Drivers of environmental innovation - Vinnova

characterised by genuine uncertainty and continuous disequilibria. According
to this perspective, the innovating agent does not have complete information or
knowledge about, for example, available technological solutions or future
technological possibilities.
Learning, rather than decision making about resources allocation based on
complete information, is the basis of innovation processes (Lundvall, in Kuusi
(ed) 1996). Learning processes as a rule are chronologically long lasting.
Therefore, the study of innovations must have an explicit historic perspective in
order to deal with the dynamics of innovations. A strong emphasis is also
placed on the fact that learning takes place in interactions between firms and
other agents. Complementary knowledge is acquired through mutual learning
processes. Networks of actors built on long-term, trusting relations are of great
importance. Innovative firms are characterised, among other things,by the way
that they competently manage their external relations. This is one of the reasons
why a systems view on innovation is necessary.
The innovation systems perspective also places strong emphasis on institutions,
that is organisations as well as regulations, norms and habits. Institutions play a
major role in determining how people relate to each other and, therefore, they
determine how people interact and learn. As many institutions are not firm
specific, this provides another reason why a systems view is necessary.
A strength of the innovation systems perspective is its ambition of using a
holistic, integrative systems approach. However, a weakness is that there is still
a strong need for a more systematic theoretical basis. Traditional economics
may be said to be at times overly reductionist and prone to make far-reaching
simplifying assumptions in orderfor its model to be used. On the other hand,
this does mean that traditional economics and developments are based on
stringent theory, and are able to develop elaborate quantitative statistical
models.
The study of innovations is thus multidisciplinary, including traditional
economists and innovation systems researchers. The latter group in turn is
composed of business academics, economic historians, sociologists and other
disciplines. Major theoretical insights and antecedents can be found in the
theories of evolutionary economics and of interactive learning.
The role of government in theory
With respect to government action there are also different approaches
depending on which theoretical framework is employed. Classical economics
identifies market failures relating to, for example, the lack of information or the
costs to society not being reflected in market prices, and gives government a
role in compensating for these failures.
The innovation systems approach provides a theoretical legitimisation of
government action. The system failure rationale focuses on actors in a system
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