the empirical analysis of the determinants for environmental technological change a research agenda abstract technological change is usually considered a necessary albeit not sufficient condition for a transition to sustainability however the empirical analysis of the determinants to environmental technological change has not received too much attention in the environmental ecological economics literature and many open questions remain in this context based on a careful review of the literature this paper argues that further analysis should address several issues at different levels i e regarding the conceptual framework the thematic scope of the studies some methodological issues and other aspects related to the environmental policy variable first an integrated conceptual framework which takes into account the interplay between relevant variables influencing environmental technological change i e factors internal and external to the firm and characteristics of the environmental technologies and all the stages of this process with a greater emphasis on the invention stage should be developed other aspects should then be tackled including a focus on several themes i e a greater attention to cross sectoral technologies the barriers to different types of environmental technologies the international dimension of environmental technological change and environmental technological change in small and medium size enterprises methodological issues combination of case studies and econometric modelling and several issues related to the environmental policy variable

monopolistic competition increasing returns to specialization and output persistence abstract devereux et al economics letters 1993 41 57 61 showed that introducing together imperfect competition and increasing returns to specialization into real business cycle rbc type models results in making output more persistent than the underlying technology shocks we carry out a simple generalization of their model which clearly disentangles the two features and show that the added persistence is actually because of the increasing returns to specialization

aggregate fluctuations with national and international returns to scale cyclical movements in aggregate output factor inputs and productivity are all positively correlated across countries this article proposes a model in which positive cross country correlations of these variables result from increasing returns to the world wide variety of intermediate goods even if technology shocks are purely country specific the model also accounts for the observed positive relationship between bilateral trade volume and international comovements positive comovements can also arise with constant returns to variety but only if technology shocks are themselves strongly correlated the combination of constant returns and common shocks however tends to generate procyclical fluctuations of the trade balance

demand pull technology push and government led incentives for non incremental technical change abstract rising expectations about future demand for new technologies increase the incentives for investments in innovation by enlarging payoffs to successful innovations how well does this notion of demand pull apply to non incremental technological change when demand is largely attributable to actions by governments in this case inventors of the most important inventions did not respond positively to strong demand pull policies filing of highly cited patents declined precipitously just as demand for wind power created a multi billion dollar market three explanations for this apparent inconsistency with the demand pull hypothesis played a role 1 the rapid convergence on a single dominant design limited the market opportunity for non incremental technical improvements 2 even though the policies implemented were stringent enough to stimulate demand uncertainty in their longevity dampened the incentives for inventions that were likely to take several years to pay off and 3 alternative explanations such as declining r d funding and weakening presidential engagement on energy appear to have been important

multipliers imperfect competition or increasing returns to scale abstract in a recent paper rotemberg and woodford 1995 study the behavior of imperfectly competitive economies to conclude that imperfect competition magnifies the response of output to certain exogenous shocks we show that their results are entirely driven by the presence of increasing returns to scale and not by imperfect competition

on the relationship between firm size and export intensity export marketing literature supports the view that firm size is positively related to export intensity although the empirical findings have been mixed a number of theoretical arguments are used to support this proposition i e international marketing economies of scale limited managerial and financial resources of small firms decisionmaker s risk perception based on a large survey of the italian manufacturing industry the article falsifies the proposition and challenges some widely held assumptions in export marketing literature

large dynamic covariance matrices second moments of asset returns are important for risk management and portfolio selection the problem of estimating second moments can be approached from two angles time series and the cross section in time series the key is to account for conditional heteroscedasticity a favored model is dynamic conditional correlation dcc derived from the arch garch family started by engle 1982 in the cross section the key is to correct in sample biases of sample covariance matrix eigenvalues a favored model is nonlinear shrinkage derived from random matrix theory rmt the present article marries these two strands of literature to deliver improved estimation of large dynamic covariance matrices supplementary material for this article is available online

endogenous growth and real effects of monetary policy r d and physical capital complementarities we study the real long run effects of the structural stance of monetary policy and of inflation in the context of a monetary growth model where r d is complemented with physical capital accumulation we look into the effects on a set of real macroeconomic variables that have been of interest to policymakers the economic growth rate real interest rate physical investment rate capital to labor ratio r d intensity and velocity of money these variables have been previously analyzed from the perspective of different separated strands of the theoretical and empirical literature additionally we analyze the long run relationship between inflation and both the effectiveness of real industrial policy shocks and the market structure assessed namely by average firm size we present novel cross country evidence on the empirical relationship between the latter and long run inflation

the governance of sustainable socio technical transitions a quasi evolutionary model of socio technical transitions is described in which regimes face selection pressures continuously differentiated transition contexts determine the form and direction of regime change in response to these pressures the articulation of pressures and the degree to which responses are coordinated and based on resources available within the regime define the transition context four alternative contexts are described endogenous renewal re orientation of trajectories emergent transformation and purposive transitions agency and power in the governance of regime transformation are analysed power to affect change depends on regime membership the distribution of resources for change and expectations

dynamic causality between the u s stock market the chinese stock market and the global gold market implications for individual investors diversification strategies this paper proposes a generalization of the prior var and egarch model to explore the linkage between returns and volatility transmissions in the u s stock market the chinese stock market and th

large scale minimum variance portfolio allocation using double regularization abstract estimation of time varying covariances is a crucial input in minimum variance mv portfolio allocations rolling window based sample estimates are widely used for this purpose but they usually suffer from two major issues when applied to a moderately large number of assets the curse of dimensionality and temporal instability here we propose a double regularized estimator for a high dimensional covariance matrix in which we impose both a temporal and cross sectional sparsity regularization on the sample based estimates to simultaneously mitigate these two issues we investigate the performance of our proposed covariance estimator for mv portfolio construction using monte carlo experiments and empirical examples we find that the resulting mv portfolio strikes a good balance between risk and turnover reduction and produces more accurate equivalent returns after transaction costs are taken into account when compared to four other mv strategies

understanding carbon lock in abstract this paper narrative argues that industrial economies have been locked into fossil fuel based energy systems through a process of technological and institutional co evolution driven by path dependent increasing returns to scale it is asserted that this condition termed carbon lock in creates persistent market and policy failures that can inhibit the diffusion of carbon saving technologies despite their apparent environmental and economic advantages the notion of a techno institutional complex is introduced to capture the idea that lock in occurs through combined interactions among technological systems and governing institutions while carbon lock in provides a conceptual basis for understanding macro level barriers to the diffusion of carbon saving technologies it also generates questions for standard economic modeling approaches that abstract away technological and institutional evolution in their elaboration the question of escaping carbon lock in is left for a future paper

toward a new conception of the environment competitiveness relationship accepting a fixed trade off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress studies finding high environmental compliance costs have traditionally focused on static cost impacts ignoring any offsetting productivity benefits from innovation they typically overestimated compliance costs neglected innovation offsets and disregarded the affected industry s initial competitiveness rather than simply adding to cost properly crafted environmental standards can trigger innovation offsets allowing companies to improve their resource productivity shifting the debate from pollution control to pollution prevention was a step forward it is now necessary to make the next step and focus on resource productivity

testing and valuing dynamic correlations for asset allocation we evaluate alternative models of variances and correlations with an economic loss function we construct portfolios to minimize predicted variance subject to a required return it is shown that the realized volatility is smallest for the correctly specified covariance matrix for any vector of expected returns a test of relative performance of two covariance matrices is based on work of diebold and mariano the method is applied to stocks and bonds and then to highly correlated assets on average dynamically correct correlations are worth around 60 basis points in annualized terms but on some days they may be worth hundreds

the influence of market demand upon innovation a critical review of some recent empirical studies abstract a number of recent empirical studies of technical change at the level of the individual firm have concluded that market demand is the dominant influence upon the innovation process calling forth innovations in market economies the pace of innovation in the private sector heavily influences the growth of national output and productivity and these studies and their conclusions have therefore received much attention having been extensively quoted in discussions of appropriate government policy for the encouragement of innovation this paper reviews a number of these studies and concludes that their findings and the interpretations of their findings in the secondary literature are seriously flawed and in many cases invalid the proposition that market demand governs the innovation process is by no means conclusively demonstrated in these studies and they are therefore inadequate and inappropriate guides for the formulation of policy most of the studies examined employ a working definition of demand factors which is so broad as to embrace a range of possible influences upon innovation which should more properly be classified elsewhere the concept of demand utilized in these studies bears little resemblance to the more restrictive and precise definition of market demand found in economics in addition the phenomena analyzed in these studies are a very heterogeneous lot the studies do not address identical empirical questions and their findings are as a result neither uniform nor unambiguous both demand and supply side influences are crucial to understanding the innovation process and it is the exclusive preoccupation with only one set of these forces which is criticized in this paper some implications of the criticism for government policy toward innovation are discussed in the conclusion

aggregation persistence and volatility in a macro model we introduce firm heterogeneity into the standard monopolistically competitive real business cycle rbc model the fundamental equilibrium path is derived and the time series properties of aggregate gdp are studied analytically although firms productivities are subject to temporary shocks the aggregate process displays a surprising novel form of nonlinearity and long memory which had not been built into the model at the outset this aggregate gdp turns out to have very different properties from log linear time series models such as auto regressive ar models and their extensions it displays very strong persistence which ends abruptly with a sudden change of tendency giving its autocorrelation function acf an s shape although persistent it is mean reverting unlike the everlasting memory of unit root processes its volatility is of a greater order of magnitude than that of any of its components so small micro shocks can generate large macro fluctuations it is also characterized by long asymmetric cycles of random lengths increased monopoly power tends to reduce the amplitude and increase the

technology policy and global warming why new policy models are needed or why putting new wine in old bottles won t work in recent years the threat of global climate change has come to be seen as one of the most serious confronting humanity to meet this challenge will require the development of new technologies and the substantial improvement of existing ones as well as ensuring their prompt and widespread deployment some have argued that the urgency of the situation requires a manhattan project or an apollo program this paper examines why such a policy model is inappropriate arguing that the nature of the policy context for confronting climate change necessitates a different kind of technology policy than that for building an atomic bomb or for achieving a manned lunar landing instead it seeks to draw lessons from three sectors that seem to be more pertinent and where government technological development and deployment programs have been pursued with some success in the united states namely agriculture biomedical research and information technology it compares and contrasts these with the policies pursued with regard to the first two of these sectors in the united kingdom the paper concludes by drawing out the implications for the design of policies supporting technological development and innovation to address the problem of global climate change

escaping carbon lock in this article explores the climate policy implications of the arguments made in understanding carbon lock in unruh 2000 which posited that industrial countries have become locked into fossil fuel based energy systems through path dependent processes driven by increasing returns to scale carbon lock in arises through technological organizational social and institutional co evolution culminating in what was termed as techno institutional complex tic in order to resolve the climate problem an escape from the lock in condition is required however due to the self referential nature of tic escape conditions are unlikely to be generated internally and it is argued here that exogenous forces are probably required

why do firms do basic research with their own money abstractthe question to be addressed is why do private firms perform basic research with their own money interest in this question derives from both analytical and utilitarian considerations there is empirical evidence in the united states which provides the main context for this paper supporting the view that basic research makes a significant contribution to the productivity growth of the economy 4 7 it is widely held that social returns from basic research are significant and higher than private returns and it is for this reason that most such activities continue to be financed by the taxpayer this also implies that measures aimed at increasing basic research by the private sector will be welfare improving in the united states the federal government in the years since the second world war has provided the vast majority of all funds devoted to basic research although the federal share has been declining in recent years and although that share is at its lowest level in about 20 years it still constitutes about two thirds of the total 10 this abstract was borrowed from another version of this item

impulse dynamics and propagation mechanisms in a real business cycle model abstract in a typical real business cycle model we find that output dynamics are determined primarily by impulse dynamics and that endogenous propagation mechanisms are weak consequently the model must rely on external sources of dynamics in order to replicate the univariate dynamics of u s per capita gnp

fiscal policy monopolistic competition and finite lives abstract this paper studies the short run transitional and long run output effects of permanent and temporary shocks in public consumption under various financing methods to this end a dynamic macroeconomic model for a closed economy is developed which features a perfectly competitive final goods sector and a monopolistically competitive intermediate goods sector finitely lived households consume final goods supply labor and save part of their income amongst the findings for a permanent rise in public consumption are i monopolistic competition increases the absolute value of the balanced budget output multiplier ii positive long run output multipliers are obtained only if the generational turnover effect is dominated by the intertemporal labor supply effect iii short run output multipliers under lump sum tax financing are smaller than long run output multipliers if labor supply is elastic and iv bond financing reduces the size of long run output multipliers as compared to lump sum tax financing and may give rise to non monotonic adjustment paths if labor supply is sufficiently elastic and the speed of adjustment of lump sum taxes is not too high temporary bond financed fiscal shocks are shown to yield i permanent effects on output and ii negative long run output multipliers

optimal diversity increasing returns versus recombinant innovation abstract choices regarding diversity play an important role in economics and innovation management but often remain implicit once made explicit the objectives of efficiency and diversity are usually posed as in conflict as efficiency relates positively and diversity negatively to various increasing returns to scale in markets such a perspective however neglects the benefits of diversity in terms of realizing system improvements through recombinant innovation or spillovers the latter implies a contribution of diversity to long term efficiency dominant economic approaches that address diversity such as option value and real options theories regard benefits of diversity as exogenous this paper proposes a simple model of variable endogenous diversity to analyse the optimal balance between increasing returns to scale and recombinant innovation it is discussed under which conditions one of four solutions is optimal complete specialization regardless of which option complete specialization in one specific option symmetric diversity perfect balance and asymmetric diversity the results give rise to a number of policy insights

the innovation effects of environmental policy instruments a typical case of the blind men and the elephant abstract in this paper we examine the innovation effects of environmental policy instruments in four literatures theoretical models on incentives for eco innovation econometric studies based on observed data survey analysis based on stated information and technology case studies the aim of this paper is to critically examine the methods and the results we argue that the case studies literature even when its results are specific and difficult to generalise is a necessary source of empirical evidence about policy impacts and the factors responsible for these impacts pointing to issues that are neglected in the theoretical and econometric literature such as the specifics of the innovation context and policy interaction effects the paper states five synthesised findings and makes a plea for multi method analysis one other important synthesised finding is that the influence of market based instruments on innovation such as emission trading and taxes is far weaker than assumed

endogenous markups intensity of competition and persistence of business cycles in order to study the propagation mechanism of business cycles in particular to investigate how the intensity of competition affects market structure and output persistence over business cycles this paper presents a real business cycle model with imperfect competition and increasing returns to scale this analysis considers the markups of price over cost to be endogenous with endogenous markups two standard forms of oligopolistic competition bertrand and cournot are considered results show that 1 the propagation mechanism in the sense of output persistence is greater under cournot 2 the propagation mechanism is unequivocally greater with imperfect competition regardless of whether markups are endogenous or not and 3 under imperfect competition the propagation mechanism is greater with endogenous markups than with exogenous markups overall these results suggest that more intense competition produces lower persistence in output growth and thus a weaker propagation mechanism in a calibration exercise these differences were also found to be quantitatively important

redefining innovation eco innovation research and the contribution from ecological economics while innovation processes toward sustainable development eco innovations have received increasing attention during the past years theoretical and methodological approaches to analyze these processes are poorly developed against this background the term eco innovation is introduced in this paper addressing explicitly three kinds of changes towards sustainable development technological social and institutional innovation secondly the potential contribution of neoclassical and co evolutionary approaches from environmental and innovation economics to eco innovation research is discussed three peculiarities of eco innovation are identified the double externality problem the regulatory push pull effect and the increasing importance of social and institutional innovation while the first two are widely ignored in innovation economics the third is at the least not elaborated appropriately the consideration of these peculiarities may help to overcome market failure by establishing a specific eco innovation policy and to avoid a technology bias through a broader understanding of innovation finally perspectives for a specific contribution of ecological economics to eco innovation research are drawn it is argued that methodological pluralism as established in ecological economics would be very beneficial for eco innovation research a theoretical framework integrating elements from both neoclassical and evolutionary approaches should be pursued in order to consider the complexity of factors influencing innovation decisions as well as the specific role of regulatory instruments and the experience gathered in ecological economics integrating ecological social and economic aspects of sustainable development is highly useful for opening up innovation research to social and institutional changes 2000 elsevier science b v all rights reserved

optimal government spending in an economy with imperfectly competitive goods and labor markets this article examines the growth and welfare maximizing government spending in an economy that is characterized by market imperfections namely unionization in the labor market and monopolistic competition in the goods market to thoughtfully explore the optimal spending two distinct scenarios where the government spending is financed by labor capital income taxes are considered our analysis shows that the optimal growth maximizing government spending is inconsistent with the welfare maximizing government spending moreover the growth maximizing welfare maximizing government spending have quite different responses to distinctive market imperfections markups in the goods and labor markets particularly in the scenarios with distinctive financing modes our numerical study indicates that the growth maximizing and welfare maximizing government expenditures in general are more responsive to the change in the labor market friction than that in the product market friction and the growth maximizing government spending is more likely to be lower than the welfare maximizing government spending

determinants of environmental innovation new evidence from german panel data sources abstract in most cases empirical analyses of environmental innovations based on firm level data relied on surveys for one point in time these surveys allow for the inclusion of many explanatory variables such as different policy instruments or the influence of pressure groups but it is not possible to address the dynamic character of environmental innovations this paper uses two german panel databases the establishment panel of the institute for employment research iab and the mannheim innovation panel mip of the centre for european economic research zew to explore the determinants of environmental innovations the econometric estimations show that the improvement of the technological capabilities knowledge capital by r d triggers environmental innovations environmental regulation environmental management tools and general organizational changes also encourage environmental innovation a result that has also been postulated by the famous porter hypothesis

beyond technology push and demand pull lessons from california s solar policy abstract the scale of the technological transformation required to reduce greenhouse gas emissions to safe levels while minimizing economic impacts necessitates an emphasis on designing climate policy to foster or at least not impede environmental innovation there is only a weak empirical base for policy makers to stand on regarding the comparative innovation effects of various climate policy options however empirical scholarship in environmental innovation is hindered by the complexity of both the innovation process and the interactions between the dual market failures of pollution and innovation that are in play and it appears that the field would benefit from the structure provided by a common lexicon this paper focuses on the issues related to policy categorization in this field these issues have received little attention in the literature despite their importance to making insights gained from empirical studies generalizable the paper reviews the origins strengths and weaknesses of the dominant policy typology of technology push versus demand pull instruments its primary contribution however is to assemble a comprehensive chronology of solar policy in california and its impacts on innovation where known and then use this as a basis for building a new policy categorization that takes advantage of the intuitive resonance of the dominant typology while encompassing the broader range of policy instruments that are employed in practice in order to stimulate environmental innovation the most noteworthy aspect of the new categorization is that it introduces a third category of environmental innovation policy instrument that focuses on improving the interface between technology suppliers and users this reflects developments in the economics of innovation literature as well as considerable evidence in the domain of distributed solar energy technologies that opportunism by some of the actors that work at this interface can be a barrier to innovation

what determines aggregate returns to scale abstract this paper develops a unified framework that incorporates four features important in existing models with increasing returns fixed costs decreasing marginal costs product variety and market power when fixed costs are not allowed to vary and profits are imposed to be zero in every period only the degree of returns to variety determines the degree of aggregate increasing returns to scale when fixed costs respond to changes in aggregate activity or the zero profit condition does not hold in the short run aggregate returns depend not only on product variety but also on diminishing marginal costs or market power the degree of market power however does not affect input prices which are critical to determine the uniqueness of equilibrium

the two faces of market support how deployment policies affect technological exploration and exploitation in the solar photovoltaic industry the recent years have seen a strong rise in policies aiming to increase the diffusion of clean energy technologies while there is general agreement that such deployment policies have been very effective in bringing technologies to the market it is less understood how these policies affect technological innovation to shed more light on this important question we conducted comparative case studies with a global sample of 9 firms producing solar photovoltaic pv modules complemented by in depth interviews with 16 leading pv industry experts we propose that on the one hand policy induced market growth serves as an important catalyst for innovative activity as it raises the absolute level of firm investments in technological exploration on the other hand however deployment policies create an incentive for firms pursuing more mature technologies to shift their balance between exploitation and exploration toward exploitation firms focusing on less mature technologies cannot tap the potentials of exploitative learning to the same extent as those with more mature technologies therefore stimulating strong market growth may raise the barrier to market entry for less mature technologies we conclude that when designing deployment policies great care should be taken to avoid adverse effects on technological diversity and a premature lock in into more established technologies

monopolistic competition technology shocks and aggregate fluctuations abstract we analyze a real business cycle rbc model in which aggregate production exhibits increasing returns to specialization in conjunction with imperfect competition and free entry and exit of firms over the business cycle we show that the requirements of both high variance and high persistence in technology shocks that have been noted by critics of rbc theory may arise from the assumptions of perfect competition and constant returns to scale rather than from the general proposition that real productivity shocks can significantly account for the business cycle

evolutionary economics and technology policy in this brief paper i propose to explore the economics of technology policy from an evolutionary perspective as with any evolutionary argument the central concern is with the mechanisms of economic change in this case in relation to the development of new technologies and patterns of organisation and their spread into the wider economic system in this sense we build upon one of the major stylized facts of modern growth structural change at all levels from the microeconomic to the macroeconomic to any observer of the policy making process let alone a practitioner the contrast between the theory which underpins policy and the implementation of policy will seem acute as nelson and winter i982 have rightly insisted research into policy is shaped by policy questions not by an agenda relating to how economic theory can be developed to deal with innovation setting priorities designing instruments and evaluating outcomes do not link easily with the general ideas dealt with below among the general points we will stress two will be of critical importance first that the innovation activities of firms involve a wider range of other institutions supplying the knowledge and skills which underpin the efforts of individual firms we term this the systems perspective on innovation nelson i993 secondly it is not helpful to treat innovation and the diffusion of innovation as separate categories in fact they are inseparable with feedback from diffusion being one of the critical elements shaping how a technology is developed we begin with a brief review of the familiar market failure perspective on policy and build from this into a brief overview of the evolutionary approach the paper concludes with an outline of the systems perspective on technology policy it is taken as read that virtually any economic policy can have implications in principle for the process of innovation however we treat technology policy in a narrow sense even though it spills over into questions of education policy science policy and competition policy

a tale of two market failures technology and environmental policy abstract market failures associated with environmental pollution interact with market failures associated with the innovation and diffusion of new technologies these combined market failures provide a strong rationale for a portfolio of public policies that foster emissions reduction as well as the development and adoption of environmentally beneficial technology both theory and empirical evidence suggest that the rate and direction of technological advance is influenced by market and regulatory incentives and can be cost effectively harnessed through the use of economic incentive based policy in the presence of weak or nonexistent environmental policies investments in the development and diffusion of new environmentally beneficial technologies are very likely to be less than would be socially desirable positive knowledge and adoption spillovers and information problems can further weaken innovation incentives while environmental technology policy is fraught with difficulties a long term view suggests a strategy of experimenting with policy approaches and systematically evaluating their success

welfare improving debt policy under monopolistic competition abstract we analyse the effects of debt policy in an overlapping generations model with monopolistic competition debt crowds out capital and raises interest rates but unlike competitive models this is welfare improving for all generations if the elasticities of substitution in production are low in a non competitive model the social marginal product of capital could be negative while the rate of interest exceeds the population growth rate the latter two are non negative and profits exceed investment

going green trade specialisation dynamics in the solar photovoltaic sector abstract the present study aims at providing a comprehensive analysis of trade flows and the domestic value creation of the major solar photovoltaic industry at the world level solar technologies convert light and heat from the sun into useful energy the use of the sun s energy can not only reduce the consumption of conventional fuels thus reducing the emission of detrimental greenhouse gases but it can also enable a gain in enhanced fuel and energy security along with lessening costs in addition green technologies and industries can promote economic growth and international competitiveness and can offer new business and employment opportunities it becomes therefore extremely important to deeply explore the dynamics of the solar photovoltaic sector specifically the present work analyses the main global trends of this sector and sketches the key players on the world market including producers installers and top traders based on an analysis of trade flows at the 6 digit level the international specialisation patterns are investigated and the role of various market and trade drivers including subsidies in the uptake of solar technologies is identified and examined

evolutionary approaches for sustainable innovation policies from niche to paradigm fostering technological innovation is considered as an important element of policies towards sustainable development in the past 10 years evolutionary policy approaches have been increasingly advocated for several reasons they seem well equipped to underpin sustainable innovation policies they focus on dynamics of change and their drivers they allow for a substantive perspective on technologies beyond mere input output relations taking into account trajectories and different characteristics of innovation and they are able to describe circumstances under which established technologies might persist even when they are to some extent inferior to their new competitors lock in however the policy effectiveness of evolutionary approaches in cases in which radical or systemic changes are involved is not yet proven in this paper we assess the theoretical rationale instrumental aspects and the coping with policy constraints of three evolutionary policy approaches which have also been used in empirical studies strategic niche management transition management and time strategies each approach has its strengths and specific problems and all three have to be further developed and tested out but they hold promise for contributing to non incremental change with economic and environmental benefits by shaping processes of variation selection and retention with the outcomes feeding back into policy they may also be used in other areas in which innovation direction is important for instance health care or food

uk innovation systems for new and renewable energy technologies drivers barriers and systems failures abstract a better understanding of the systemic processes by which innovation occurs is useful both conceptually and to inform policy making in support of innovation in more sustainable technologies this paper analyses current innovation systems in the uk for a range of new and renewable energy technologies and generates policy recommendations for improving the effectiveness of these innovation systems although incentives are in place in the uk to encourage innovation in these technologies system failures or gaps are identified in moving technologies along the innovation chain preventing their successful commercialisation sustained investment will be needed for these technologies to achieve their potential it is argued that a stable and consistent policy framework is required to help create the conditions for this in particular such a framework should be aimed at improving risk reward ratios for demonstration and pre commercial stage technologies this would enhance positive expectations stimulate learning effects leading to cost reductions and increase the likelihood of successful commercialisation