Environment, Innovation, and Business Strategies

PREST MSc Seminars, November 2001

PRESTCRIC

Environment, Innovation,

and Business Strategies

Environment, Innovation,

and Business Strategies

Ian Mileshttp:///les1.man.ac.uk/cric/Ian_Miles


PRESTCRIC

The Bramble Bush 1The Bramble Bush 1

There was a man in our town, and he was wonderous wise; he jumped into a bramble bush, and pricked out both his eyes!

Male

Urbanised

Scientific “wisdom”

Rash action

Raw nature

Blinded


PRESTCRIC

The Bramble Bush 2The Bramble Bush 2And when he saw what he had done, with all his might and main he jumped right in the bramble bush and scratched them on again!

Late and contradictory realisarion?

Much effort required

Resolve the problem by using the same tools


PRESTCRIC

Why Clean Technology? Pressure on

Resources (ecosystems more than exhaustion)

Pollution and Waste - health and QOL

Styles of Production Styles of

Consumption

Hard to change LEVELS of production, consumption

Scope for changing METHODS of production, consumption

New technologies in products and processes


PRESTCRIC Clean and Cleaner:Technology for Sustainability

GOOD HOUSEKEEPING

CLEAN-UP / END OF PIPE

CLEANER / PROCESS IMPROVEMENT

INTEGRATED SOLUTIONS

GOOD HOUSEKEEPING


CLEANER / PROCESS IMPROVEMENT



PRESTCRIC

Clean and Cleaner:GOOD HOUSEKEEPING


CLEANER / Proc. Imp.


Optimise existing process; adjust machines, rmaintain them; regulate use of materials

; ;

change use of raw materials, consumables

adjust process to reduce input requirements and/or discharges; recycle wastes

remove pollutants from discharge; clean and filter, washing systems; remove dust and grease


PRESTCRICEnvironmental Concerns

; ;

Very long historry of concerns about air and water quality - laws in UK 500 years ago; during industrialisation,

“traditional pressure groups” with interests in nature

conservation, wilderness, parks, access to country, etc



1960s

1970s

1980s

1990s

Pesticides, agrochemicals - SILENT SRING - pollution as widespread but local ecological hazard

UN Rio Conf 92 -> “Sustainable development”. Style of growth; biodiversity, habitats...

Acid rain; Chernobyl; 1985 Antarctic survey -> Ozone holes; Climate Change (IPCC 88); Green parties grow

Institutionalisation (EPA, DoE 1970) - UNCED Stockholm 1972); LIMITS TO GROWTH 1972; new pressure groups; but economic crises, oil shock, neoconservativism

Population explosion - GROWTH as problem

GLOBAL problems, associated with (numerous) specific practices, pollutants

GROWTH as problematic; splitting of green concerns

New problems recognised - BSE and other health threats; pseudoestrogens, etc - and much controversy



1960s

1970s

1980s

1990s 2000s...

; ;

Env concerns are VERY diverse, experienced differentially,

evolving

Patterns of emphasis and possible solutions are changing

Misleading to suggest that concern is merely product of

affluence


PRESTCRIC

Environment NOT regarded as value

in itself

Environment as Externality, as Commodity

POLLUTION OF:air

landwater

organisms POLLUTION BY:

gasesliquids

particulateschemicals

heatradiation

noise

DEPLETION OF:raw materials

arable landenergy resources

biological resourcesnature/wilderness

CONSEQUENCES:local and global problems

impacting biosphere, ecosystems, human welfare, economies


PRESTCRIC

Innovation studies are Not greatly connected yet with

new environmental economics; nor into related

policy discourse e.g. on eco-taxes

Some key concepts for analysis of clean(er) technology are TECHNOLOGICAL :

INNOVATIONS TRAJECTORIES

REGIMES REVOLUTIONS

Innovation Research


PRESTCRIC

Tech-Fix? Panacea?Only part of solution?Tech development not so easy to

shape - “technology paradigms” UNEVEN INFLUENCE from SPECIFIC actors: stocks of acquired knowledge drawn upon (inc. meta-

knowledge) inbuilt occupational structures, professional qualifications company accounting, reporting practices contexts of technology use: physical arrangements, supply

chains, regulations, infrastructures

…Substantial change is liable to involve

shift on many of these dimensions; considerable time to consolidate. Most innovations incremental within established paradigms.

Technological revolutions can induce paradigm shift. Can greening?


PRESTCRICDrivers for Clean(er)

Technological ChoicesPRESSURES: regulatory tax regimes consumer community other

stakeholders; management philosophies

Source: based on Alan Irwin & Paul Hooper, 1992, “Clean Technology, Successful Innovation & the greening of industry”

Business Strategy and The Environment

COMMERCIAL CALCULATION: improving production processes

saving materials saving energy

reducing costs for waste disposal/treatment new market opportunities (product & process)


PRESTCRICProspects for

Clean(er) TechnologiesINNOVATIVE SUPPLY:Technological

opportunitiesMarket and social demandAppropiability

Source: Rene Kemp et al

INNOVATIVE DIFFUSION: Price and quality of products

Knowledge & information Risk and uncertainty


PRESTCRICBut are incremental

changes enough - even lots of them?

Creating a new trajectory? Will enough practice

accumulate to form new routines?

New generic technologies?


PRESTCRIC

Change in Trajectory Innovations continue to improve in

specific performance features: this is a reinforcing feature

In this case, reduced use of resources, less pollution & waste

Less liable to be offset by change in demand and by subsequent innovations


PRESTCRIC Technological Regime

Technological

Trajectories

Selection Environment

: Demand, Regulations, InstitutionsR&D

DecisionsIndividual firm: accumulated knowledge, corridor, path dependent


PRESTCRIC• How is change in

Technological Regime toward Cleaner

Technologies happening - if it is?

How can it be further facilitated?


PRESTCRIC

“Clean” TechnologyOne-off, discrete changes versus

continual change along trajectoryResponses to specific pressures

rather than embodiments of new criteria

R&D following established lines and methods rather than being substantially reoriented


PRESTCRIC

Technological Development driven by regimes, paradigms

- even when solutions to problems sought, these may be developed

withi the perspective of such opportunities - thus IT, biotech, etc.

Lamp Posts and Keys


PRESTCRIC

Changing Technological RegimesChange

organisational structures of R&D

Change methods and

practices of R&D

• Change Knowledge Base used in Product and Process

Development


PRESTCRIC

OSTRICHESCHICKEN LICKENS

PALE GREEN HORNETS

BRIGHT GREEN HORNETS

ROBIN HOODSGREEN GIANTS

Industrial Evolution


PRESTCRIC


PALE GREEN HORNETS

BRIGHT GREEN HORNETSROBIN HOODS

GREEN GIANTS

Industrial Evolution 1Hostile to environmental

concerns, activists

Keen to argue, contest

Declines to take action

(might be “scientificaly correct”, but at odds with public/regulatory

perceptions)


PRESTCRIC


Industrial Evolution 2

Reactive, regulatory response (sometimes, market-driven response) resulting in minor

technical changes; environment seen as threatening, compliance dominates


PRESTCRIC


PALE GREEN HORNETS


Reactive, but environment seen as offering some opportunities, not just as a cost.

Compliance dominates, but more foresight involved.


PRESTCRIC


PALE GREEN HORNETS

BRIGHT GREEN HORNETS


More attention to underlying technologies, seeing these as providing competitive

opportunities.


PRESTCRIC


PALE GREEN HORNETS



New technological directions actively sought, seen as providing radical alternatives to

existing product lines, possibly completely new businesses.


PRESTCRIC


PALE GREEN HORNETS


GREEN GIANTS

Industrial Evolution 6Cleaner technological regimes promoted. Firms products challenge other product systems or industrial sectors, providing

similar final functionality but avoiding major processes causing environmental damage (e.g. nonCFC / CFC substitute refrigeration,

telecomms instead of business travel).


PRESTCRICWhere does the

impetus come from?Compliance still dominates.Litigation important, esp USA.In few sectors, new customer

concerns, markets. Saving costs - esp. energy.Technological opportunities -

esp. biotech and IT.


PRESTCRIC

Changing Technological Trajectories

Variety of Firm-specific procedures and routines - e.g. ban use of Hg, institute choice algorithms around mass, radiation, etc.

Contested applications of bioscience. Energy conservation, CHP, and clean

energy production systems very generic. “Social technology” - env. management?


PRESTCRIC

Environmental ManagementMuch analysis of policies and

views - case studies, surveysInnovations frequently

mentioned… but...Little attention to R&D in EM

guidesLittle theorisation of innovation

processes


PRESTCRIC Environmental Management: Programmatic Choices

Structure For Env Policy Mechanisms to review, monitor env perf. Incentives, controls to encourage env ach. Guidelines, tools for env investments Methods, tools for env decision-making Guidelines for comm. with stakeholders

source: Sandra Rothenberg, James Maxwell, Alfred Marcus 1992, “Issues in the Implementation of Proactive Environmental Strategies” Business Strategy & the Environment vol 1 pt 4



Structure For Env Policy

Mechanisms to review, monitor env perf.

Incentives, controls to encourage env ach.

Guidelines, tools for env investments

Methods, tools for env decision-making

Guidelines for comm. with stakeholders

To internalise & meet regulatory and

PROACTIVE environment goals. Should allocate env.

Responsibility, specify flows of

information (int. & ext.), offer

guidelines on meeting goals



Structure For Env Policy Mechanisms to review,

monitor env perf. Incentives, controls to

encourage env ach. Guidelines, tools for env

investments Methods, tools for env

decision-making Guidelines for comm. with

stakeholders

Close monitoring may well be required to avert potentially

severe consequences. Main methods are liab;le

to be direct reporting of env

activity, env auditing


PRESTCRIC

International Chamber of Commerce/ Environment Protection Agency list of

essential elements

source: A Zich, 1991, “Keeping Tabs on Risky Business” Tomorrow vol 1 no 2 pp 24-29

Environmental Audits Full Management CommitmentAudit Team: Objectivity,

CompetenceDefined & Systematic ProceduresDocumented & Written ReportageQuality Maintenance of Auditing

SystemActive Implementation & Follow Up

Moves toward national & international auditing

standards - e.g. BS7750

Courses running, curricula developed

Software for decision support re compliance







decision-making Guidelines for comm.

with stakeholders

Programmes to motivate staff,

ensure understanding;

performance evaluations;

recognise & reward innovations; emphasise

commitment, encourage action.





encourage env ach. Guidelines, tools for

env investments Methods, tools for env


with stakeholders

Traditional accounting methods

may even fail to identify short-term

financial paybacks, let alone long-term

savings and avoided costs; new tools for financial evaluation

may be needed






investments Methods, tools for

env decision-making Guidelines for comm.

with stakeholders

Tools to evaluate env impacts of decision

making about production and products ( & R&D!);

to record company activities & risks.

Guidance for employees, decision support for

managers confronting uncertainty








with stakeholders

To internalise & Aimed at gaining

external (and internal) support.

Methods may include participation in env debates and

fora, financial support of env

activities in communities, etc


PRESTCRIC

Changing TrajectoriesChanging Knowledge BaseChanging Decision CriteriaNew Perceptions liable to

follow, with environment moving from constraint to opportunity


PRESTCRIC

… and will it be enough? World population and economic

growth: how can everybody have decent living standards?

Can improving QOL be decoupled from increasing material consumption?

Oops! Politics...

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