Innovation and sustainability in economic development Rainer Walz - - PowerPoint PPT Presentation

“Innovation Systems and Development Strategies for the Third Millennium”

Innovation and sustainability in economic development

Rainer Walz Fraunhofer ISI Karlsruhe, Germany

Overview

• Interpretations of sustainability
• economic development and sustainability in the

North

• innovation strategies for sustainability
• role of innovations for sustainability in the South
• conclusions and outlook

Political and economic interpretation of sustainability

Economic development and social dimension Opportunity costs of conservation Sustainable development in politics Critical su- stainability in economics Ecological problems as bottleneck Essential (critical) resources

Environmental Kuznets Curve

phase 1 phase 2 phase 3 Environmental pressure GDP/capita

Environmental Kuznets Curve

• Mixed empirical results
• different factors influencing EKC

– behaviour and institutions – technological progress – structural change => systems of innovation

• conclusions

– EKC less valid for sustainability problems – no „natural“ effect, policies necessary to foster sustainability innovations

Innovation strategies for sustainability

Increasing complexity Environmentally acceptable technologies Closing material cycles Integration of product policy and product use End-

• f-

pipe Inte- grated

Implications of sustainability strategies

• Address fundamental strategic decisions of

companies => risks and chances

• High importance of lead markets and learning

processes

• Changing patterns of institutions and behaviour

=> co-evolution of subsystems

Time scale and geographic scale for societal responses

Three scenarios for the South?

• Tunneling through the Environmental

Kuznets Curve?

• lead markets for sustainability innovations?
• advantages in overcoming path

dependency?

Tunnelling through the Environmental Kuznets Curve?

phase 1 phase 2 phase 3 Environmental pressure GDP/capita safe limit tunnel

Tunnelling through the Environmental Kuznets Curve?

• Application of late comer advantage

concept

• Problems

– ECK might not exist in the North – Reallocation of „dirty‘‘ industries – Absorptive capacity, learning important

• Perpetuation of existing dependencies

Lead markets for sustainability in the South?

• Deficiencies with regard to typical lead

market demand conditions

• Very high problem driven pressure
• Natural requirements for technical

functioning ?

• Favourable policies and regulations?
• Understanding of system of sustainability

innovations necessary

Path dependencies

• Technological lock-in, e.g. in energy and

water industry

• political lock-in: power of losers prevail
• social lock-in: no co-evolution of social

system

Conclusions

• Technological progress and structural change are key for

reconciling economic development and sustainability => systems of innovation important

• different innovation strategies for sustainability with

increasing importance of learning effects and co-evolution

• f subsystem
• innovation system which first masters these complex tasks

gains competitive advantages

• policies necessary which lead to integration of

environmental and innovation policies

• no clear picture for the South: possible scenarios range

from perpetuating dependencies to gaining advantages

Research agenda

• Functioning of a system of sustainability innovations
• existing bottlenecks and potential policies for sustainability

lead markets in the south

• analysis of lock-in situations and comparison between

countries/regions/continents

• performance and importance of a system of sustainability

innovation in comparison to other factors

interpretations of sustainability

• Politics

– tension between short term economic development and long term needs – ecological sustainability as bottleneck for long term needs – specification of targets in conventions, declarations

• critical sustainability concept in economics

– preserve essential resources – not all environmental problems are sustainability problems – consider opportunity costs of conserving essential resources

• relationship between economic development and ecological

sustainability

Strategies for closing material loops

Use Production New materials R ecycled materials R aw materials Natural resources Product Component R euse Further use Maintenance R emanufacturing Upgrading Materials recycling E nergy recovery R e-Mining

R ecycling strategies

Disposal L and fill Ecological/economic quality large small

Winners and losers of sustainability innovations

• 100
• 50

50 100

plastic recycling

• sust. paper

life span extension Car-Sharing

change in 1.000

• services
• investment goods
• basic goods
• total