Environmental Engineering Reference
In-Depth Information
regulatory regimes changes the balance between industrialization and environment. This
chapter argues that strong national regulation can spur technological, organizational,
institutional and social innovation resulting in trade advantages that exceed shorter-term
gains from cost-cutting and trade expansion that would otherwise weaken environmental
protection, and it can result in better environmental quality than that kind of trade as
well. However, more than the 'greening' of industry is needed. Creative destruction in the
Schumpeterian sense is required (Schumpeter, 1939; 1962).
Innovation's key role in competitiveness and environment
Technological change is a general - and imprecise - term that encompasses invention,
innovation, di
rst com-
mercially successful application of a new technical idea. It should be distinguished from
invention, which is the development of a new technical idea, and from di
ff
usion and technology transfer. Technological innovation is the
fi
usion, which is
the subsequent widespread adoption of an innovation beyond those who developed it. 4
As industrial societies mature, the nature and patterns of innovation change
(Abernathy and Clark, 1985; Utterback, 1987). New technologies become old technolo-
gies. Many product lines (e.g. washing machines or lead batteries) become standardized
or increasingly 'rigid', and innovation, if there is any, becomes more di
ff
cult and incre-
mental rather than radical.
Using language that is familiar to traditional innovation scholars, an incremental inno-
vation involves a step-by-step co-evolutionary process of change, whereas radical inno-
vations are discontinuous and possibly involve the displacement of dominant
rms and
institutions, rather than evolutionary transformation (Moors, 2000; Luiten, 2001;
Ashford et al; 2002; Partidario, 2003). Christensen (1997) distinguishes the former as sus-
taining innovation and the latter as disrupting innovation, rather than 'radical'. He argues
that both sustaining and disrupting innovation can be incremental, moderate, or radical.
Unfortunately, the term 'radical' in the literature is used in these two di
fi
ff
erent ways and
is a source of confusion.
However, another issue is in need of clari
cation: sustaining or disrupting of what?
Christensen uses the term disrupting in the context of a customer base that values certain
product attributes, and whose changing desires can change the markets for technological
variants in products. The context in which we shall use the term pertains to the product -
and also other technological or system changes - from a technological, as well as a cus-
tomer-based desirability-of-attribute perspective. In this regard, our use of the term dis-
rupting is more in line with Chris Freeman's (1982) use of the term 'radical' or Nelson and
Winter's (1977) idea of shifting 'technological regimes' (see below). Since we take
Christensen's point that the term 'radical' should be reserved to describe the rate of
change rather its type, we shall generally avoid the term as a synonym for disrupting. But
more is needed. From a technological perspective, disrupting innovations can be intrinsic
or they can be architectural. The former is a dramatically di
fi
erent way of achieving func-
tionality, such as the transistor replacing the vacuum tube; the latter may combine tech-
nological ideas in a new artifact, such as the hybrid electric-internal combustion engine.
Christensen et al. (1998) stress the latter and focus on product technology. Utterback and
Acee (2005, pp. 15-16) observe that '[i]nnovations that broaden the market create new
room for
ff
rms to start' and '[t]he true importance of disruptive technology . . . is not that
it may displace established products. Rather, it is a powerful means for enlarging and
fi
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