5th EMAEE Conference, May 2007, Manchester (UK) Incrementalism of environmental innovations versus paradigmatic change: a comparative study of the automotive and chemical industries Vanessa OLTRA and Maïder SAINT JEAN GREThA Bordeaux IV University

5th EMAEE Conference, May 2007, Manchester (UK) Introduction Research project (DIME network) : –« Environmental innovations: indicators, stylised facts and sectoral analyses » (coordinator: V. Oltra) –The purpose is to collect and to extend theoretical and empirical knowledge on environmental innovations and on their impact upon industrial dynamics in a sectoral perspective Main research questions : –What are the characteristics and the specificity of environmental innovations, especially compared to conventional innovations? –What are the effects of environmental regulations upon innovation? –How can we measure environmental innovations? What kind of data and indicators can be used? –Can we identify some sectoral patterns of environmental innovations?

5th EMAEE Conference, May 2007, Manchester (UK) The purpose of the paper is to compare the patterns of environmental innovations and the technological trajectory of two industrial sectors: automotive and chemicals Why these two sectors? –Strong regulatory context –High R&D intensity –Concentration of innovation and entry barriers –But, significant differences in terms of type of innovation (radical vs incremental) and type of environmental regulations Common features

5th EMAEE Conference, May 2007, Manchester (UK) - The framework - Technological regime - Market structure - Knowledge base - Technological opportunities - Appropriability conditions - Networking: vertical relationships, public-private interactions Environmental policy - Instruments: regulation and standards, economic instruments, voluntary agreements - Characteristics: time frame, stringency, flexibility, costs, uncertainty Patterns of environmental innovation - Radical / incremental innovations - End of pipe / clean technology - Sources of innovation - Persistence of dominant design / paradigmatic changes

5th EMAEE Conference, May 2007, Manchester (UK) The automotive industry: gradualism of environmental innovations in LEVs Technological regime - A complex system regime - Concentration of innovation and technological barriers to entry - High investment in R&D and intensive use of patents - Close relationships with equipment suppliers Environmental policy - A dense and diversified regulatory context - Technology-forcing emission standards - Differences among countries (EU, US, Japan): targets, stringency, type of instruments (e.g. the ZEV Mandate) Patterns of environmental innovation - Gradualism of environmental innovations: Continuous improvements of the dominant design -Technological competition among LEVs: diversity of options and technological complementarities - Sources of lock-in: scale effects, costs, infrastructures, slow fleet renewal

5th EMAEE Conference, May 2007, Manchester (UK) Comparison between emissions limit values for cars in EU, Japan and US

5th EMAEE Conference, May 2007, Manchester (UK) Evolution of the cumulated number of patents

5th EMAEE Conference, May 2007, Manchester (UK) The case of green chemistry Technological regime - A science-based regime - High R&D investment and intensive use of patents - Concentration of innovation and technological barriers but, differences among segments - Public-private partnerships Environmental policy - Stringency of international regulations - Product bans - Adoption of voluntary agreements - Role of prevention policy: the 12 principles of Green Chemistry Patterns of environmental innovation - Progressive shift towards green chemistry: new knowledge base and tools, increasing patent activity - Major source of innovation: universities and government agencies - Sources of lock-in: economies of scale and scope

5th EMAEE Conference, May 2007, Manchester (UK) International comparison of patent activity in green chemistry (source: Nameroff et al. 2004)

5th EMAEE Conference, May 2007, Manchester (UK) Conclusions Favourable conditions to the shift to green paradigms: –Stringency of regulation –Prevention and prohibition principles –The definition of a common framework: the 12 principles of green chemistry –The type of technological regime: science- based regime