Inter-sectoral relations to accelerate the formation of technological innovation systems

ABSTRACT

Decarbonizing the energy system requires new technologies, whose formation and diffusion needs the attraction of actors from different sectors to compose the value chain. Sectoral interactions are crucial and dependent on contextual and technological factors, as well as firm-specific characteristics. This paper examines the determinants of firm diversification towards a new technology and their role in sectoral interactions. We combine concepts from technological innovation systems (TIS), sectoral innovation systems and organization studies to examine the drivers of actors' entry as well as their impact on systems’ formation, through the effect on inter-sectoral relations associated with technological variety and relatedness. The development and demonstration of marine renewable energy technologies (MRET) in Portugal over the past two decades provides the empirical case. A database of 237 companies includes responses from a survey of a large part of the actors involved in MRET and potential entrants. A standard binary logit model estimates the effect of a set of drivers of firms' entry in MRET. Firms are more driven by variety-led factors and technology maturity, than by their technological capacity and sectoral proximity. We derive implications for policy and theory, namely for the conceptualization of inter-sectoral relations in TIS.

Keywords: technological innovation systems, inter-sectoral relations, relatedness, firms, energy technologies.

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Bento N., Fontes M., Barbosa J. (n.d.), “Inter-sectoral relations to accelerate the formation of technological innovation systems: determinants of actors’ entry into marine renewable energy technologies”, Technological Forecasting & Social Changes (accepted).

The geographic trajectory of wave energy technology in the formative phase

Margarida Fontes, Hélder Santos, Teresa Sá Marques

ABSTRACT

A sustainable energy transition is fundamental to combat climate change (IPCC, 2018). The energy system has already undergone a profound transformation, driven by a first generation of clean, renewable energy technologies (Mitchell, 2016). But other technologies are currently under development that propose to address some of the new challenges generated along this process (Markard, 2018), or to explore other, still underexploited, energy sources that can further contribute to the decarbonisation of the energy system. The objective of this paper is to investigate the spatial dimension of the emergence and early development of one such technology, wave energy (ETIP Ocean, 2020), in order to gain new knowledge that permits to accelerate its development and enable places to capture its economic and social benefits (Andersson et al., 2018).

Combining sustainability transitions and innovation geography theories, the paper extends recent conceptualizations of the formative phase of technology development that enable a better understanding of its systemic nature (Markard, 2020), to better encompass the spatial dimension (Binz et al, 2020). Accordingly, the research proposes that formative processes occur in a space that is built by places and their networks at different scales (Hansen and Coenen, 2015); and investigates how actors organise themselves in space, structuring particular configurations of networked places that generate more favourable environments for both technology and local development.

The paper conducts a pan-European analysis of how a new technology system is being spatially built around wave energy technologies. It draws on information from the R&D projects funded by the European Union. This permits to uncover the process of territorial grounding of the research and technology development activities conducted by the actors involved in the technology, and to gain some understanding of the spatial patterns of their interactions.

The results show some variety in the territorial configurations and their evolution trajectories. A typology of places was produced that reflect diverse place positioning towards the development of the technology in the formative phase. In particular, a number of “virtuous” configurations were identified, some of them showing high persistence and consolidating over time.

The research contributes to an understanding of how places are formed as part of the early technology emergence. This is relevant because such early processes can be determinant to shape subsequent development and, therefore, influence the odds that a given place captures the benefits of the technology, once it reaches the market.

Keywords: Wave Energy Technology; Formative Phase; Place Configurations; Multiscalar Networks; Geography of Sustainability Transitions

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Fontes, M., Santos, H. and Sá-Marques, T. (2021) The geographic trajectory of wave energy technology in the formative phase, Royal Geographic Society - IBG Annual International Conference, 31 August-3 September 2021

Intersectoral interaction spaces and the exploitation of new business opportunities

Cristina Sousa, Margarida Fontes and Juliana Barbosa

ABSTRACT

This paper tackles the transformative potential of new sustainable technologies, that is, the ways in which the development of these technologies can induce structural change by driving new activities in other sectors of the economy (Dolata, 2009). In particular, it discusses whether and how links established between technology producers and firms from existing sectors create conditions for combination of diverse knowledge, driving diversification processes with transformative effects.

For this, the paper draws on insights of several literature streams: sustainability transitions, namely the discussion on the transformative impacts of transitions (Andersen et al, 2020; Boschma et al, 2017) strategic management, for processes of corporate diversification (related and unrelated) (Helfat and Eisenhardt, 2004; Picone and Dagnino, 2015) and networks and knowledge creation and diffusion in particular debates on bridging knowledge bases and on the role of proximities (Lamperti et al, 2020; Stephan et al, 2017).

The paper starts from the notion that companies that belong to a certain sector share a knowledge base. Collaborations established in research and innovation projects, aiming at the development of the new technologies, facilitate contacts and knowledge sharing between sectors that may or may not be related at the outset, opening opportunities for cross-fertilization and recombination of knowledge (Arts and Veugelers, 2014; Janssen and Frenken, 2019; Stephan et al, 2019;). Therefore, collaborative projects create an intersectoral space of knowledge sharing and co-creation that spurs the emergence of novelty.

These spaces of intersectoral interaction can trigger corporate diversification processes, since they create new business opportunities related to the new technology that can be exploited (individually or jointly) by companies from a variety of sectors, established and new. This can lead to processes of change and contribute to the revitalization of traditional sectors.

This conceptual approach is applied to the case of the new marine renewable energy technologies in Portugal, which is a pioneer in this field (Fontes et al, 2016). The empirical research addresses the following question: to what extent the emergence of marine energy technologies mobilizes knowledge from different sectors and creates opportunities for corporate diversification?

The research starts by mapping and characterizing the “intersectoral interaction space” created by R&D and innovation projects. This analysis is based on secondary data from national and European publicly funded projects, involving Portuguese actors/companies, and is conducted using Social Network Analysis. The configuration of this space provides indications on particular areas in which conditions for knowledge combinations are likely to be more favourable.

In order to understand whether the opportunities thus created are being exploited, the analysis subsequently focuses on Portuguese companies identified as active in the marine energy technologies. This analysis is based on primary data on firms’ innovation activities and organizational changes, collected through a survey, as well as on secondary data (industrial databases, reports, websites, etc.). The objective is to understand whether these companies are engaged in activities that denote diversification processes associated with the new technologies.

The paper contributes to a better understanding of the mechanisms that enable established industries to engage with and benefit from the development of sustainable technologies, enabling a better understanding on how to steer sustainable transitions in the desired directions from an economic and social standpoint.

References

Andersen, A.D., Steen, M., Mäkitie, T., Hanson, J., Thune, T. M., Soppe, B. (2020). The role of inter-sectoral dynamics in sustainability transitions: A comment on the transitions research agenda. Environmental Innovation and Societal Transitions, 34, 348-351.

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Boschma, R., Coenen, L., Frenken, K., Truffer, B. (2017) Towards a theory of regional diversification: combining insights from evolutionary economic geography and transition studies. Regional Studies, 51: 31–45.

Dolata, U. (2009). Technological innovations and sectoral change: Transformative capacity, adaptability, patterns of change: An analytical framework. Research Policy, 38, 1066-1076.

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Picone, P.M., Dagnino, G. B. (2015). Revamping research on unrelated diversification strategy: perspectives, opportunities and challenges for future inquiry. Journal of Management & Governance, 20(3), 413–445.

Stephan, A., Bening, C.R., Schmidt, T.S., Schwarz, M., Hoffmann, V.H. (2019). The role of inter-sectoral knowledge spillovers in technological innovations: The case of lithium-ion batteries. Technological Forecasting and Social Change, 148, 119718

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Sousa, C., Fontes, M. and Barbosa, J. (2021) Intersectoral interaction spaces and the exploitation of new business opportunities: the case of marine energy technologies, 18th conference of the International Joseph A. Schumpeter Society, 8–10 July, Rome.