 2005;Levy and Kolk, 2002;Wright and Nyberg, 2016), or how new (green) industries emerge and how firms, and other organizations, contribute to this (Bohnsack et al., 2016;Garud and Karnoe, 2003;Sine and Lee, 2009). Moreover, there are numerous studies that address issues such as climate change, renewable energy industries or environmental regulation, which are not framed as a contribution to corporate sustainability but to a specific theoretical discourse on e.g. ...
... Moreover, there are numerous studies that address issues such as climate change, renewable energy industries or environmental regulation, which are not framed as a contribution to corporate sustainability but to a specific theoretical discourse on e.g. institutional or technological entrepreneurship (Garud and Karnoe, 2003;Wijen and Ansari, 2007), institutional work (Lefsrud and Meyer, 2012;Slager et al., 2012), corporate political strategy (Levy and Egan, 2003) or institutional change more generally (Bohnsack et al., 2016;Hoffman, 1999). Finally, management scholars have also started to engage with the challenges of fundamental, sustainability oriented transformations of established sectors and industries, including the need to develop new frameworks for both theory building and strategy making (Etzion et al., 2017;Garud and Gehman, 2012;Wittneben et al., 2012). ...
... These include rather 'classic themes' such as the creation of common pool, or system resources (e.g. environmental standards, platforms, intermediaries, multi-lateral agreements) in emerging clean-tech industries and the conditions for, and strategies of different organizations taking part in these processes (Bohnsack et al., 2016;King and Lenox, 2000;Musiolik et al., 2012;Slager et al., 2012;Wijen and Ansari, 2007). A closely related theme is the creation (or re-creation) of legitimacy, which is essential for industry creation (Aldrich and Fiol, 1994;Johnson et al., 2006;Rao, 2002) and mobilizing public policy support for 'sustainable' technologies (Binz et al., 2016;Markard et al., 2016b). ...
... While this outcome would have not been possible without Henri and Nina's early dedication to the process, your comments still serve as a source of professional reinforcement to me, and I am now considering developing them into framed posters or oversized laminated out-prints that I can return to in 1. Introduction Solar technology has emerged as a significant option in energy provision in a rather short time. Prices for solar photovoltaic (PV) systems have decreased rapidly from 2005 to 2015 and the industry has turned into a major business with a global outlook (Bohnsack, Pinkse, & Waelpoel, 2015;Solar Power Europe, 2015). Solar energy is also often considered a spreadhead technology in the transition of the energy domain towards an increased use of new renewable energy sources. ...
... The country is also characterized as one of the harshest contexts for the technology globally (Haukkala, 2015;Hakkarainen et al. 2015;WWF Finland, 2013). These observations are worthwhile considering that governments around the globe have invested in developing supportive policies for boosting local industries and markets, such as Germany as the early market leader (Bohnsack, Pinkse, & Waelpoel, 2015; International Energy Agency 2018a) and countries with similar conditions like the U.K., Canada, Sweden and Denmark as some examples Walker, Schlosser, & Deephouse, 2014). Finland also has similar over the year insolation rates to Germany, which also gives reason to wonder how the mobilization of initial actors has come to stagnate over multiple decades. ...
... Hence, while solar is also produced in large power plants, it has spread widely as a decentralized technology. In the latter case the adoption of feed-in-tariff policies support the technology by giving renewable energy sources priority in the electric grid and allowing the small-scale producer to sell back excess electricity to the electric grid (Bohnsack et al., 2015). Solar energy has a fairly long global history, with initial interest having increased for the first time during the two oil crises, that triggered a global search for alternative energy sources (Bohnsack et al., 2015). ...
... An example is that of gatekeeping public actors, who make decisions whether companies are allowed to operate or not in a certain market (Glassmann, 2008;Jolly, 2017;Yep, 2015;Zietsma and Lawrence, 2010). Public actors can also influence the attractiveness of a market by setting rules that restrict the volume of business activity (Bartley, 2007;Li et al., 2018;Zietsma and Lawrence, 2010), and they often control prices (Bohnsack et al., 2015;Jolly, 2017;Walker et al., 2014;Zhang and White, 2016). ...
... Changing taxation (Buhr, 2012;Zhang and White, 2016) Enforcing (Bertella, 2017;Jolly, 2017;Li et al., 2018;Litrico and David, 2017;Zhao et al., 2017) Financial backing (Bartley, 2007;Benn et al., 2014;Bohnsack et al., 2015;Canales, 2016;Cao et al., 2014;Elliot, 2016;Gasbarro et al., 2018;Glassmann, 2008;Jolly, 2017;Kukk et al., 2016;Thomas and Thomas, 2018;Zhang and White, 2016) Gatekeeping (Glassmann, 2008;Jolly, 2017;Yep, 2015;Zietsma and Lawrence, 2010) Legislating (Br es and Gond, 2014;Koene, 2006) Rule-and price-setting (Bartley, 2007;Bohnsack et al., 2015;Jolly, 2017;Li et al., 2018;Walker et al., 2014;Zhang and White, 2016 (Binz et al., 2016) Educating (Binz et al., 2016;Canales, 2016;Glassmann, 2008;St al, 2015) Lobbying (Binz et al., 2016;Kukk et al., 2016) Mimicking (Binz et al., 2016) Orchestrating collaboration (Bartley, 2007;Canales, 2016;Jolly, 2017) Researching (Alvarez et al., 2015;Binz et al., 2016;Buhr, 2012;Litrico and David, 2017) Standardizing (Bartley, 2007;Buhr, 2012;Litrico and David, 2017) Venturing (Sarasini, 2013) Visioning (Canales, 2016;Jolly, 2017;Jolly and Raven, 2015;St al, 2015) Jolly and Raven, 2015;St al, 2015). However, the discussion on cultural-cognitive work has mostly been confined to brief descriptions of how public actors influence common beliefs, for instance, through research (Alvarez et al., 2015;Binz et al., 2016;Buhr, 2012) and education, in particular, providing information and training materials (Canales, 2016;St al, 2015). ...
... Changing taxation (Buhr, 2012;Zhang and White, 2016) Enforcing (Bertella, 2017;Jolly, 2017;Li et al., 2018;Litrico and David, 2017;Zhao et al., 2017) Financial backing (Bartley, 2007;Benn et al., 2014;Bohnsack et al., 2015;Canales, 2016;Cao et al., 2014;Elliot, 2016;Gasbarro et al., 2018;Glassmann, 2008;Jolly, 2017;Kukk et al., 2016;Thomas and Thomas, 2018;Zhang and White, 2016) Gatekeeping (Glassmann, 2008;Jolly, 2017;Yep, 2015;Zietsma and Lawrence, 2010) Legislating (Br es and Gond, 2014;Koene, 2006) Rule-and price-setting (Bartley, 2007;Bohnsack et al., 2015;Jolly, 2017;Li et al., 2018;Walker et al., 2014;Zhang and White, 2016 (Binz et al., 2016) Educating (Binz et al., 2016;Canales, 2016;Glassmann, 2008;St al, 2015) Lobbying (Binz et al., 2016;Kukk et al., 2016) Mimicking (Binz et al., 2016) Orchestrating collaboration (Bartley, 2007;Canales, 2016;Jolly, 2017) Researching (Alvarez et al., 2015;Binz et al., 2016;Buhr, 2012;Litrico and David, 2017) Standardizing (Bartley, 2007;Buhr, 2012;Litrico and David, 2017) Venturing (Sarasini, 2013) Visioning (Canales, 2016;Jolly, 2017;Jolly and Raven, 2015;St al, 2015) Jolly and Raven, 2015;St al, 2015). However, the discussion on cultural-cognitive work has mostly been confined to brief descriptions of how public actors influence common beliefs, for instance, through research (Alvarez et al., 2015;Binz et al., 2016;Buhr, 2012) and education, in particular, providing information and training materials (Canales, 2016;St al, 2015). ...
Article
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Purpose: This study aims to identify institutional work mechanisms that public actors employ in market shaping. Design/methodology/approach: The paper uses an abductive theorizing process, combining a literature review with an empirical exploration of three different market-shaping contexts. Findings: The study identifies 20 granular mechanisms of institutional work that market-shaping public actors employ. These mechanisms are all potentially employable in creating, maintaining or disrupting markets. Institutional work vis-a-vis individual institutions may differ in direction from the institutional work vis-a-vis the market system. Public actors are not a homogeneous group but may have different values and support competing institutional logics even when operating in the same market. Research limitations/implications: The empirical data were limited to three cases in three small open economies. Data collected from other markets and with other methods would provide more rigorous insight into market-shaping public actors. Practical implications: The findings revealed institutional work mechanisms that public actors can use to shape markets. Companies wanting to engage public actors in market shaping should be aware of the values and institutional logics that influence market-shaping public actors. Originality/value: The paper unites and expands on the scattered knowledge regarding institutional work in market shaping. It illuminates and dissects the role of public actors in market shaping, challenging the reactive stance that is often assigned to them. The study provides a better understanding of how conflicting market views affect markets. It also brings insights into the interplay between market-shaping actions and the multiple levels of market systems.
... It can follow from actions through which core assumptions and beliefs are changed, or actions through which rewards and sanctions become disconnected from norms or rules that they are supposed to uphold. Furthermore, the introduction of new, alternative coordination mechanisms can change the meaning and implications of existing institutions, potentially disrupting them, over time (Bohnsack et al., 2016, Djanibekov et al., 2016. Both stability and flexibility are likely to be inextricably part of every governance system (Van Assche et al., 2014). ...
... Particular attention needs to be given to the role of cognitive factors (e.g. perspectives, ideologies, beliefs, opinions, values or narratives) that drive institutional work, and how they are produced and reproduced through institutional work behaviours (Bohnsack et al., 2016). For example, the act of enforcing laws reproduces the social norms underpinning these laws, while avoiding enforcement of particular laws might create alternative forms of coordination that not only erode the law itself, but also the underlying norms (Beunen and van Assche, 2013). ...
Article
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Resilience has become a key concept in the sciences and practices of environmental governance. Yet governing for resilience is a major challenge because it requires governance systems to be both stable and flexible at the same time. Achieving a productive balance between stability and flexibility is a key challenge. The concept of "institutional work" is a promising lens for analysing the dynamic tension between stability and flexibility in governance systems. It refers to actions through which actors create, maintain, or disrupt institutional structures. The paper explains the concept of institutional work and shows how it usefully integrates several emerging lines of study regarding agency in governance, which have so far remained separate. Overall, the concept of institutional work opens up novel opportunities for analysing the interactions between actors and institutional structures that produce stability and flexibility in governance systems.
... Key insights from these studies are that 1) technology development needs to be complemented by market formation, value-chain creation and regulatory and institutional changes, 2) firms often form alliances to achieve such complex tasks and 3) resistance from existing structures and interests is often substantial. It is important to note that while many studies have looked into the emergence of new industries (Bergek and Jacobsson, 2003;Garud and Karnøe, 2003;Budde et al., 2012;Bohnsack et al., 2016), industry re-orientation and decline has so far received much less attention (Dolata, 2009;Karltorp and Sandén, 2012;Turnheim and Geels, 2012). ...
... Studies have shown how businesses and other actors shape their institutional environments with discourse activities and framing, through political coalition building and lobbying, or by strategically influencing collective expectations (Garud et al., 2010;Konrad et al., 2012;Hess, 2014;Sühlsen and Hisschemöller, 2014;Rosenbloom et al., 2016). A closely related issue is the creation (or undermining) of legitimacy in relation to firms, business models and technologies, which has been observed as an essential element in the struggle for public policy support of new technologies (Bergek et al., 2008b;Bohnsack et al., 2016;Markard and Hoffmann, 2016;Markard et al., 2016b). ...
Article
Research on sustainability transitions has expanded rapidly in the last ten years, diversified in terms of topics and geographical applications, and deepened with respect to theories and methods. This article provides an extensive review and an updated research agenda for the field, classified into nine main themes: understanding transitions; power, agency and politics; governing transitions; civil society, culture and social movements; businesses and industries; transitions in practice and everyday life; geography of transitions; ethical aspects; and methodologies. The review shows that the scope of sustainability transitions research has broadened and connections to established disciplines have grown stronger. At the same time, we see that the grand challenges related to sustainability remain unsolved, calling for continued efforts and an acceleration of ongoing transitions. Transition studies can play a key role in this regard by creating new perspectives, approaches and understanding and helping to move society in the direction of sustainability.
... Innovations such as low-cost solar panel components have encouraged households and communities to produce energy on a micro-scale (e.g., Bohnsack et al., 2016;de Vries et al., 2016). This phenomenon is said to challenge the business-as-usual for energy companies (Løstrup et al., 2013;Watson and Devine-Wright, 2011), or even to cause a paradigm shift that will ultimately affect energy companies' operating environment along with their competitiveness (Schleicher-Tappeser, 2012). ...
Article
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Energy innovations have enabled micro-scale energy production that is challenging energy companies’ business models and operating environment. This article examines micro-producers of energy as energy “prosumers”—hybrid producers and consumers—and as a challenge to the current logic of energy companies’ stakeholder relations. The data consists of interviews and participant observations of Finnish private solar panel owners and energy company representatives. The relationship between energy prosumers and the energy company is found to be a co-producing stakeholder relation that is issue-centric, not organization-centric. Energy prosumers have heightened expectations of how they should be acknowledged by the energy company, particularly concerning reciprocity. The article clarifies the role of the energy prosumer as a new type of stakeholder and connects prosumer relations to the notion of co-production. Thus, the article offers valuable information for energy companies when they update their business models to embrace prosumer relations and community involvement.
... More specifically, extant literature illustrates that the introduction of novelty, such as a new technology, frequently results in the emergence of new business models as well as institutional upheaval (Bohnsack et al., 2016;Ernkvist, 2015;Laurell and Sandström, 2014). When this occurs, institutions, i.e., formal and informal "humanly devised constraints that structure human interaction" (North, 1990, p. 3), are subjected to change. ...
Article
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How is the sharing economy framed and who are the main actors driving current developments? Utilizing Social Media Analytics (SMA) for institutional analysis, we track the formation of the sharing economy in Sweden, its actors and their impact. Our findings reveal that the sharing economy in Sweden currently encompasses a wide variety of both non-market and market practices. Discussions concerning commercial exchanges, the role of profit-driven firms such as Uber and Airbnb, and the emergence of a market logic has created a state of instability. Our results point at several unresolved issues, such as taxation and regulation. Based on these findings, we suggest an expanded definition of the sharing economy which incorporates both market and non-market logics.
... While the observation that radical innovations and socio-technical transitions are accompanied by institutional change is certainly not new (Van den Belt and Rip, 1987), the analysis of such change processes in terms of institutional entrepreneurship and institutional work is rather recent (Bakker, 2014;Bohnsack et al., 2016;Fuenfschilling and Truffer, 2016;Kukk et al., 2016;Rogers et al., 2016;Moors et al., 2018). Institutional work analysis in the context of radical innovation may well increase our understanding of innovation and entrepreneurship more generally, as it would emphasize that innovation is not onlyand in some cases not even primarilyabout technological advance or gauging market demand, but also about actively challenging and creating institutions in a way that an innovation becomes legitimate and accepted. ...
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Platform innovations like Uber and Airbnb allow peers to transact outside established market institutions. From an institutional perspective, platform companies follow a reverse innovation process compared to innovation within traditional regulatory systems: they first launch their online platform and ask for government permission only later. We analyze the emergence of Uber as an institutional entrepreneur in The Netherlands and the strategies it employed in a failed attempt to get its UberPop service legalized through changes in Dutch taxi law. We conclude that Uber's failure to change the Dutch taxi law stemmed from the difficulty to leverage pragmatic legitimacy among users into favorable regulatory changes in a highly institutionalized regime, because Uber's institutional work strategies were not aligned.
... Additionally, the role of MNEs in the creation of industries for renewable energy provides an interesting opportunity to further examine linkages between the firm strategies and transition processes. A recent study by Bohnsack et al. (2016) in this realm showed how firms influenced the creation of the solar energy industry between 1982 and 2012. Their analysis showed that "companies and governments were both found to be dominant actors in driving the institutional evolution process that laid the foundation for the creation of the global solar industry", whereby companies "were responsible for the technological breakthroughs that changed the institutional foundation of the industry by making mainstream production possible and allowing for an efficiency-based business model to become dominant" (Bohnsack et al., 2016, 31). ...
... Furthermore, firms are involved in developing regular and personal contact with policy makers and also engage in influencing policy debates through media outlets, advertising and using press conferences to influence decision makers [38]. Further, key actors such as governments are likely to have more influence on regulations, firms would have more influence on technological standards, and NGOs are likely to have more influence on popular discourses around environmental values [15]. Also, institutional entrepreneurship is argued to be an act of experimentation and improvisation, in which success is not always guaranteed and contestations in the process can be expected; it involves adapting to unanticipated developments and improvising actions in order to face ongoing uncertainties [71]. ...
Article
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A growing body of literature has examined the dynamics of wind energy development across differ- ent mature and emerging institutional contexts. However, so far only few have paused to reflect on the differences between developed and emerging economies. Building upon the literature on institu- tional entrepreneurship, this paper compares institutional strategies in wind energy development in Finland and India by using the typology of political, technical and cultural work. We highlight the role of institutional approaches in studying sustainable energy transitions in mature and emerging institutional contexts, while being sensitive to the role of heterogeneous actors in shaping institutional arrangements. Our findings offer implications for debates in the institutional entrepreneurship literature by exploring how actors shape their institutional environment in different contexts, and the extent to which emerging institutional contexts provide more opportunities for institutional entrepreneurship. Finally, this paper underscores the need for developing insights into enabling conditions for successful collective institu- tional entrepreneurship and for developing typologies of institutional strategies which are generalizable across both mature and emerging institutional contexts.
... For example, there are arguments to the effect that sector-based policy initiatives are more effective in supporting diffusion while broad, cross-sector initiatives are more cost-efficient, but not as effective in pushing diffusion. In order to give targeted advice for the transformation of specific sectors, it seems appropriate to analyse diffusion with regard to the characteristics and differences between sectors (Bohnsack et al., 2016;Cainelli and Mazzanti, 2013). As most recent systematic literature reviews reveal, diffusion research on environmental product and service innovations has until now been limited to studies that focus on only one sector or technology, usually energy, and on a small number of diffusion cases in individual sectors (Clausen and Fichter, 2019). ...
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Empirical research on the diffusion of environmental product and service innovations has significant limits: almost all investigations focus on just a single sector or technology, usually energy, and concern a small number of diffusion cases. Therefore, it is hardly possible to generalize across sectors and to identify potential differences between sectors. We address this research gap with an investigation of a large sample of 130 diffusion cases from 11 different sectors. We apply a new mixed-method approach of statistical analysis and qualitative extreme case analysis. We provide insights on the differences in dissemination rates and knowledge on sector-specific factors. This helps to explain diffusion processes and design effective sector-specific transition policies. The concept of explanation range of factors clarifies the role and relevance of different diffusion factors and opens up avenues for further research on environmental innovation. Based on our findings, it can be concluded that some factors explain diffusion in (almost) all cases (high explanatory range), some only in specific sectors (medium explanatory range), and some merely in individual cases (low explanatory range).
... Over time, they become incapable of changing responses to reorientation and diversification not only through the reinforcing mechanisms but also by policy and institutional changes. The changes can destroy their competitive position for the benefit of development of the industry as a whole (Bohnsack et al., 2016). Fig. 1 provides a schematic summary of the typologies of responses, underlying three factors, and causal mechanisms that generate heterogeneous responses of incumbent companies as an analytical framework. ...
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Transitions research has often been unintentionally biased toward novelty and assumes incumbents as homogeneous groups that are “locked-in” to certain sociotechnical regimes. In reality, incumbents are heterogeneous at the company and industrial levels and thus have heterogeneous responses that can both accelerate and deter sustainability transitions. To fill the research gap, this paper explores the determinants of such heterogeneous responses and insights for sustainability transitions, taking China’s major incumbent power generators as its case study. The results are: first, incumbent companies respond heterogeneously if firm-specific, socioeconomic, and institutional factors give different opportunities and barriers. Policy feedback effects and development of complementarities in infrastructure, instruments, and organizational elements can increase heterogeneous responses. Second, their heterogeneous responses can accelerate sustainability transitions if they go beyond destabilization of regime, legitimization of alternative policy instruments, and development of infrastructure and institutions that trigger co-evolution with socioeconomic and institutional factors.
... Source: Developed by the authors based on a review of the 13th FYP for energy sector development. (Boons and Ludeke-Freund, 2013;Loorbach et al., 2010), market and regulatory changes required to facilitate a successful low-carbon innovation (Bakker, 2014;Bohnsack et al., 2016), incumbency effects on obstructing or promoting low-carbon innovations (Dijk et al., 2016;Lauber and Jacobsson, 2016;Smink et al., 2015), and technical and economic potentials of various low-carbon technologies (Moriarty and Honnery, 2012). ...
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... Institutional transition captures the shifting recalibration and recreation of institutions and industries around new and evolving technologies (Bohnsack et al., 2016;Heldeweg, 2017;Jolly et al., 2016). Within this framing, and in the context of the contemporary energy transition discourse, private energy corporations can be construed as part of societal institutions and industries needing recalibration. ...
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... Whilst the sustainable transition literature has begun to consider the role of different actors more closely (Martiskainen & Kivimaa, 2018;Bohnsack et al., 2016;Upham et al., 2020), there is as of yet no literature addressing the role of publicly funded organisations for accelerated innovation and their role in sustainable transition. This paper contributes to this understanding by refining a framework of ten principles for accelerated innovation organisation design, originally developed by Haley (2016; Results demonstrate that whilst the ETI aimed to accelerate revolutionary innovation, its design reflected the power and relationships within the broader system. ...
Thesis
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Accelerated clean electricity innovation is essential if global climate change targets are to be met by 2050. National innovation policy strategies are identified as key in delivering this, requiring policy makers to develop new approaches to technology funding and market development. At present, the role of politics in the emergence and implementation of innovation policy is not well understood by the innovation systems literature. There is therefore a gap in knowledge in relation to how national institutions shape the development of clean electricity innovation systems and how publicly funded organisations can be designed to accelerate innovation within them. This thesis addresses this gap by analysing how national institutions have affected the design of two publicly funded organisations for accelerated clean electricity innovation- the Energy Technologies Institute (ETI) in the UK and Advanced Research Projects Agency- Energy (ARPA-E) in the US. The thesis opens with a paper that refines a layered institutional framework, demonstrating the effect of multiple institutions on the development of the UK’s clean electricity innovation system 2000- 2018. The second paper builds on this system overview to introduce the case study of the ETI. The ETI’s operation is analysed through a refined framework of ten principles for accelerated innovation organisation design, which explore how the formation and operation of an organisation is affected by the broader institutional conditions introduced in paper one. Paper three further develops the ten principles via a comparative case study of the ETI and ARPA-E. The impact of different national institutional contexts on organisation design is discussed and generalisable approaches for accelerated innovation explored. This thesis offers two main theoretical contributions. Firstly, the refinement of a layered institutional framework for application to a sectoral innovation system, which brings new insights to understanding the role of institutions in shaping innovation system development. Secondly, the refinement and further development of ten principles for accelerated innovation organisation design, which contributes a theoretical link between national institutional conditions and how publicly funded organisations can be designed within this to implement innovation policy. This research also makes three key theoretical contributions. It consists of the first in-depth analysis of the role of institutions in the development of the UK clean electricity innovation system from 2000- 2018. It also provides the first academic analysis of the operation of the ETI, UK since the organisation ceased operation in 2017, adding a detailed study of a public-private partnership in a European setting to the growing literature on innovation organisation design. Finally, the thesis provides the first comparison of the operation of the ETI and ARPA-E, US, providing an international case study of two long-lived accelerated innovation organisations while taking into account the broader national innovation systems in which they have been developed. The policy contributions of the thesis include new insights into the need for policy makers to pay greater attention to institutional context when designing and implementing innovation policy and public organisations for accelerating low carbon innovation. More prescriptive recommendations are also made in relation to the way in which UK policy makers can learn from US clean energy innovation system development.
... At the same time, the corporate entrepreneur is a key element in business development and, in turn, in the economic sphere (Antoncic and Hisrich 2001;Elsbach and Stigliani 2018). Intentionally or unintentionally, therefore, the individual can modify the corporate environment and participate actively in implementing changes that diverge from existing institutional habits (Bohnsack et al. 2016). Employees with a corporate entrepreneurial orientation are characterised by proactivity, goal-achieving behaviour and autonomous activity (Boon et al. 2013;Sinha and Srivastava 2013). ...
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The dynamic business environment requires continuous innovative adaptations by the organisation to sustain itself and grow. Thus, corporate entrepreneurship acquires particular importance. This study uses the Multi-Level Perspective to compare the transitions and links that lead to the development of entrepreneurial activity in the organisation. For this purpose, a survey was carried out among the managers of 233 small and medium-sized enterprises (SMEs) in Madrid. The study uses the crisp set Qualitative Comparative Analysis, making it possible to explore the interdependence between conditions. For the analysis we have considered the niche (individual), the regime (organisation) and the landscape (the environment) levels. Especially, in the landscape level: resident population, population growth rate, and the number of existing productive units. At the regime level, creative strategies and proactivity in the organisation are considered, and at the niche level, the variables considered are training received linked to agile methodologies, leadership and innovation. Results show that the landscape conditions are not necessary for entrepreneurial development in the organisation, and intra-entrepreneurial activity can occur independently; the regime conditions analysed are not sufficient and need to be linked to the niche variables. Our results also suggest that the organisation must strategically manage these variables for corporate entrepreneurial growth.
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This study extends the ambit of the debate on electricity transition by specifically identifying possible policy entry points through which transformative and enduring changes can be made in the electricity and socio—economic systems to facilitate the transition process. Guided by the “essence” of the multi-level perspective — a prominent framework for the study of energy transition, four such entry points have been identified: 1) destabilising the dominant, fossil fuel-based electricity regime to create room for renewable technologies to break through; 2) reconfiguring the electricity regime, which encompasses technology, short-term operational practices and long-term planning processes, to improve flexibility for accommodating large outputs from variable renewable sources whilst maintaining supply security; 3) addressing the impact of coal power phase-out on coal mining regions in terms of economic development and jobs; and 4) facilitating a shift in transition governance towards a learning-based, reflexive process. Specific areas for policy interventions within each of these entry points have also been discussed in the paper.
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A global conversion of energy production and consumption into renewable alternatives is required if climate targets are to be met. Solar photovoltaic systems (PVs), which convert sunlight into electricity, are an energy source that is receiving increasing attention. However, PVs are not competitive on the energy market and have therefore been dependent on governmental support through market interventions since their introduction. The aim of this paper is to find out what overall conclusions may be drawn after 40 years of experience in trying to establish the PV technology on the market through market interventions. In order to answer that aim, a systematic literature review of peer-reviewed studies on PV technology and market interventions from 1979 to 2019 is presented. The review clearly indicates that market barriers and interventions show great similarities over time and the technology is still dependent on government interference. The need for interventions does not look to decrease in the near future. The review also shows that market constructions by governments are short term in character. A conclusion drawn is that governments may sustain market interventions until nondesirable sources of energy are phased out.
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Bu çalışmada, kurumsal kurama göre devletin kurumsal girişimcilik rolü ince-lenmiştir. Yapılan incelemeler, devletin farklı bağlamlar ve örgütsel alanlardaki kurumsal süreçlerde kurumsal girişimci olarak etkili olduğunu göstermektedir. Devletin farklı ülke bağlamları ve örgütsel alanlarda bazen benzer bazen de farklı şekillerde kurumsal girişimci olarak önemli rol oynadığı görülmektedir.
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The Chinese government has implemented a comprehensive strategy to push low-emission vehicles (LEVs). Local municipalities have played an important role in this transition. Programmes such as the "Ten Cities Thousand Vehicles" (TCTV) created local niches for the development of LEVs in which public and private actors can experiment without market pressures. However, often the setup of the local niches has favoured local companies which led to incompatibility across provinces and barriers to diffusion. This article aims to explore the dynamics in the local niche and how the niche has been shaped by local protection and firm responses. Heeding the call for a better conceptualization of the spatial dimension in sustainability transitions, we draw on the recent second generation, multi-scalar multi-level perspective (MLP) and conceptualize the local niche. Based on our empirical results we find four ideal type local niches-the open niche, the technology shielding niche, the market shielding niche and the closed niche-and distill respective firm responses. This has important implications for policy-makers and managers in China and for industries in sustainability transition in general.
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Despite the growing interest of sustainability transition studies on the role of business actors in shaping transitions, the institutionalized logic of the capitalist enterprise underlying such agency has been overlooked. However, such logic might be understood as a dominant regime that leads to unsustainable systems. We intend to contribute to transitions research by focusing on the agency of social enterprises as non-dominant actors searching for challenging and transforming the institutionalized logics in the business system. Therefore, we disentangle the institutional mechanisms driven by social enterprises by proposing a theoretical model built upon a literature review of sustainability transitions from institutional perspectives, offering a set of explanatory propositions to allow empirical examination. Those mechanisms and propositions operate at three levels: inside the individual, inside the niche, and at the interplay between the niche and the business regime. Finally, we include a real-world example of a social enterprise to illustrate the model.
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Global production is largely considered a ‘silver bullet’ that can achieve sustainable energy access for all by 2030. Off-grid solar (OGS) power generation systems are a widely studied case for accelerating energy transitions for the global poor. While OGS is often analyzed at national or subnational levels, little is known about the role of global production networks (GPNs) in scaling energy access in the Global South. The present study addresses this research gap by applying a neoGramscian approach to examine interactions between GPNs and national regulatory frameworks by considering cases in the Indian and Kenyan OGS sector. Employing a comparative research design, 39 qualitative expert interviews were conducted in Hong Kong, New Delhi, and Nairobi. The study identifies two different avenues taken by coalitions of public and private stakeholders to embed GPNs in the Indian and Kenyan OGS markets. In India, a competitive approach was found to governing GPNs, whereas a distribution of labor was predominant in Kenya. Future research should further investigate how and why GPNs become part of energy transitions in the Global South to stabilize assumptions regarding the future of energy systems.
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Material constraints may slow the pace of energy transition if the materials intensity of renewable energy technologies remains the same. Innovations in solar photovoltaics (PV) can contribute to achieving lower material demands. In this research, the actor-centered institutionalism framework, transitions literature and the science-policy interface framework are used to analyze how the involved actors perceive the transition towards more resource-efficiency in solar PV, what their preferences are, and how government should support this transition. Altogether, resource-efficiency is not sufficiently supported, while it is considered extremely important in the future of solar PV according to various involved actors. Traditional silicon-based solar panels are locked-in into the current policy landscape. Actors prioritizing resource-efficiency interact in a niche space, while actors involved in traditional silicon-based PV form the regime. Improved alignment between science and policy actors would help ease disagreements and prevent or benefit from path-dependency, thus, supporting resource-efficiency in solar PV.
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Now organizations are always vulnerable to the liabilities of newness, but such pressures are especially severe when an industry is in its formative years. We focus on one set of constraints facing entrepreneurs in emerging industries-their relative lack of cognitive and sociopolitical legitimacy. We examine the strategies that founders can pursue, suggesting how their successful pursuit of legitimacy may evolve from innovative ventures to broader contexts, collectively reshaping industry and institutional environments.
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This study measured changes in the constituency of an organizational field centered around the issue of corporate environmentalism in the period 1960-93, correlating those changes with the institutions adopted by the U.S. chemical industry to interpret the issue. The article develops the ideas that fields form around issues, not markets or technologies; within fields, competing institutions may simultaneously exist; as institutions evolve, connections between their regulative, normative, and cognitive aspects arise; and field-level analyses can reveal the cultural and institutional origins of organizational impacts on the natural environment.
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While sustainable entrepreneurs face market barriers that require them to become politically active, how to accomplish this has not yet been explored. This paper seeks to address this research gap based on an exploratory study of the Dutch clean energy sector. Findings suggest that sustainable entrepreneurs are politically active, but pursue these activities using collective action. This raises issues because they face the presence of incumbents in industry associations that seek to thwart their political influence. The paper concludes with propositions about conditions for sustainable entrepreneurs to realize political access and influence through collective action.
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In a qualitative study of the emerging field of HIV/AIDS treatment advocacy in Canada, we found that institutional entrepreneurship involved three sets of critical activities: (1) the occupation of "subject positions" that have wide legitimacy and bridge diverse stakeholders, (2) the theorization of new practices through discursive and political means, and (3) the institutionalization of these new practices by connecting them to stakeholders' routines and values.
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Neoinstitutionalists have developed a rich array of theoretical and empirical insights about how new practices become established via legitimacy and diffusion, but have paid scant attention to their origins. This blind spot has been reinforced by recent work on institutional entrepreneurship which has too often celebrated the actions of a single or small number of actors, and deflected attention away from the emergent, multilevel nature of how new kinds of activities emerge and provide a foundation for the creation of a new practice. In this paper, we examine the case of the creation of active money management practice in the US mutual fund industry, drawing on both institutional and practice scholarship, to develop a process model of new practice creation that redirects attention toward the multiplicity of actors that interactively produce change.
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The institutional entrepreneurship implicit in a firm's sponsorship of its technology as a common standard is beset by several challenges. These challenges arise from a standard's property to enable and constrain even as potential competitors agree to cooperate on its creation. Our exploration of Sun Microsystems's sponsorship of its Java technology suggests that standards in the making generate seeds of self-destruction. Our study also identifies the social and political skills that a sponsor deploys to address these challenges.
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In this paper, we adopt a discourse analytic methodology to explore the role of institutional entrepreneurs in the process of institutional change that coincides with the adoption of a radically new technology. More specifically, we examine how Kodak managed to transform photography from a highly specialized activity to one that became an integral part of everyday life. Based on this case, we develop an initial typology of the strategies available to institutional entrepreneurs who wish to affect the processes of social construction that lead to change in institutional fields. The use of discourse analysis in analysing institutional change provides new insights into the processes through which institutional fields evolve as well as into how institutional entrepreneurs are able to act strategically to embody their interests in the resulting institutions.
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In this chapter, we aim to provide a summary and synthesis of research on what we refer to as 'institutional work' - the purposive action of individuals and organizations aimed at creating, maintaining and disrupting institutions. Thus far, research on institutional work has been largely unconnected as such - literatures on institutional entrepreneurship and deinstitutionalization have emerged as semi-coherent research streams, but the overall focus has remained largely unarticulated. Thus, a key contribution of this chapter will be the provision of a framework that connects previously disparate studies of institutional work and the articulation of a research agenda for the area. By focusing on empirical work that has occurred in the past 1 5 years and mapping i t i n terms of the forms of institutional work that it has examined, we are able to both provide a first cataloguing of forms of institutional work and point to issues and areas that have been under-examined.
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In this paper, we draw on a case study of the development of commercial whale-watching on Canada’s west coast to explore the role of macro-cultural discourse and local actors in the structuration of new institutional fields. We argue that the development of the commercial whale-watching industry in the area was made possible by broad macrocultural changes in the conceptualization of whales in North America. At the same time, however, the characteristics of the geographically distinct institutional fields that emerged depended on local action and the processes of structuration that those actions supported. The constitution of specific new fields required interested actors to engage in the institutional innovation and isomorphism that produced the unique networks of relationships and sets of institutions that constituted those fields.
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The problem of the role of actors in institutional theory can be addressed in considering a model of institutional entrepreneurship. A sociological posing of this question defines institutional entrepreneurs as actors who have social skills, that is, the ability to motivate cooperation of other actors by providing them with common meanings and identities. The author argues that skill is applied differently across organizational fields that are forming, become stable, and are being transformed. To illustrate some of these principles, the author considers the example of the role of Jacques Delors in the framing of the Single Market Program of the European Union.
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We are delighted to introduce this special issue of Organization Studies ,t he purpose of which is to develop a deeper understanding of the concept of institutional entrepreneurship and to offer new avenues for future research. This concept has been attracting considerable attention in recent years, as was reflected in the record number of papers that were submitted ‐ the largest number that this journal has received for any of its special issues to date. As a result, the selection process has been stringent and we are very pleased to present the eight articles in this special issue, all of which survived the demanding review process. Each of these articles contributes important insights to our understanding of institutional entrepreneurship and, collectively, they provide an important benchmark for subsequent research on this phenomenon. In different ways, they explore how actors shape emerging institutions and transform existing ones despite the complexities and path dependences that are involved. In doing so, they shed considerable light on how institutional entrepreneurship processes shape ‐ or fail to shape ‐ the world in which we live and work The term institutional entrepreneurship refers to the ‘activities of actors who have an interest in particular institutional arrangements and who leverage resources to create new institutions or to transform existing ones’ (Maguire, Hardy and Lawrence, 2004: 657). The term is most closely associated with DiMaggio (1988: 14), who argued that ‘new institutions arise when organized actors with sufficient resources see in them an opportunity to realize interests that they value highly’. These actors ‐ institutional entrepreneurs ‐ ‘create a whole new system of meaning that ties the functioning of disparate sets of institutions together’ (Garud, Jain and Kumaraswamy, 2002). Institutional entrepreneurship is therefore a concept that reintroduces agency, interests and power into institutional analyses of organizations. It thus offers promise to researchers seeking to bridge what have come to be called the ‘old’ and ‘new’ institutionalisms in organizational analysis (Powell and DiMaggio, 1991; Greenwood and Hinings, 1996). We preface these papers with some of our own observations on institutional entrepreneurship stemming from its paradoxical nature. Research on institutions has tended to emphasize how organizational processes are shaped by institutional forces that reinforce continuity and reward conformity. In contrast, the literature on entrepreneurship tends to emphasize how organizational processes
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Abstract The creative destruction of existing industries as a consequence of discontinuous technological change is a central theme in the literature on industrial innovation and technological development. Established competence-based and market-based explanations of this phenomenon argue that incumbents are only seriously challenged by ‘competence-destroying’ and ‘disruptive’ innovations, respectively, that make their existing knowledge base and business models obsolete and leave them vulnerable to attacks from new entrants. This paper challenges these arguments. With detailed empirical analyses of the car industry and the gas turbine industry, we demonstrate that they overestimate the ability of new entrants to destroy and disrupt established industries and underestimate the capacity of incumbents to perceive the potential of new technologies and integrate them with existing capabilities. Moreover, we show how intense competition in the wake of technological discontinuities, driven entirely by incumbents, may instead result in late industry shakeouts. We develop and extend the notion of ‘creative accumulation’ as a way of conceptualizing the innovating capacity of the incumbents that appear to master such turbulence. Specifically, we argue that creative accumulation requires firms to handle a triple challenge of simultaneously (a) fine-tuning and evolving existing technologies at a rapid pace, (b) acquiring and developing new technologies and resources and (c) integrating novel and existing knowledge into superior products and solutions. Key words: creative accumulation, technological discontinuity, creative destruction, disruptive innovation, competence-destroying innovation, electric vehicles, gas turbines
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Field performance is reported on PV modules made using BP Solar's new high efficiency buried contact Saturn solar cells. An 11% increase in module performance is achieved by a combination of higher efficiency cells and a larger active area in the standard module frame. The production cell efficiency has been increased through improvements to the formation of the rear cell contact that enhances the cell back surface field (BSF) resulting in a 7% gain in energy conversion through better collection of the long wavelength region of the solar spectrum. Improved module assembly techniques have been used in the new product with the most notable being the incorporation of low-profile diodes into the laminated assembly. The results of extensive accelerated environmental testing of the new product are reported. 1 INTRODUCTION • A silicon nitride antireflection coating • An aluminium back surface field (BSF) In 1984 Martin Green and Stuart Wenham [1] invented the laser grooved buried contact (LGBC) solar cell. The laboratory results for these cells were promising [2] but a low-cost fabrication process was required to exploit the technology. BP Solar licenced this technology from the University of New South Wales in 1985. Following a development phase of the technology in Sydney, Australia (1986-9), a 100 kWp output pilot line facility was established at BP Solar's cell manufacturing plant in Alcobendas (Madrid). During this period (1990-91) the technology was demonstrated and showed that the process could be operated at high yield and low cost. Since the first commercial cells were fabricated in 1992, the volume production has been increased annually [3]. In the year 2003 a further expansion of this technology led to the construction of a new manufacturing facility in Tres Cantos (Madrid). More than 80 MWp of Saturn buried contact cell product has been manufactured to date.
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This paper focuses on patterns of technological change and on the impact of technological breakthroughs on environmental conditions. Using data from the minicomputer, cement, and airline industries from their births through 1980, we demonstrate that technology evolves through periods of incremental change punctuated by technological break-throughs that either enhance or destroy the competence of firms in an industry. These breakthroughs, or technological discontinuities, significantly increase both environmental uncertainty and munificence. The study shows that while competence-destroying discontinuities are initiated by new firms and are associated with increased environmental turbulence, competence-enhancing discontinuities are initiated by existing firms and are associated with decreased environmental turbulence. These effects decrease over successive discontinuities. Those firms that initiate major technological changes grow more rapidly than other firms.
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Institutional theory is an increasingly utilized theoretical lens for entrepreneurship research. However, while institutional theory has proven highly useful, its use has reached a point that there is a need to establish a clearer understanding of its wide-ranging application to entrepreneurship research. Therefore, we will initially review the existing entrepreneurship literature that employs institutional theory to both understand the current status of the field, its current shortcomings, and where we need to move in the future. We then summarize and discuss the articles in this special issue and how they contribute to this process of advancing institutional theory and its application in entrepreneurship research.
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The role governments play in new industry creation in developed, capitalist countries is examined.For purposes of this analysis, governments are considered as a group of decision makers who hold power for a limited tenure.To begin, discussion of two alternate national institutional structures, associational and corporatist, and two different approaches to technology entrepreneurship, the bricolage and breakthrough approaches, are reviewed. Then the four types of national political institutional structures considered in this analysis are presented.These are social corporatist, state corporatist, liberal pluralist, and state nation.Attempts by state corporatist and liberal pluralist governments to design and implement policies to support industry emergence without considering political institutional structures can result in detrimental consequences. Further, governments in social corporatist countries do not have the political structures in place to intervene directly in industry emergence even if they had such a desire.State nations, which lie at the far end of the spectrum, provide the government autonomy in industry creation as they are able to act as policy makers, strategists, and entrepreneurs all at the same time.In order for a government to aid in new industry creation, their strategies must match their own institutional structures.Those in governmental positions must learn to recognize the potential and limits of their own country. (SRD)
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This paper explores how climate change affects multinational enterprises (MNEs), focusing on the challenges they face in overcoming liabilities and filling institutional voids related to the issue. Climate change is characterized by institutional failures, because there is neither an enforceable global agreement nor a market morality. Climate change is also a distinctive international business issue, as its institutional failures materialize differently in different countries. As governments are still highly involved, MNEs need to consider carefully their strategies to cope with non-market forces, including their embeddedness in multiple institutional settings. Using some illustrative examples of MNE responses to climate-related components in stimulus packages, we explore MNEs’ balancing act concerning their institutional embeddedness (or lack thereof) in home, host and supranational contexts as input for further research on the dynamics of MNE activities in relation to climate change.
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China is the second largest country in energy consumption. More and more energy demand pressures cause the Chinese government to review its economy and energy policies in order to support the sustainable development. In China, the building sector amounts to 27.8% total energy consumption, which is only behind the industry sector. China has abundant solar energy resource, which is extensively applied to buildings. Therefore, solar energy utilization in buildings has become one of the most important issues to help China optimize the energy proportion, increasing energy efficiency and protecting the environment. Solar energy resource and its district distribution in China are introduced in detail in this paper, and the representative solar energy application to the building sector is highlighted as well. The solar energy utilization obstacles, especially policy disadvantages in building sector in China, are reviewed. Moreover, the application prospects of solar energy in building sector are presented in combination with the China economic and household industry growth.
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To arrest climate change, a transition to a low-carbon economy must take place quite rapidly, within a century at most. Thus, the rate of diffusion of new technologies such as those for the generation of electricity from renewable energy sources becomes a central issue. This article explores the reasons for the particularly rapid spread of two such technologies in Germany, wind turbines and solar cells. We trace this diffusion to the nature of the policy instruments employed and to the political process which led to the adoption of these instruments. The analysis demonstrates how the regulatory framework is formed in a ‘battle over institutions’ where the German parliament, informed and supported by an advocacy coalition of growing strength, backed support policies for renewables sourced electricity against often reluctant governments and the opposition from nuclear and coal interests. It also demonstrates that this major political and environmental achievement carries a modest price if we consider total costs to society, i.e. including both subsidies to coal and the negative external economies of coal.
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Due to its environmental impact, the mobility system is increasingly under pressure. The challenges to cope with climate change, air quality, depleting fossil resources imply the need for a transition of the current mobility system towards a more sustainable one. Expectations and visions have been identified as crucial in the guidance of such transitions, and more specifically of actor strategies. Still, it remained unclear why the actors involved in transition activities appear to change their strategies frequently and suddenly. The empirical analysis of the expectations and strategies of three actors in the field of hydrogen and fuel cell technology indicates that changing actor strategies can be explained by rather volatile expectations related to different levels. Our case studies of the strategies of two large car manufacturers and the German government demonstrate that the car manufacturers refer strongly to expectations about the future regime, while expectations related to the socio-technical landscape level appear to be crucial for the strategy of the German government.
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Low-emission vehicle (LEV) technologies have grown in the 1990s, but have since experienced fluctuating interest. Initially, electric vehicles (EVs) were the most promising technology. Most large car firms developed EVs and started bringing them to the market, in limited numbers. Yet, car firms halted their EV engagement around 2001 and focused on hybrid vehicles (HVs) and fuel-cell vehicles (FCVs) instead. Hybrids found their way into the product portfolios of most car manufacturers while FCVs failed to gain traction. In 2006, car firms again committed to EVs, and on a larger scale. To better understand recurring waves of firms’ low-emission-vehicle investments in the international context, this paper explores the influence of geographically-bound government policies on car firms’ innovation strategies. An analysis of archival data from 1997 to 2010 details LEV-specific developments per region/firm, and shows the complex interplay between policies on local, national and international levels and firms’ strategies. Three mechanisms seem to shape the international LEV trajectory: (1) international policy diffusion (vertically and horizontally), (2) firms’ international operations, (3) fit between policy requirements and firm capabilities. Heeding the call for a better geographical conceptualization of technological trajectories, this paper also proposes a framework that explains co-evolution between government policies and car manufacturers.
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Drawing on institutional theory emphasizing translation and discourse, we explore outsider-driven deinstitutionalization through a case study of the abandonment of widespread, taken-for-granted practices of DDT use between 1962 and 1972. Our findings illustrate how abandonment of practices results from "problematizations" that-through subsequent "translation"- change discourse in ways that undermine the institutional pillars supporting practices. This occurs through new "subject positions" from which actors speak and act in support of problematizations, and new bodies of knowledge, which normalize them. We introduce the concept of "defensive institutional work" and illustrate how actors carry out disruptive and defensive work by authoring texts.
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Solar photovoltaic (PV) power is a new and green energy source. China has significant opportunities for solar energy utilization with its huge solar resource. The solar PV power in China has developed for 50 years, and experienced a rapid progress in the last 10 years. To address the needs of the fast growth of the PV power industry in China, it is critical to identify, analyze and understand the growth path and the characteristics of the industry. This paper summarizes the status of the solar energy resources and the development of the solar PV power industry in China, and puts forward the main factors that impacted the development of the industry. A study refers to the selected five main factors the factors are: technology research and development, industrial plans, laws and regulations, electricity price policies, and projects incentive policies. A multifaceted approach including literature survey, statistical data investigation, law review, and regulation and policy study are adopted to investigate these factors. Analysis of the typical events, the growth process and the characteristics of the five factors, allows the establishment of growth route models. The results can be a useful reference for the development of solar PV power industry in China and other countries. (C) 2013 Published by Elsevier Ltd.
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This research aims to identify the institutional strategies of incumbent firms with regard to sustainable energy innovations that threaten their interests. This exploratory study contributes to the multi-level perspective by providing new insights into niche–regime interaction. The focus on actor behavior in transitions is informed by literature from institutional theory and strategic management. Based on semi-structured interviews with actors and on documents related to LED lighting and biofuels in the Netherlands, this study identified a preliminary set of empirical strategies: providing information and arguments to policy makers and the general public, as well as strategically setting technical standards. Incumbents are in a position to significantly influence the innovation's development by employing these strategies; thus temporarily keeping sustainable innovation on a leash. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment
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There has been an increasing interest in deploying renewable energy technologies as a means of supplying energy needs in a more sustainable manner. This paper describes the recent evolution of the market for solar photovoltaics (PVs) and discusses likely future developments. It provides an overview of the niche markets in which PVs are already competitive with other forms of electricity provision and assessment of the larger markets currently supported by governments, utilities and industry in the expectation that they will become competitive in the future. The paper briefly addresses remaining barriers to the deployment of solar PVs and outlines the principal policy mechanisms being used to foster the development of both the technology and the markets in different countries. The evidence indicates that the PV industry may be on the verge of rapid expansion as economies-of-scale improve production economics, government programmes encourage deployment and more large-scale applications of the technology become viable.
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In diversifying energy supply, the transformation of the energy industry has been identified as a key challenge for a sustainable energy future. This suggests that incumbent firms in this industry have a vital role in the development and commercialization process of renewable energy technologies. This paper provides a comparative analysis of oil and gas firms’ strategies regarding solar PV technology investments, a renewable energy technology that has seen explosive growth of late. The main aim is to examine the strategic approach of incumbent firms in the oil and gas industry towards the development and commercialization of solar PV technology. To investigate this, a multiple case study has been conducted within the European oil industry, focusing on the three largest oil and gas firms: BP, Royal Dutch/Shell, and Total. Findings show that oil and gas firms have difficulties with integrating solar PV technology in their supply chain. The analysis suggests that it is uncertain whether all oil and gas firms will abandon solar completely, as this depends to what extent they are able to generate profits. Nevertheless, there is currently a trend in the oil industry of leaving solar and positioning towards a ‘recarbonization’ of business activities.
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Deinstitutionalization refers here to thc erosion or discontinuity of an institutionalized organizational activity or practice. This paper identifies a set of organizational and environmental factors that are hypothesized to determine the likelihood that institutionalized organizational behaviours will be vulnerable to erosion or rejection over time. Contrary to the emphasis in institutional theory on the cultural persistence and endurance of institutionalized organizational behaviours, it is suggested that, under a variety of conditions, these behaviours will be highly susceptible to dissipation, rejection or replacement.
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This paper examines institutional entrepreneurship in the development of China's environmental protection system (EPS) over a period of almost 30 years. China's EPS evolved in four main stages, the boundaries of which were marked by transition-critical events. Within each stage, institutional entrepreneurs conducted activities that supported trajectories of field development. These activities are analysed according to the way they contributed to the construction of regulative, normative and cognitive institutional system pillars. The formation of the EPS as an organizational field in China was characterized by a 'made order' in which the regulative system came first and the state and its agencies dominated the process as the principal institutional entrepreneurs. In this respect it contrasts with the evolution of the same field in the USA.
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[Excerpt] Our primary aims in this effort are twofold: to clarify the independent theoretical contributions of institutional theory to analyses of organizations, and to develop this theoretical perspective further in order to enhance its use in empirical research. There is also a more general, more ambitious objective here, and that is to build a bridge between two distinct models of social actor that underlie most organizational analyses, which we refer to as a rational actor model and an institutional model. The former is premised on the assumption that individuals are constantly engaged in calculations of the costs and benefits of different action choices, and that behavior reflects such utility-maximizing calculations. In the latter model, by contrast, 'oversocialized' individuals are assumed to accept and follow social norms unquestioningly, without any real reflection or behavioral resistance based on their own particular, personal interests. We suggest that these two general models should be treated not as oppositional but rather as representing two ends of a continuum of decision-making processes and behaviors. Thus, a key problem for theory and research is to specify the conditions under which behavior is more likely to resemble one end of this continuum or the other. In short, what is needed are theories of when rationality is likely to be more or less bounded. A developed conception of institutionalization processes provides a useful point of departure for exploring this issue.
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In this article I describe and compare ct number of alternative generic strategies for the analysis of process data, looking at the consequences of these strategies for emerging theories. I evaluate the strengths and weaknesses of the strategies in terms of their capacity to generate theory that is accurate, parsimonious, general, and useful and suggest that method and theory are inextricably intertwined, that multiple strategies are often advisable, and that no analysis strategy will produce theory without an uncodifiable creative leap, however small. Finally, I argue that there is room in the organizational research literature for more openness within the academic community toward a variety of forms of coupling between theory and data.
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In the automotive industry the need to move towards more sustainable trajectories of innovation has received much attention. Car manufacturers have started to develop loweremission alternatives for the internal combustion engine, particularly electric, hybrid and fuel-cell vehicles. They face the challenge, however, of how to make a potentially disruptive, systemic, and societally embedded technology such as a low-emission vehicle attractive to mainstream customers. While literature has suggested that companies can empower the initial stages of disruptive innovation by creating protected spaces themselves and/or by taking advantage of such spaces created by public actors, the specific role of these different types of protection levers – private and/or public – has remained unclear. This article therefore investigates to what extent and how private and public protection levers affect firm-level strategies to increase the attractiveness of disruptive and systemic innovations to mainstream customers. This is explored empirically through a multiple case study of the emergence of low-emission vehicles within three car manufacturers – Daimler, General Motors and Toyota – in the context of European, Japanese and US policies. The empirical analysis is conducted on a dataset consisting of more than 9,000 articles from two trade magazines, a car magazine and a financial newspaper for the period of 1997 to 2010. As main findings, the article identifies regulation, tax incentives, and public-private partnerships as the public protection levers that impose or stimulate ‘new’ performance metrics such as fuel economy and vehicle emissions. It also finds that resource allocation, niche occupation and collaborationintegration act as the main private protection levers. Besides, two protection levers emerge from the data that are rather prominent in this context: the use of regulation imposing largescale commercialization of low-emission vehicles and dumping of products in the market below cost price. The article concludes with two different protection trajectories – a public protection trajectory and a private protection trajectory – which explain how car manufacturers leverage the various protection levers to deal with disruptive technology. The main implication of the two trajectories is that while the public protection trajectory stalled due to the systemic, socially embedded technological impediments of electric vehicles and fuel-cell vehicles, the private protection trajectory picked up the remains of the public protection trajectory and has gained momentum, continuing until today.
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a b s t r a c t The multi-level perspective (MLP) is a widely adopted framework for analysing stability, change and transitions in socio-technical systems. Key to explanations of change is the interaction between nested levels (niche, regime, landscape) constituting socio-technical systems over time. This paper proposes a second generation, multi-scalar MLP that explicitly incorporates a spatial scale. Recent developments in innovation studies and contributions from regional studies and geography are reviewed. We draw on notions of space as being relational, fluid and contested by insti-tutionally situated actors. Dynamics in socio-technical systems are explained not only by interactions between modes of structura-tion and developments over time, but also by interactions between actors and institutions situated across different levels of spatial scale. The paper explores the kinds of insights that might emerge from adopting a second generation MLP to socio-technical systems with a case study of biomass gasification in India.
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This article discusses empirical findings and conceptual elaborations of the last 10 years in strategic niche management research (SNM). The SNM approach suggests that sustainable innovation journeys can be facilitated by creating technological niches, i.e. protected spaces that allow the experimentation with the co-evolution of technology, user practices, and regulatory structures. The assumption was that if such niches were constructed appropriately, they would act as building blocks for broader societal changes towards sustainable development. The article shows how concepts and ideas have evolved over time and new complexities were introduced. Research focused on the role of various niche-internal processes such as learning, networking, visioning and the relationship between local projects and global rule sets that guide actor behaviour. The empirical findings showed that the analysis of these niche-internal dimensions needed to be complemented with attention to niche external processes. In this respect, the multi-level perspective proved useful for contextualising SNM. This contextualisation led to modifications in claims about the dynamics of sustainable innovation journeys. Niches are to be perceived as crucial for bringing about regime shifts, but they cannot do this on their own. Linkages with ongoing external processes are also important. Although substantial insights have been gained, the SNM approach is still an unfinished research programme. We identify various promising research directions, as well as policy implications.
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The history of silicon terrestrial module evolution over the last 50 years is briefly reviewed. Key technical developments that occurred over a rapid evolutionary period between 1975 and 1985 are identified. Information is included on improvements in both the energy conversion efficiency and prices of commercial modules over the 50-year timeframe. Copyright © 2005 John Wiley & Sons, Ltd.
Article
Do laterally diversifying firms outlast new startups? Or does organizational inertia give the advantage to startups? We explore these questions here using the experiences of American automobile manufacturers from 1885 through 1981. We advance and test an integrative model that allows the organizational effects of entry mode to vary across the firm's life cycle. We also compare the life chances of laterally diversifying firms by industry of origin, including especially bicycle, carriage and engine manufacturers. Findings show the potentially integrative value of an evolutionary approach to strategy.
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We examine the fit between a firm's product market strategy and its business model. We develop a formal model in order to analyze the contingent effects of product market strategy and business model choices on firm performance. We investigate a unique, manually collected dataset, and find that novelty-centered business models—coupled with product market strategies that emphasize differentiation, cost leadership, or early market entry—can enhance firm performance. Our data suggest that business model and product market strategy are complements, not substitutes. Copyright © 2007 John Wiley & Sons, Ltd.
Article
The objective of this paper is to suggest a methodology that will help us to determine if the present rate and direction of technological change is compatible with the development of a sustainable society. We combine two perspectives on technology assessment. The first focuses on current techno-economic trends and the second on long-term resource and environmental constraints to the diffusion of a new technology. We apply our approach to the case of solar cells. Based on an analysis of technology, actor and market dynamics we suggest that thin-film solar cells are about to dominate the industry. Within the thin-film family, there is competition between alternative designs. The diffusion of three of these will, however, be limited by resource, and perhaps emission, constraints. One design (a-Si) fares much better in terms of these constraints but is less efficient. Three policy issues are identified. First, the diffusion of solar cells is not yet self-sustained and further policy intervention is required. Second, the problems of the current thin-film designs suggest that there is a need for policies both to sustain variety and to balance that requirement with the short-term requirement of cost reduction. Third, policy must ensure that a diffusion of solar cells containing scarce metals does not lead to an erosion of environmental constraints.
Article
Bulk crystalline silicon solar cells have been the workhorse of the photovoltaic industry over the past decades. Recent major investments in new manufacturing facilities for monocrystalline and multicrystalline wafer-based cells, as well as for closely related silicon ribbon and sheet approaches, ensure this role will continue well into the future. Such investments suggest that the silicon wafer-based approach has successfully withstood the challenge mounted by thin-film chalcogenide-based cells, in the form of polycrystalline films of CdTe and CuInSe2, as well as that mounted by thin-film cells based on amorphous silicon and its alloys with germanium. The encumbent now faces a fresh challenge by a new wave of thin-film technologies developed in the 1990s, more closely related to the bulk approach and with some advantages over the earlier contenders. One new approach is based on a stack of two silicon thin-film cells, one cell using amorphous silicon and the other mixed-phase microcrystalline silicon. The second uses silicon thin-films in polycrystalline form deposited onto glass, even more directly capturing the strengths of the wafer-based approach.
Article
Renewable electricity development has taken different paths across countries, underpinned by different policy frameworks. Although there has been a convergence to two main mechanisms, the feed-in tariff (FIT) and the renewable portfolio standard (RPS), much debate remains focused on the effectiveness of each for meeting multiple objectives, especially energy security, CO2 reduction and economic development. Although most countries share these objectives, their choice of policy varies, explained largely by national context. Denmark, Germany and the United Kingdom stand out as lead countries based on their experiences with the FIT and RPS and provide important lessons for other nations. The evidence from these three, as examined in this paper, suggests that policy design and commitment are key factors for success. Denmark and Germany have 10 years of experience with FITs and are world leaders in the field of renewable energy (RE) development. They are closest to meeting their RE targets and have been able to achieve several other objectives, especially industrial development and job creation, and in the case of Germany, CO2 emission reductions. Although other factors have been important in determining policy choice and implementation in these countries, the particular design features of the FIT allow it to address the needs of the sector.
Article
Why some firms die while others survive? Survival has long been recognized as a basic goal for a manufacturing firm. At least in the long term, survival should be related to various measures of performance, such as market share and profitability. Advocates of population ecology have argued that life chances of organizations are affected by population density at the time of founding. According to this argument, organizations founded during periods of intense competition will have persistently higher age-specific rates of mortality than those founded during periods with lower numbers of competitors. At least for the case of manufacturing firms, there may be more profound causes than competitive turmoil that explain a firm's survival chances. These have to do with the evolution of technology in an industry. Population density may only be a reflection of underlying driving forces based on technological change that determine the form and level of competition, the attractiveness of entry, and ultimately the structure of an industry.
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Energy policies may lead to important industrial outcomes. This paper investigates the impacts of energy policies on industry growth in renewable energy. Research tools employed include the commercialization process, value chain analysis, and empirical case studies. Different renewable energy technologies and geographical regions are considered covering over 50% of the world markets of the technology fields considered. Market deployment measures that enhance home markets of domestic industries will in most cases lead to growing industrial activities. Irrespective of the domestic market situation, pure investment or R&D support alone to already strong industries in related fields may be powerful to help with diversification into sustainable energy business. Several exogenous factors such as timing, size factors, geography, etc. will influence both the industrial and policy positioning in practice. The results indicate that there are increased industrial opportunities in renewable energy to be captured not only by large countries or through large public resources, but also smaller countries can gain success through clever policies and optimal managing of the commercialization process.
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Capitalism, Socialism and Democracy remains one of the greatest works of social theory written in the twentieth Century. Schumpeter's contention that the seeds of capitalism's decline were internal, and his equal and opposite hostility to centralist socialism have perplexed, engaged and infuriated readers since the book's first publication in 1943. By refusing to become an advocate for either position, Schumpeter was able both to make his own great and original contribution and to clear the way for a more balanced consideration of the most important social movements of his and our time.