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Eco-innovation for enabling resource efficiency and green growth 367 number of complementary changes have functioned as key drivers for these developments. In many of the examples, the changes have been either organisational or institutional in nature, such as the establishment of separate environmental divisions for improving environmental performance and directing R&D, or the setting up of inter-sectoral or multi-stakeholder collaborative research networks. Some industry players have also started exploring more systemic eco-innovation through new business models and alternative modes of provision. The heart of an eco-innovation cannot necessarily be represented adequately by a single set of target and mechanism characteristics. Instead, eco-innovation seems best examined and developed using an array of characteristics ranging from modifications to creations across products, processes, organisations and institutions. The characteristics of a particular eco-innovation furthermore depend on the observer’s perspective. The analytical framework can be considered a first step towards more systematic analysis of eco-innovation. 5 5 Guiding towards systemic changes The above framework of eco-innovation implies diverse approaches to help realise resource efficiency and green growth through accelerating innovation, including both technological and non-technological changes. The approaches can be roughly categorised into incremental innovation and systemic (or radical) innovation. Incremental innovation primarily contributes to the relative decoupling of environmental impacts from economic growth, while the latter tends to have larger potential for helping to make absolute decoupling possible. Facing the great challenges of climate change and environmental degradation, it has to be clear to government and industry alike that incremental improvement is not enough to fulfil their long-term commitment. Deliberate policy interventions could bring a new opportunity to create new entrepreneurs, industries and jobs, but existing industries must be restructured and existing and breakthrough technologies must be more innovatively applied to secure long-term competitiveness and economic growth. In parallel to investing in easy short-term win-wins such as subsidising eco-friendly vehicles, today’s economic stimulus packages could also stimulate investments in technologies and infrastructures that help innovation and enable changes in the way we produce and consume goods and services in the long term. Clear benefits of more systemic innovation have been well exemplified in the areas of general-purpose technologies. While the information and communication technologies (ICTs) urgently need to raise energy efficiency in existing products which are responsible for around 2% of global GHG emissions, one estimate indicates that the transformation of the way people live and businesses operate through the smart application of ICTs could reduce global emissions by 15% by 2015 (The Climate Group 2008). Biotechnology and nanotechnology could create environmental benefits mainly through the unique application in different sectors or 5 A combination of this eco-innovation framework with the frameworks of system transition developed by some scholars (e.g. Geels 2005; Loorbach 2007; Carrillo-Hermosilla et al. 2009; Bleischwitz 2007) could further help understand the dynamic nature of radical changes created by eco-innovations.
368 T. Machiba Table 2 Application of technologies in different types of innovation Incremental innovation Systemic innovation Existing (but improved) technologies in existing application Existing technologies in new application New technologies in existing application New technologies in new application the convergence with existing technologies. Table 2 highlights the basic distinction (though there is not clear line) between incremental and systemic eco-innovation based on the way which existing or new, breakthrough technologies are applied. Figure 5 provides the other way to highlight the distinction based on the evolution of manufacturing processes and products and services towards sustainable production which was explored in Section 3. Needless to say, there are many barriers to enabling systemic innovation. Policy makers and industry are increasingly facing difficulties in investing in long-term future due to short political cycles and pressure from shareholders. Sector or technology-based approaches in conventional environmental policies may fail to take into account the full innovation cycle of environmental technologies and undermine opportunities for cross-sectoral application of new technologies. The market-based “getting prices right” measures such as carbon taxes and emissions trading schemes may not be enough to guide investment in promising technologies with high initial cost and much-needed green infrastructures. 6 Conclusions: agenda for the future eco-innovation analysis In order to meet great environmental challenges such as climate change, much attention has been paid to innovation as a way to develop sustainable solutions. The concepts of eco-innovation are increasingly adopted by industry and policy makers as a way to facilitate more radical improvement in production processes and Fig. 5 Conceptual distinction between incremental and systemic eco-innovations
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