Determinants of Eco-Innovation: Environment performance outcome in Chinese firms
1University of Messina, Tsinghua University; 2University of Messina; 3University of Messina; 4Tsinghua University
In this paper we discuss about presence of eco-innovation in Chinese firms. Based on the literature we selected the activities that firms undertake and the external factors that influence them, and then using qualitative analysis we investigate how the presence of these factor(s) determine eco-innovation.
The definition of eco-innovation has evolved over time with the context and progress of work in this field. However, different editions of OSLO manual (OECD 2005) have been a benchmark for many authors to give their own relevant definitions.
Chinese firms have started to follow the path of systematic eco-innovation in recent years. However, in Chinese context, it remains largely unexplored paradigm. There has been few studies on trends of eco-innovation in China “…in the context of sustainable development and the construction of an ecological civilization, China’s overall level of eco- innovation among its various provinces exhibits an increasing trend” (Chen, Cheng, and Dai 2017). (Dong et al. 2014) talked about typology of eco-innovation and their influence on environment performance.
There has recent buzz about eco-innovation activities among Chinse firms but the academic literature has not covered up much mostly due to lack of company level data. We try to fill that gap by attempting to collect primary data and do initial analysis on eco-innovation among Chinese firms.
Among Chinese firms what factor(s) have the strongest influence on eco-innovation resulting in improved environment performance outcome?
We used qualitative comparative analysis (QCA) technique as our methodology and fsQCA package as software tool. In this research we used fuzzy set conditions of QCA methodology. Fuzzy sets approach provides us two advantages; firstly, it increases the scope of data in QCA by allowing to assign any score in the interval between 0-1. Secondly, it allows us to group data in smaller number of conditions utilizing all the relevance of it without sacrificing any data point.
The responses to the questionnaire we received came to us in different forms through online questionnaire and offline methods, which was further required to be arranged in order to fit our methodological procedure in QCA where we used fuzzy set for analysis. The activities that firms do are grouped and arranged as input conditions for the software and environment performance (eco-innovation) as our output condition.
In our data we have 60 different cases with varying degree of scores for each case. We arranged our data to assign them relevant fuzzy set scores in order to be tested in fsQCA software package.
Thus, after arranging all the data and calibrating it according to the fsQCA software tool we use six input conditions and one output condition that were selected based on prior literature.
We did a truth table analysis using the six input and one output condition in the fsQCA tool.
From the analysis of the truth table, firstly, we see that individual conditions have some degree of impact on outcome variable environment performance, however, we observe that many combinations of these factors affect the environment performance outcome. Hence, combination of conditions is more significant than individual conditions. Secondly, we see that despite combinations of conditions being important, environment policy instruments are clearly influencing the outcome more. The top down policy pyramid approach worked in China more than the market-based approach. Thirdly, we notice in particular that environment performance is not affected by absence of cooperation with different external partners.
The third finding is clearly linked to the second as the top down policy pyramid approach induces in-house R&D for eco-innovation under policy framework, which practically negates the requirement to have cooperation partners. Most internal actions relating to eco-innovation in studied firms are thus done under policy framework as a push effect.
Contribution to Scholarship
This paper aims to contribute to the study of eco-innovation in general and then eco-innovation in China. Moreover, in this research we use Qualitative Comparative Analysis and fuzzy set theory, which is a rather new methodology for this research. Also, here we used primary data collected using questionnaires and interviews, so the data is robust and can be further used with new methodology one we have larger data-set. Moreover, there is high relevance of the first hand Chinese primary data as it is quite difficult to obtain.
Contribution to Practice
The idea of eco-innovation in China has been gaining momentum recently. The result of this research aims to give first-hand idea of eco-innovation practices using all primary data in Chinese firms. This paper looks to contribute to a better understanding of the concept in Chinese context and help to build more research in same direction.
This paper deals with the idea of innovation in an emerging market, in particular ecological innovation in China. Hence, in this research we cover the study of emerging economy of China and innovation as mentioned in theme 'Emerging markets'.
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The diffusion of solar photovoltaic system in Bangalore: The concomitant actions of a company and its early adopters in bringing its rural developed solution into an urban context
i3-CRG, CNRS, Ecole polytechnique, Institut Polytechnique de Paris, France
The domestic users’ demand for electricity in Bangalore keeps increasing, and the public electricity supply service is not able to answer their need. To address a segment of this need, a pioneer company operating in rural context starts offering a solar photovoltaic system for power supply purpose in urban areas.
The research analyses the role of corporate entrepreneurs and lead users, in the process of an innovation, solar photovoltaic system, into an urban context. Rogers (1983) defines the diffusion of innovation as a process by which an innovation is communicated through certain channels overtime within a social system. The first customers that adapt an innovation is “lead users” (Hippel, 1986). Venkataraman (1997) defines the entrepreneurship as a scholarly field which consists in understanding how and by whom the opportunity to create future goods and services are discovered, evaluated, and exploited. Entrepreneurship research has been expanding its boundaries by exploring and predicting entrepreneurship phenomena such as innovation, new venture creation, individual entrepreneurs and entrepreneurial organizations (Antoncic & Hisrich, 2003). One of the research topics explored by entrepreneurship scholars is institutional entrepreneurship (Battilana et al., 2009).
Suddaby (2010) notes that not much work exists on how institutions operate through the influence and agency of individuals. In response to this inquiry, this paper introduces corporate entrepreneurship as a concept to discuss how the agency of individuals in the company interacts with local actors to develop its activity.
1. How does the company define the urban customers’ motives to pay for their alternative energy supply options?
2. What kind of active bodies and entrepreneurship culture are at work within this company and outside of it to explore this new off-grid energy supply market?
To understand the service development and the cultivation of this niche market by SELCO, an exploratory field study was conducted in Bangalore in June 2014, followed by interviews with managers of SELCO in 2019. We conducted interviews with project managers in charge of implementing the project at the end users’ level, and also with the general managers to have a better understanding of the business development. These continuous interactions led us to interact with their customers during few field visits. The interviews were generally conducted with a standardized questionnaire however open-ended questions were also mobilized to better understand the reality.
Two case studies (projects of SELCO) describe the solar panel installation projects for this new urban market. The two case studies consist of an educational institution and a restaurant for vegetarians.
The first case studied was a private school in Bangalore facing a grid electricity problem. It is a society-oriented school as the founding members worked for helping destitute women.
The project manager of SELCO identified the client through a network of environmental organizations for which he previously worked. In 2013, the client installed a PV system of SELCO to power a computer room in a new three-story building dedicated to children’s education, planned for the 100-year anniversary of the institution.
The second case studied was a restaurant, a restaurant for vegetarians opened on March 2014 attached with an activist centre for people who feel concerned by environmental issues.
In 2013, the owner of the restaurant was preparing to open her restaurant. Sensitive to environmental issues, she decided to install a solar power generating system as an alternative energy source for lighting and ventilation by fans. She came to know about the activity of SELCO through her own social network: one of her friends has a classmate in the company.
This case highlights the emergence of customers ready to change their energy consumption practices for environmental and financial reasons. These customers are ready to pay for private off-grid energy supply systems (like solar energy) and to use them as an alternative to their conventional energy supply system. They constitute a small niche of customers, marginal in numbers but significant in terms of purchasing power, and visible by their equipment level and their style of consumption. These customers are typical “lead users”.
We have identified a distinct type of entrepreneurship culture and approach in the two described cases. In SELCO, project managers of institutional team have taken the autonomy to discover new customers while the three members of project team have ability to adjust their service base on the client’s requirement.
The case study sheds the light on the role of corporate entrepreneurs trying to identify people’s lifestyle and mindset by interacting closely with local customers found by capillarity: these entrepreneurs mobilize their social connections to reach these customers. This situation does not necessarily emphasize the excellence of individuals in the organization. These teams simply apply the same approach that the company takes when it develops its service in rural area.
Contribution to Scholarship
The case studies highlight and characterise the emergence of a new form of experimentation in the innovation process in which the potential customers indirectly help the company to build its strategy for a new market. This diffusion process contrasts with the traditional and more linear model of innovation.
The case is characterized by the absence of an institution-building project beyond the company that initiated this innovative development project for the first time in an Indian city. But the local actors, the clients of SELCO, played a very distinct role in ensuring the continuity of the project through a common set of values shared with the company. Their strong adhesion to both the economic and the environmental benefits of the service would best equip them to strengthening the institutional building of the project.
Contribution to Practice
A corporate entrepreneur needs to harness both internal and external resources to develop a new service/product. By harnessing the potential of his/her social network, the case demonstrates that the corporate entrepreneur identifies a “counterpart-entrepreneur” i.e. an alter ego within the client organization. Together they are able to develop a new service/product. Beyond their ability to coordinate resources, the capacity of corporate entrepreneurs to connect with relevant communities and work with enlightened “counterpart-entrepreneurs” within these circles is an important skill to be considered by companies. Mobilizing these intangible external resources help companies to sense the aspiration of the customers.
This research deals with the diffusion of solar photovoltaic (recently commercialised decentralised energy source) in a context where the public electricity supply is not fully satisfying the users’ needs. This product/service initially developed for underserved rural area is finding a niche in an urban context, modifying energy consumption practices.
Antoncic, B., & Hisrich, R. D. (2003). Clarifying the intrapreneurship concept. Journal of small business and enterprise development 10 (1) (pp.7-24).
Battilana, J., Leca, B., & Boxenbaum, E. (2009). How actors change institutions: towards a theory of institutional entrepreneurship. Academy of Management annals, 3(1), 65-107.
Rogers, E. M. (1983). Diffusion of innovations. New York, Free Press.
Suddaby, R. (2010). Challenges for institutional theory. Journal of Management Inquiry 19 (1) (pp.14-20).
Venkataraman, S. (1997). The distinctive domain of entrepreneurship research. Advances in entrepreneurship, firm emergence and growth 3 (1) (pp. 119-138).
Von Hippel, E. (1986). Lead users: a source of novel product concepts. Management Science, 32 (7) (pp.791-805).
Fighting the (right) windmills? An extend view on business model innovation impediments for the energy transition
University of St.Gallen, Switzerland
Disruptive technological, societal, and political changes force energy companies to engage in business model innovation (BMI) (Richter, 2013) to maintain their competitive edge (Teece, 2010). However, extant BMI literature mostly focuses on agile service companies that share little with the heavily regulated and path-dependent energy industry, calling for additional research.
We follow Massa et al. (2017) in their conceptualization of business models as an attribute of the firm. Here, a business model consists of the firms' activities and their outcomes. BMI refers to reconfigurations of these activities to create and capture value for the firm’s stakeholders (Casadesus-Masanell & Zhu, 2013).
In the energy industry, recent research has shown that the creation of value through BMI is especially challenging, as utility companies fail to commercialize new technologies (Richter, 2013) and find themselves restricted by external boundaries in the form of policy frameworks (Burger & Luke, 2017). These policy frameworks are often much more rigid than those in the industries that utility companies take as inspiration for their BMI logic (Helms, 2016), resulting in a mismatch between the own setting and desired solution.
The mismatch between BMI logics from service industries and the particular needs of the energy sector create an opportunity for additional research. Our investigation creates much-needed innovation insights for utility companies and furthers BMI literature with a case of BMI mechanisms under uniquely restricted boundary conditions (Wirtz et al., 2016).
1. How does business model innovation function in the energy industry in light of its regulatory impediments?
2. How can business model innovation theory be adapted to accommodate areas of study with unique restrictions?
Given the explorative nature of the research question, we have chosen a qualitative approach and conducted an inductive qualitative survey of the Swiss and German energy industry. A qualitative approach captures diversity in a population (Jansen, 2010), which we found most suitable to account for as many manifestations of the phenomenon under investigation as possible. We conducted in-depth semi-structured interviews with executives of 15 companies from Germany and Switzerland. The interviews were transcribed and coded by independent researchers to ensure inter-coder validity. Results were triangulated with existing literature and complemented with follow-up interviews to clarify open questions.
In total, 16 interviews were conducted, resulting in 106-pages of primary data. Of the 16 interviews, 8 were conducted with established utility companies, 6 with utility start-ups, and 2 with new entrants to the utility sector that came from other sectors.
Our data implies four key insights that are new both to the general BMI literature and the energy sector:
1) Dependence on the shared and centrally managed physical infrastructure of the energy sector (the grid) prevents major BMI in the form of service-oriented and asset-light models.
2) Rather than limiting innovation in a universal manner across the entire sector, regulations stifle BMI in only some areas while leaving others free to innovate and try out new approaches.
3) The deregulation of some areas of the energy market has not resulted in major BMI, as the intertwined nature of the different parts of the sector create a state of dependency between agents in the deregulated parts and dominant players in the larger industry.
4) Despite their greater operational freedom, newly deregulated parts of the energy sector also feature relatively little BMI as they tend to be the less profitable parts of the sector and attract fewer investments from both incumbents and new entrants.
Contribution to Scholarship
This study contributes to BMI research by investigating the specific boundary case of BMI under regulatory restraints. Here, we highlight the interplay of external restrictions and their effect on firm-level innovation. Unlike existing studies that investigate innovation in deregulated energy sectors (e.g., Hall & Roelich, 2016), we present a specific case in which interdependence of regulated and deregulated parts of the energy sector prevent radical innovation on the firm level. Overcoming these may depend on new institutional arrangements.
Contribution to Practice
By uncovering how BMI functions in the partially regulated energy sector, we create a roadmap for utility companies that want to leverage innovation to sustain their competitive advantage.
Few sectors have a larger impact than the energy industry. We connect the BMI literature to the energy industry, which affects all of society. By positioning ourselves at this interface, we manage to make a theoretical contribution to the BMI literature as well as derive practical advice for industry players.
Burger, S. P., & Luke, M. (2017). Business models for distributed energy resources: A review and empirical analysis. Energy Policy, 109(July), 230–248. https://doi.org/10.1016/j.enpol.2017.07.007
Casadesus-Masanell, R., & Zhu, F. (2013). Business model innovation and competitive imitation: The case of sponsor-based business models. Strategic Management Journal, 34(4), 464–482. https://doi.org/10.1002/smj.2022
Hall, S., & Roelich, K. (2016). Business model innovation in electricity supply markets: The role of complex value in the United Kingdom. Energy Policy, 92, 286–298. https://doi.org/10.1016/j.enpol.2016.02.019
Helms, T. (2016). Asset transformation and the challenges to servitize a utility business model. Energy Policy, 91, 98–112. https://doi.org/10.1016/j.enpol.2015.12.046
Jansen, H. (2010). The logic of qualitative survey research and its position in the field of social research methods. Forum Qualitative Sozialforschung.
Massa, L., Tucci, C. L., & Afuah, A. (2017). A Critical Assessment of Business Model Research. Academy of Management Annals, 11(1), 73–104. https://doi.org/10.5465/annals.2014.0072
Richter, M. (2013). Business model innovation for sustainable energy: German utilities and renewable energy. Energy Policy, 62, 1226–1237. https://doi.org/10.1016/j.enpol.2013.05.038
Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2–3), 172–194. https://doi.org/10.1016/j.lrp.2009.07.003
Wirtz, B. W., Pistoia, A., Ullrich, S., & Göttel, V. (2016). Business Models: Origin, Development and Future Research Perspectives. Long Range Planning, 49(1), 36–54. https://doi.org/10.1016/j.lrp.2015.04.001
Building futures in contested industries: Studying the contribution of electronuclear scenarios in shaping nuclear-related political decisions
1IMT Atlantique, France; 2LEMNA; 3CNRS IN2P3, Subatech
As many other countries in the world, France is currently engaged in an energy transition process. The French situation constitutes an “extreme case” since nuclear power represents almost 75% of the electricity mix. This paper studies the role of electronuclear scenarios in shaping collective actions, discourses and nuclear-related decision-making processes.
Our paper draws on the STS literature and the organizational literature on forecasting, scenario planning, time and materiality. Regarding issues related to the energy and ecological transition, time is a crucial matter, and innovation and decision processes are affected by inter-temporal tensions (Slawinski and Bansal, 2012). Forecasting, planning and prospective tools or models become more prevalent for making and legitimizing decisions, whether technological or political (Nelson et al., 2008). Scenarios play a key role in "helping organizations develop the capability to anticipate uncertain futures" (Hodgkinson and Healey, 2008: 435) and in challenging decision-makers assumptions (op.cit.). With respect to controversial subjects such as nuclear, scenarios are key for the different actors in producing narratives and discourses and in advancing their respective agendas (Chateauraynaud, 2013). We propose to consider scenarios as boundary-objects (Star, 2010) and to study under which conditions they support collective actions and informed decision-making processes.
In spite of the burgeoning literature on forecasting and scenario planning, notably in link with the energy and ecological transition, little is written on the role of scenarios in bridging research, industry and civil society and in supporting collective actions and political decisions. This paper intends to fill this gap.
What types of specific collective actions do scenarios support? Do they enable the building and sharing of collective discourses and narratives between industry, academia and policy-makers or regulators? How do scenarios influence political decision-making processes linked to the future place of nuclear technologies?
Our research is based on a longitudinal, qualitative and inter-disciplinary study, begun in 2014 and still on-going, which gathers researchers in sociology, management and nuclear physics. An exploratory research phase was conducted from 2014 to 2016 in order to identify the main actors involved in nuclear-related innovation and technological choices, their roles in building and transferring knowledge, their interactions and their participation in decision-making processes. This revealed the central role of electronuclear scenario in these processes. We then conducted a second phase that drew on focus-group discussions.
The exploratory phase enabled to collect data from 32 semi-directive interviews with professionals engaged in the practice of scenario-building, i.e. physicists and engineers from the CEA, CNRS, EDF and IRSN. We supplemented this data with the observation of 10 meetings (work sessions, workshops, national commissions…) and the collection of key documents (CNE reports, CEA 2012 and 2015 report...). Our inquiry was not limited to professionals directly involved in scenario building, but took into account a broader population that includes engineers and researchers engaged in design, production or evaluation of nuclear reactor’s concepts. The analysis of the first set of data aimed at identifying the roles of the different actors and their interactions with, dependence on, and access to peers and scenarios. The second research phase aimed at understanding the role of scenarios in shaping collective actions and political decisions. We thus adopted an original methodology based on focus-groups, to structure collective discussions on a specific topic. We organized three focus-groups gathering representatives of three main social worlds involved in nuclear-related decisions: "Political and public sphere", "Academia" and "Industry". We then organized a collective feedback workshop with all previous participants to present and confront our first results.
Through a pragmatic and dynamic approach, this research reveals how the socio-technical device "scenario" supports and legitimates the participation of the different actors in nuclear research and innovation. Observing this socio-technical device and its development enables to analyze the micro-processes whereby actors become legitimate and credible participants. If they share a common activity, i.e. electronuclear scenario building, they belong to communities with moving boundaries, which evolve through segmentation and integration processes following external changes in economic and political environment and internal logics of knowledge and identity production, of legitimacy and access to resource that are made explicit by, and embodied in, scenarios.
This study also reveals the diversity of scenario definitions and roles that actors make them play, which support or hinder informed decisions. On the one hand, scenarios support knowledge transfer and translation between actors, while being flexible enough to enable different groups to work together without prior consensus or shared goals. On the other hand, scenarios can be ‘instrumentalised’ or built in a way that makes them very ‘opaque’ or too complex to support any decisions. In these last cases, scenarios rather tend to reinforce boundaries.
Contribution to Scholarship
In terms of contributions, our study shows that scenarios are not only purely technical objects, but rather techno-political ones: they are affected by occupational or organizational jurisdictions linked to expertise, legitimacy and authority. It enables to better qualify drivers and obstacles for the scenario to play an active role in robust decision-making processes. It shows its positive contributions in terms of supporting knowledge transfer and translation, discussions and collective action, while maintaining diversity of point if views and each actor's own identity. But it also reveals the difficulties associated to instrumentalization practices or opacity regarding decision-making practices. On that, it highlights the many roles (still to be deepened) that the different stakeholders make the scenario play and how this affects the quality of decisions.
Contribution to Practice
Our study shows that the relationship of the political arena to scenario, central in decision-making processes, seems ambiguous. On the one hand, they appear very far from scenarios and political decisions seem barely motivated by scenarios, for cognitive as well as strategic reason. On the other hand, they are asking for always more scenarios to support public debate and legitimize decisions.
Further research is needed in order to better qualify the foundations of evaluation practices of scenario, which could help policy-makers and more broadly civil society to distinguish between the diversity of scenarios that are built.
Our research clearly fits the global theme: "the innovation challenge: bridging research, industry and society". It aims at understanding the roles of these social worlds in nuclear-related innovation and decision processes, by organizing discussions between these actors and using them as major empirical material to collectively reflect on these issues.
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Hodgkinson, G. P., & Healey, M. P. (2008). Toward a (pragmatic) science of strategic intervention: Design propositions for scenario planning. Organization Studies, 29(3), 435-457.
Nelson N, Geltzer A and Hilgartner S (2008) Introduction: the anticipatory state: making policy-relevant knowledge about the future. Science and Public Policy 35(8): 546-550.
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Slawinski, N., & Bansal, P. (2012). A matter of time: The temporal perspectives of organizational responses to climate change. Organization Studies, 33(11), 1537-1563.