Environment, Innovation, and Business Strategies

Environment, Innovation, and Business Strategies Ian Miles http:///les1.man.ac.uk/cric/Ian_Miles

The 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

The Bramble Bush 2 And 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

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

Clean and Cleaner: Technology for Sustainability GOOD HOUSEKEEPING CLEAN-UP / END OF PIPE CLEANER / PROCESS IMPROVEMENT INTEGRATED SOLUTIONS

Clean and Cleaner: GOOD HOUSEKEEPING CLEAN-UP / END OF PIPE CLEANER / Proc. Imp. INTEGRATED SOLUTIONS 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

Environmental 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 ;

Environmental Concerns 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

Environmental Concerns 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

Environment as Externality, as Commodity POLLUTION OF: air land water organisms POLLUTION BY: gases liquids particulates chemicals heat radiation noise DEPLETION OF: raw materials arable land energy resources biological resources nature/wilderness Environment NOT regarded as value in itself CONSEQUENCES: local and global problems impacting biosphere, ecosystems, human welfare, economies

Some key concepts for analysis of clean(er) technology are TECHNOLOGICAL : INNOVATIONS TRAJECTORIES REGIMES REVOLUTIONS Innovation Research Innovation studies are Not greatly connected yet with new environmental economics; nor into related policy discourse e.g. on eco-taxes

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?

Drivers for Clean(er) Technological Choices PRESSURES: 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)

Prospects for Clean(er) Technologies INNOVATIVE SUPPLY: Technological opportunities Market and social demand Appropiability Source: Rene Kemp et al INNOVATIVE DIFFUSION: Price and quality of products Knowledge & information Risk and uncertainty

But are incremental changes enough - even lots of them? Creating a new trajectory? Will enough practice accumulate to form new routines? New generic technologies?

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

Technological Regime Technological Trajectories Selection Environment: Demand, Regulations, Institutions R&D Decisions Individual firm: accumulated knowledge, corridor, path dependent

How is change in Technological Regime toward Cleaner Technologies happening - if it is? How can it be further facilitated?

“ Clean” Technology One-off, discrete changes versus continual change along trajectory Responses to specific pressures rather than embodiments of new criteria R&D following established lines and methods rather than being substantially reoriented

Lamp Posts and Keys 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. ?

Changing Technological Regimes Change organisational structures of R&D Change methods and practices of R&D Change Knowledge Base used in Product and Process Development

Industrial Evolution OSTRICHES CHICKEN LICKENS PALE GREEN HORNETS BRIGHT GREEN HORNETS ROBIN HOODS GREEN GIANTS

Industrial Evolution 1 OSTRICHES CHICKEN LICKENS PALE GREEN HORNETS BRIGHT GREEN HORNETS ROBIN HOODS GREEN GIANTS Hostile to environmental concerns, activists Keen to argue, contest Declines to take action (might be “scientificaly correct”, but at odds with public/regulatory perceptions)

Industrial Evolution 2 OSTRICHES CHICKEN LICKENS Reactive, regulatory response (sometimes, market-driven response) resulting in minor technical changes; environment seen as threatening, compliance dominates

Industrial Evolution 3 OSTRICHES CHICKEN LICKENS PALE GREEN HORNETS Reactive, but environment seen as offering some opportunities, not just as a cost. Compliance dominates, but more foresight involved.

Industrial Evolution 4 OSTRICHES CHICKEN LICKENS PALE GREEN HORNETS BRIGHT GREEN HORNETS More attention to underlying technologies, seeing these as providing competitive opportunities.

Industrial Evolution 5 OSTRICHES CHICKEN LICKENS PALE GREEN HORNETS BRIGHT GREEN HORNETS ROBIN HOODS New technological directions actively sought, seen as providing radical alternatives to existing product lines, possibly completely new businesses.

Industrial Evolution 6 OSTRICHES CHICKEN LICKENS PALE GREEN HORNETS BRIGHT GREEN HORNETS ROBIN HOODS GREEN GIANTS Cleaner 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).

Where 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.

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?

Environmental Management Much analysis of policies and views - case studies, surveys Innovations frequently mentioned… but... Little attention to R&D in EM guides Little theorisation of innovation processes

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

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 To internalise & meet regulatory and PROACTIVE environment goals. Should allocate env. Responsibility, specify flows of information (int. & ext.), offer guidelines on meeting goals

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 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

Environmental Audits Full Management Commitment Audit Team: Objectivity, Competence Defined & Systematic Procedures Documented & Written Reportage Quality Maintenance of Auditing System Active Implementation & Follow Up 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 Moves toward national & international auditing standards - e.g. BS7750 Courses running, curricula developed Software for decision support re compliance

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 Programmes to motivate staff, ensure understanding; performance evaluations; recognise & reward innovations; emphasise commitment, encourage action.

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 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

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 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

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 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

Changing Trajectories Changing Knowledge Base Changing Decision Criteria New Perceptions liable to follow, with environment moving from constraint to opportunity

… 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...

Environment, Innovation, and Business Strategies

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Environment, Innovation, and Business Strategies