Table Of Content(cid:1)(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:5)(cid:8)(cid:6)(cid:9)(cid:6)(cid:4)(cid:10) (cid:5)(cid:7)(cid:11) (cid:12)(cid:7)(cid:7)(cid:13)(cid:14)(cid:5)(cid:4)(cid:6)(cid:13)(cid:7)
(cid:1)(cid:2)(cid:3)(cid:4)(cid:2)(cid:5) (cid:6)(cid:7)(cid:4)(cid:8)(cid:9)(cid:3)(cid:5)
(cid:15)(cid:8)(cid:16)(cid:17)(cid:18)(cid:5)(cid:17)(cid:11) (cid:19)(cid:16)(cid:16)(cid:3)(cid:3)
(cid:20)(cid:21)(cid:22)(cid:23) (cid:24)(cid:5)(cid:25)(cid:18)(cid:16)(cid:7)(cid:26) (cid:27)(cid:16)(cid:17)(cid:28)(cid:5)(cid:7)(cid:10)
(cid:29)(cid:16)(cid:7)(cid:3) (cid:23)(cid:16)(cid:28)(cid:28)(cid:16)(cid:9)(cid:3)(cid:30)(cid:5)(cid:28)(cid:31)
(cid:7)(cid:6)(cid:14)(cid:16)(cid:17)(cid:3)(cid:6)(cid:4)(cid:10) (cid:13)! (cid:23)(cid:16)(cid:6)(cid:11)(cid:16)(cid:9)(cid:8)(cid:16)(cid:17)"(cid:26) (cid:27)(cid:16)(cid:17)(cid:28)(cid:5)(cid:7)(cid:10)
(cid:29)(cid:13)(cid:3)(cid:16)(cid:31)(cid:18) (cid:23)(cid:2)(cid:8)(cid:16)(cid:17)
(cid:7)(cid:6)(cid:14)(cid:16)(cid:17)(cid:3)(cid:6)(cid:4)(cid:10) (cid:13)! (cid:23)(cid:5)(cid:9)(cid:9)(cid:16)#(cid:21)(cid:6)(cid:4)(cid:4)(cid:16)(cid:7)(cid:8)(cid:16)(cid:17)"(cid:26) (cid:27)(cid:16)(cid:17)(cid:28)(cid:5)(cid:7)(cid:10)
$(cid:5)(cid:17)(cid:25)(cid:13) %(cid:16)(cid:18)(cid:28)(cid:5)(cid:7)(cid:7)#(cid:21)(cid:5)!!(cid:16)(cid:7)(cid:3)(cid:25)(cid:18)(cid:28)(cid:6)(cid:11)(cid:4)
&(cid:17)(cid:16)(cid:3)(cid:11)(cid:16)(cid:7) (cid:7)(cid:6)(cid:14)(cid:16)(cid:17)(cid:3)(cid:6)(cid:4)(cid:10) (cid:13)! (cid:22)(cid:16)(cid:25)(cid:18)(cid:7)(cid:13)(cid:9)(cid:13)"(cid:10)(cid:26) (cid:27)(cid:16)(cid:17)(cid:28)(cid:5)(cid:7)(cid:10)
(cid:29)(cid:16)(cid:7)(cid:3) (cid:23)(cid:13)(cid:17)(cid:8)(cid:5)(cid:25)(cid:18)
’(cid:15)(cid:11)(cid:6)(cid:4)(cid:13)(cid:17)(
(cid:12)(cid:7)(cid:11)(cid:6)(cid:25)(cid:5)(cid:4)(cid:13)(cid:17) (cid:1)(cid:10)(cid:3)(cid:4)(cid:16)(cid:28)(cid:3)
!(cid:13)(cid:17) (cid:1)(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:5)(cid:8)(cid:9)(cid:16) (cid:12)(cid:7)(cid:7)(cid:13)(cid:14)(cid:5)(cid:4)(cid:6)(cid:13)(cid:7)
(cid:21)(cid:6)(cid:4)(cid:18) )) (cid:19)(cid:6)"(cid:2)(cid:17)(cid:16)(cid:3) (cid:5)(cid:7)(cid:11) * (cid:22)(cid:5)(cid:8)(cid:9)(cid:16)(cid:3)
+(cid:18)(cid:10)(cid:3)(cid:6)(cid:25)(cid:5)#,(cid:16)(cid:17)(cid:9)(cid:5)"
(cid:24) (cid:1)(cid:31)(cid:17)(cid:6)(cid:7)"(cid:16)(cid:17) -(cid:13)(cid:28)(cid:31)(cid:5)(cid:7)(cid:10)
+(cid:17)(cid:13)!(cid:16)(cid:3)(cid:3)(cid:13)(cid:17) &(cid:17). (cid:29)(cid:16)(cid:7)(cid:3) (cid:23)(cid:13)(cid:17)(cid:8)(cid:5)(cid:25)(cid:18)
(cid:7)(cid:6)(cid:14)(cid:16)(cid:17)(cid:3)(cid:6)(cid:4)(cid:10) (cid:13)! (cid:24)(cid:31)(cid:31)(cid:9)(cid:6)(cid:16)(cid:11) (cid:1)(cid:25)(cid:6)(cid:16)(cid:7)(cid:25)(cid:16)(cid:3) (cid:24)(cid:7)(cid:18)(cid:5)(cid:9)(cid:4)
(cid:1)(cid:4)(cid:17)(cid:16)(cid:7)/!(cid:16)(cid:9)(cid:11)(cid:16)(cid:17) (cid:24)(cid:9)(cid:9)(cid:16)(cid:16) )0
12312 4(cid:16)(cid:17)(cid:7)(cid:8)(cid:2)(cid:17)"
(cid:18)(cid:13)(cid:17)(cid:8)(cid:5)(cid:25)(cid:18)56(cid:6).(cid:18)(cid:3)#(cid:5)(cid:7)(cid:18)(cid:5)(cid:9)(cid:4).(cid:11)(cid:16)
-(cid:5)(cid:4)(cid:5)(cid:9)(cid:13)"(cid:6)(cid:7)"#(cid:6)(cid:7)#+(cid:2)(cid:8)(cid:9)(cid:6)(cid:25)(cid:5)(cid:4)(cid:6)(cid:13)(cid:7)&(cid:5)(cid:4)(cid:5)
%(cid:6)(cid:8)(cid:17)(cid:5)(cid:17)(cid:10)(cid:13)!-(cid:13)(cid:7)"(cid:17)(cid:16)(cid:3)(cid:3)-(cid:13)(cid:7)(cid:4)(cid:17)(cid:13)(cid:9)7(cid:2)(cid:28)(cid:8)(cid:16)(cid:17)8)113992:;<
(cid:12)(cid:1)47 <#;*10#9::<#: +(cid:18)(cid:10)(cid:3)(cid:6)(cid:25)(cid:5)#,(cid:16)(cid:17)(cid:9)(cid:5)" (cid:23)(cid:16)(cid:6)(cid:11)(cid:16)(cid:9)(cid:8)(cid:16)(cid:17)" 7(cid:16)6 =(cid:13)(cid:17)(cid:30)
(cid:22)(cid:18)(cid:6)(cid:3) 6(cid:13)(cid:17)(cid:30) (cid:6)(cid:3) (cid:3)(cid:2)(cid:8)>(cid:16)(cid:25)(cid:4) (cid:4)(cid:13) (cid:25)(cid:13)(cid:31)(cid:10)(cid:17)(cid:6)"(cid:18)(cid:4). (cid:24)(cid:9)(cid:9) (cid:17)(cid:6)"(cid:18)(cid:4)(cid:3) (cid:5)(cid:17)(cid:16) (cid:17)(cid:16)(cid:3)(cid:16)(cid:17)(cid:14)(cid:16)(cid:11)(cid:26) 6(cid:18)(cid:16)(cid:4)(cid:18)(cid:16)(cid:17) (cid:4)(cid:18)(cid:16) 6(cid:18)(cid:13)(cid:9)(cid:16) (cid:13)(cid:17) (cid:31)(cid:5)(cid:17)(cid:4) (cid:13)! (cid:4)(cid:18)(cid:16)
(cid:28)(cid:5)(cid:4)(cid:16)(cid:17)(cid:6)(cid:5)(cid:9)(cid:6)(cid:3)(cid:25)(cid:13)(cid:7)(cid:25)(cid:16)(cid:17)(cid:7)(cid:16)(cid:11)(cid:26)(cid:3)(cid:31)(cid:16)(cid:25)(cid:6)!(cid:6)(cid:25)(cid:5)(cid:9)(cid:9)(cid:10)(cid:4)(cid:18)(cid:16)(cid:17)(cid:6)"(cid:18)(cid:4)(cid:3)(cid:13)!(cid:4)(cid:17)(cid:5)(cid:7)(cid:3)(cid:9)(cid:5)(cid:4)(cid:6)(cid:13)(cid:7)(cid:26)(cid:17)(cid:16)(cid:31)(cid:17)(cid:6)(cid:7)(cid:4)(cid:6)(cid:7)"(cid:26)(cid:17)(cid:16)(cid:2)(cid:3)(cid:16)(cid:13)!(cid:6)(cid:9)(cid:9)(cid:2)(cid:3)(cid:4)(cid:17)(cid:5)(cid:4)(cid:6)(cid:13)(cid:7)(cid:3)(cid:26)(cid:17)(cid:16)(cid:25)(cid:6)#
(cid:4)(cid:5)(cid:4)(cid:6)(cid:13)(cid:7)(cid:26)(cid:8)(cid:17)(cid:13)(cid:5)(cid:11)(cid:25)(cid:5)(cid:3)(cid:4)(cid:6)(cid:7)"(cid:26)(cid:17)(cid:16)(cid:31)(cid:17)(cid:13)(cid:11)(cid:2)(cid:25)(cid:4)(cid:6)(cid:13)(cid:7)(cid:13)(cid:7)(cid:28)(cid:6)(cid:25)(cid:17)(cid:13)!(cid:6)(cid:9)(cid:28)(cid:13)(cid:17)(cid:6)(cid:7)(cid:5)(cid:7)(cid:10)(cid:13)(cid:4)(cid:18)(cid:16)(cid:17)6(cid:5)(cid:10)(cid:26)(cid:5)(cid:7)(cid:11)(cid:3)(cid:4)(cid:13)(cid:17)(cid:5)"(cid:16)(cid:6)(cid:7)(cid:11)(cid:5)(cid:4)(cid:5)(cid:8)(cid:5)(cid:7)(cid:30)(cid:3).
&(cid:2)(cid:31)(cid:9)(cid:6)(cid:25)(cid:5)(cid:4)(cid:6)(cid:13)(cid:7) (cid:13)! (cid:4)(cid:18)(cid:6)(cid:3) (cid:31)(cid:2)(cid:8)(cid:9)(cid:6)(cid:25)(cid:5)(cid:4)(cid:6)(cid:13)(cid:7) (cid:13)(cid:17) (cid:31)(cid:5)(cid:17)(cid:4)(cid:3) (cid:4)(cid:18)(cid:16)(cid:17)(cid:16)(cid:13)! (cid:6)(cid:3) (cid:31)(cid:16)(cid:17)(cid:28)(cid:6)(cid:4)(cid:4)(cid:16)(cid:11) (cid:13)(cid:7)(cid:9)(cid:10) (cid:2)(cid:7)(cid:11)(cid:16)(cid:17) (cid:4)(cid:18)(cid:16) (cid:31)(cid:17)(cid:13)(cid:14)(cid:6)(cid:3)(cid:6)(cid:13)(cid:7)(cid:3) (cid:13)! (cid:4)(cid:18)(cid:16)
(cid:27)(cid:16)(cid:17)(cid:28)(cid:5)(cid:7) -(cid:13)(cid:31)(cid:10)(cid:17)(cid:6)"(cid:18)(cid:4) %(cid:5)6 (cid:13)! (cid:1)(cid:16)(cid:31)(cid:4)(cid:16)(cid:28)(cid:8)(cid:16)(cid:17) *(cid:26) 9*2:(cid:26) (cid:6)(cid:7) (cid:6)(cid:4)(cid:3) (cid:25)(cid:2)(cid:17)(cid:17)(cid:16)(cid:7)(cid:4) (cid:14)(cid:16)(cid:17)(cid:3)(cid:6)(cid:13)(cid:7)(cid:26) (cid:5)(cid:7)(cid:11) (cid:31)(cid:16)(cid:17)(cid:28)(cid:6)(cid:3)(cid:3)(cid:6)(cid:13)(cid:7) !(cid:13)(cid:17) (cid:2)(cid:3)(cid:16)
(cid:28)(cid:2)(cid:3)(cid:4) (cid:5)(cid:9)6(cid:5)(cid:10)(cid:3) (cid:8)(cid:16) (cid:13)(cid:8)(cid:4)(cid:5)(cid:6)(cid:7)(cid:16)(cid:11) !(cid:17)(cid:13)(cid:28) +(cid:18)(cid:10)(cid:3)(cid:6)(cid:25)(cid:5)#,(cid:16)(cid:17)(cid:9)(cid:5)". ,(cid:6)(cid:13)(cid:9)(cid:5)(cid:4)(cid:6)(cid:13)(cid:7)(cid:3) (cid:5)(cid:17)(cid:16) (cid:9)(cid:6)(cid:5)(cid:8)(cid:9)(cid:16) !(cid:13)(cid:17) (cid:31)(cid:17)(cid:13)(cid:3)(cid:16)(cid:25)(cid:2)(cid:4)(cid:6)(cid:13)(cid:7) (cid:2)(cid:7)(cid:11)(cid:16)(cid:17) (cid:4)(cid:18)(cid:16)
(cid:27)(cid:16)(cid:17)(cid:28)(cid:5)(cid:7)-(cid:13)(cid:31)(cid:10)(cid:17)(cid:6)"(cid:18)(cid:4)%(cid:5)6.
+(cid:18)(cid:10)(cid:3)(cid:6)(cid:25)(cid:5)(cid:6)(cid:3)(cid:5)(cid:31)(cid:5)(cid:17)(cid:4)(cid:13)!(cid:1)(cid:31)(cid:17)(cid:6)(cid:7)"(cid:16)(cid:17)(cid:1)(cid:25)(cid:6)(cid:16)(cid:7)(cid:25)(cid:16)?4(cid:2)(cid:3)(cid:6)(cid:7)(cid:16)(cid:3)(cid:3)$(cid:16)(cid:11)(cid:6)(cid:5)
(cid:3)(cid:31)(cid:17)(cid:6)(cid:7)"(cid:16)(cid:17)(cid:13)(cid:7)(cid:9)(cid:6)(cid:7)(cid:16).(cid:25)(cid:13)(cid:28)
@+(cid:18)(cid:10)(cid:3)(cid:6)(cid:25)(cid:5)#,(cid:16)(cid:17)(cid:9)(cid:5)"(cid:23)(cid:16)(cid:6)(cid:11)(cid:16)(cid:9)(cid:8)(cid:16)(cid:17)")11:
+(cid:17)(cid:6)(cid:7)(cid:4)(cid:16)(cid:11)(cid:6)(cid:7)(cid:27)(cid:16)(cid:17)(cid:28)(cid:5)(cid:7)(cid:10)
(cid:22)(cid:18)(cid:16)(cid:2)(cid:3)(cid:16)(cid:13)!"(cid:16)(cid:7)(cid:16)(cid:17)(cid:5)(cid:9)(cid:11)(cid:16)(cid:3)(cid:25)(cid:17)(cid:6)(cid:31)(cid:4)(cid:6)(cid:14)(cid:16)(cid:7)(cid:5)(cid:28)(cid:16)(cid:3)(cid:26)(cid:17)(cid:16)"(cid:6)(cid:3)(cid:4)(cid:16)(cid:17)(cid:16)(cid:11)(cid:7)(cid:5)(cid:28)(cid:16)(cid:3)(cid:26)(cid:4)(cid:17)(cid:5)(cid:11)(cid:16)(cid:28)(cid:5)(cid:17)(cid:30)(cid:3)(cid:26)(cid:16)(cid:4)(cid:25).(cid:6)(cid:7)(cid:4)(cid:18)(cid:6)(cid:3)(cid:31)(cid:2)(cid:8)(cid:9)(cid:6)(cid:25)(cid:5)(cid:4)(cid:6)(cid:13)(cid:7)(cid:11)(cid:13)(cid:16)(cid:3)
(cid:7)(cid:13)(cid:4) (cid:6)(cid:28)(cid:31)(cid:9)(cid:10)(cid:26) (cid:16)(cid:14)(cid:16)(cid:7) (cid:6)(cid:7) (cid:4)(cid:18)(cid:16) (cid:5)(cid:8)(cid:3)(cid:16)(cid:7)(cid:25)(cid:16) (cid:13)! (cid:5) (cid:3)(cid:31)(cid:16)(cid:25)(cid:6)!(cid:6)(cid:25) (cid:3)(cid:4)(cid:5)(cid:4)(cid:16)(cid:28)(cid:16)(cid:7)(cid:4)(cid:26) (cid:4)(cid:18)(cid:5)(cid:4) (cid:3)(cid:2)(cid:25)(cid:18) (cid:7)(cid:5)(cid:28)(cid:16)(cid:3) (cid:5)(cid:17)(cid:16) (cid:16)A(cid:16)(cid:28)(cid:31)(cid:4) !(cid:17)(cid:13)(cid:28) (cid:4)(cid:18)(cid:16)
(cid:17)(cid:16)(cid:9)(cid:16)(cid:14)(cid:5)(cid:7)(cid:4)(cid:31)(cid:17)(cid:13)(cid:4)(cid:16)(cid:25)(cid:4)(cid:6)(cid:14)(cid:16)(cid:9)(cid:5)6(cid:3)(cid:5)(cid:7)(cid:11)(cid:17)(cid:16)"(cid:2)(cid:9)(cid:5)(cid:4)(cid:6)(cid:13)(cid:7)(cid:3)(cid:5)(cid:7)(cid:11)(cid:4)(cid:18)(cid:16)(cid:17)(cid:16)!(cid:13)(cid:17)(cid:16)!(cid:17)(cid:16)(cid:16)!(cid:13)(cid:17)"(cid:16)(cid:7)(cid:16)(cid:17)(cid:5)(cid:9)(cid:2)(cid:3)(cid:16).
(cid:1)(cid:13)!(cid:4)(cid:25)(cid:13)(cid:14)(cid:16)(cid:17)#&(cid:16)(cid:3)(cid:6)"(cid:7)8(cid:15)(cid:17)(cid:6)(cid:25)(cid:18)B(cid:6)(cid:17)(cid:25)(cid:18)(cid:7)(cid:16)(cid:17)(cid:26)(cid:23)(cid:16)(cid:6)(cid:11)(cid:16)(cid:9)(cid:8)(cid:16)(cid:17)"
(cid:1)+(cid:12)7991933*) 00C<9<1#: 3 < ) 9 1D+(cid:17)(cid:6)(cid:7)(cid:4)(cid:16)(cid:11)(cid:13)(cid:7)(cid:5)(cid:25)(cid:6)(cid:11)#!(cid:17)(cid:16)(cid:16)(cid:31)(cid:5)(cid:31)(cid:16)(cid:17)
Preface
During the last thirty years the emissions of many pollutants such as sul
phur dioxide have been reduced considerably. Besides structural change
between branches environmental innovations can be identified as the main
driving force of this positive development. Nevertheless, there are many
remaining and even new pollution sources so that a sustainable develop
ment requires further technical, social and institutional innovations.
The research programme "Framework conditions for innovation towards
sustainability :[riw]" initiated by the German Federal Ministry of Educa
tion and Research tries to provide the knowledge on the significance and
effects of framework conditions on the generation of innovations that are
able to contribute to the realisation of a sustainable development. Within
this programme, including more than twelve different research projects, an
international working group has been established. The primary target of
this working group was to develop an indicator system allowing to evalu
ate sustainable effects of (environmental) innovations by linking the dif
ferent experiences of the participating projects with the international theo
retical and empirical research on indicators for sustainable innovation.
This volume contains the main research results of the working group.
Besides more conceptually oriented articles the focus lies on the develop
ment of indicators for specific environmental innovation systems.
The editor gratefully acknowledges the financial and organisational
support from the German Federal Ministry of Education and Research and
the Project Management Office for Environment and Climate at the GSF-
National Research Centre for Environment and Health in Munich. Fur
thermore I am grateful to Eberhard Feess, Jens Hemmelskamp, Joseph
Huber and Marco Lehmann-Waffenschmidt for the admission of this vol
ume in the Springer series "Sustainability and Innovation - Nachhaltigkeit
und Innovation" and to Ilja Karabanow and Selina Pohl for their help in
proof-reading and technical edition.
Jens Horbach
Contents
Preface V
Methodological Aspects of an Indicator System for Sustainable
Innovation 1
Jens Horbach
The Innovation Effects of Environmental Policy Instruments 21
Nick Johnstone
Indicators for a Sustainable Technology Development -
A Dynamic Perspective 43
Christian Sartorius
Indicators for Lead Markets of Environmental Innovations 71
Marian Beise and Klaus Rennings
Policy Impacts on Macroeconomic Sustainability Indicators when
Technical Change Is Endogenous 95
Joachim Schleich, Rainer Walz, Bemd Meyer and Christian Lutz
Indicators for Innovations Towards Prevention of Toxic Risks 107
Andreas Ahrens and Amim von Gleich
Environmental Innovations in the Chemical Industry -
Case Studies in a Historical Perspective 125
Melanie MonlJen
A Sustainable Innovation Scorecard for the Electronics Industry
Innovation System 143
Joachim Hafkesbrink and Marianne Halstrick-Schwenk
Water Management Towards Sustainability -
An Indicator System to Assess Innovations 179
Hartmut Clausen and Joachim Hafkesbrink
List of Contributors 205
Methodological Aspects of an Indicator System
for Sustainable Innovation
Jens Horbach
1 Introduction
The aim of this paper consists in the development of a framework for an
indicator system for sustainable innovation. This framework serves as a
basis for the following articles in this book containing detailed indicator
systems for various environmental innovation fields that have been re
garded within the German :[riw] programme (research initiative on sus-
tainability and innovation). The :[riw] initiative of the German Federal
Ministry of Education and Research aims to "... provide the knowledge on
the significance and effects of framework conditions on the generation of
innovations that could contribute to the realisation of a sustainable devel
opment." (Grablowitz and Hemmelskamp 2001).
Firstly, the development of an indicator system requires a definition of
the term "sustainable innovation". The main task of this paper consists in
discussing the relevant dimensions of sustainable innovation from a theo
retical perspective. Furthermore, the problems of the availability of data
for indicator systems have to be discussed. Section 6 contains a synopsis of
the different examples for indicator systems in the involved :[riw] projects.
2 Definitions of sustainability and sustainable
innovation
The term sustainable innovation has not yet been sufficiently defined in the
literature. This is due to the fact that both components of this term are ob
jects of a very broad discussion. In the following this debate will be sum
marised separately for sustainability and innovation. In a second step these
definitions will be combined.
Jens Horbach
Definitions of sustainability
Following the Brundtland report sustainability describes "... a process of
change in which the exploitation of resources, the direction of investments,
the orientation of technological development and institutional changes are
made consistent with future as well as present needs." (WCED 1987). In
other words sustainability means a "development that meets the needs of
the present generation without compromising the ability of future genera
tions to meet their own needs" (Callens and Tyteca 1999). An operational
concept to characterise sustainability has been developed by Daly. His
management rules can be summarised as follows (Constanza et al. 2001 or
Hanleyetal. 1997):
• Renewable resources: the harvest rate is not allowed to exceed the re
generation rate of the resource;
• Pollution: pollution and waste production is not allowed to fall below
the assimilation capacity;
• Non-renewable resources: the depletion of the resource has to be ac
companied by the creation of a substitute.
Especially the last one can pose problems because the optimism of the
so-called Hartwick rule which says that "The stock of capital could be held
constant by reinvesting all Hotelling rents from non-renewable resource
extraction in man-made capital" (Hanley et al. 1997) (concept of "weak
sustainability") is not realistic in all cases. Beyond other arguments, the
Hartwick rule has been criticised because the substitutability of natural re
sources by man-made capital is not always possible. The representatives of
the concept of strong sustainability even assume that natural and man-
made capital are complements. Furthermore, when individuals derive util
ity directly from the environmental capital stock non-declining consump
tion is not automatically equivalent to non-declining welfare over time
(Hanleyetal. 1997).
A practicable concept of sustainability has to combine elements of the
two concepts (see also Rat von Sachverstandigen fur Umweltfragen 2002).
We can depart from the assumption of the so-called weak sustainability
supposing substitutability between the natural and the "artificial" capital
stock. It is not possible to stop oil exploitation abruptly and to use other
energy sources but it has to be the task of environmental (or sustainable)
innovation to make a substitution possible. But in many cases it will be
very uncertain whether adequate substitutes can be found. "Multifunction-
ality in conjunction with uncertainty and with some new findings in the
limited elasticity of substitutability as well as the aesthetic qualities and
social ("biophilic") amenities of unspoiled nature provide some sound pat-
Methodological Aspects of an Indicator System for Sustainable Innovation 3
terns of arguments against weak sustainability."(Ott and Doring 2002) For
that reason it is useful to follow the precautionary principle in environ
mental politics and to use for instance "safe minimum standards" with re
spect to natural capital to avoid restraints resulting from a low elasticity of
substitution between natural and artificial capital (see also Hampicke
1992).
Invention and innovation
The term invention mainly describes the idea and first development of a
new process or product whereas innovation deals with extending this idea
to further development and utilisation of a product or process. Innovations
will only be successful if they provide us with a certain service which we
could not use before or if they improve an existing service and/or if they
lead to lower cost. In the literature, five stages of the innovation process
are distinguished: Recognition - Invention - Development - Implementa
tion - Diffusion (see e. g. Grupp 1997).
Furthermore, innovations can be classified into product- and process inno
vations, organisational and institutional innovations (see also sections 4
and 5).
Environmental and sustainable innovation
Environmental and sustainable innovations represent subsets of innovation
systems. However, they can not be separated from these systems in all
cases. Following a definition of Kemp, Arundel and Smith (2001) "Envi
ronmental innovation consists of new or modified processes, techniques,
systems and products to avoid or reduce environmental damage". Sustain
able innovations can only be successful if they allow for the same use
value at lower environmental cost. For successful market diffusion, it may
even be necessary that the new product has an even higher use value (in
addition to lower environmental damage) (Kemp et al. 2001).
Sustainable innovations not only comprise the environmental dimension
but also economic, social and institutional aspects. They improve the reali
sation of the aims of a sustainable development and represent a subset of
all innovations. Because of the complexity of the ecological, economic and
social system a simultaneous consideration of all levels of sustainability
will not be possible so that we have to concentrate on sustainable innova
tions aiming to reduce environmental impacts. Nevertheless, we have to
consider the economic, social and institutional consequences of sustainable
innovations when constructing an indicator system.
Jens Horbach
3 Relevant dimensions of sustainable environmental
innovation from a theoretical perspective
Even if we focus on ecological sustainability, an analysis of sustainable
innovations requires a broad comprehension of the whole innovation sys
tem including determinants, description of the innovation itself and eco
logical, economic and social impacts (see also table 1). Besides the know
ledge about the innovation itself an indicator system has to consider the
underlying forces of the innovation so that we can learn how to create in
centives for more innovation activities by adequate (environmental) policy
measures. Furthermore, the sustainability of an innovation can only be
evaluated if we know something about its impacts.
The aim of this section consists in discussing the theoretical foundations
and problems of these different dimensions of sustainable innovation.
Table 1. Levels of analysis of an indicator system
Level of analysis Examples
Determinants of sustainable innovation Market demand, „fitting" time window,
environmental policy measures, path
dependencies
Description of the innovation Product and process innovations, or
ganisational and institutional changes,
end-of-pipe versus integrated environ
mental innovations
Ecological, economic and social Emission reductions, income distribu-
impacts tion, employment effects
Determinants (and obstacles) of sustainable innovations
For a long period of time, neo-classical economists stated that technical
progress is exogenous and can therefore not be explained. Contrary to the
simple neo-classical model, new institutional, evolutionary economics and
the new growth theory made attempts for an endogenisation of technical
progress. Up to now, these theoretical developments did not lead to a com
prehensive theory for explaining (sustainable) innovation. Nevertheless, it
is possible to derive the main driving forces of sustainable innovation from
different theoretical explanations. In a second step these determinants have
to be translated in quantifiable indicators.
The main incentive for the innovation activities of a firm consists in get
ting higher market shares and more profit with respect to competitors.
Therefore it is very important to analyse the specific market conditions of
Methodological Aspects of an Indicator System for Sustainable Innovation 5
sustainable innovation because firms are only interested in spending
money for innovation activities if they succeed in capturing the innovation
rents of these activities.
Hence WQ have to include variables like the contestability of the corre
sponding market. E. g. the "... existence of vested interests among indi
viduals (firm owners, managers, w^orkers, researchers and so on) special
ised in the old technologies w^ho therefore are tempted to collude and exert
political pressure in order to delay or even prevent the arrival of new inno
vations that might destroy their rents" (Aghion and Howitt 1998) has to be
considered.
Table 2. Determinants of sustainable innovation
Supply side • offsets (cost savings) caused by environmental innovations
• market characteristics: company size and market structure (monopo
listic structures can prevent environmental innovations because there
is no incentive to innovate at all)
• possibilities for the protection of innovations (problem of internalis
ing the positive externalities (spillovers) of an innovation); attitude to
risk and the uncertainty of environmental innovations: „Asymmetric
information and moral hazard are notable characteristics of the initial
situation of potential users of an innovation." (Klemmer et al. 1999)
• path dependencies: the available technological possibilities (accumu
lation of human capital, available knowledge) induce further innova
tions (technology push hypothesis, see also Hemmelskamp 1999)
• fitting time window for the realisation of the innovation
Demand side • market demand (demand pull hypothesis): state, consumers and firms
• social awareness of the need for clean production; environmental
consciousness and preference for environmental friendly products
Institutional • environmental policy (incentive based instruments or regulatory ap-
and political proaches)
influences • institutional structure: e. g. political opportunities of environmentally
oriented groups, organisation of information flow, existence of inno
vation networks
• pressures from "the world community": e. g. international agree
ments on C02
With respect to sustainable and environmental innovation, innovation
policy plays a very important role because of the existence of externalities
inducing market failures. This is particularly relevant for the initial phase
of an innovation. In later phases, when a specialised human capital and
adequate institutions have been established, the early developed innova
tions will promote further sustainable innovations. These path dependen
cies initiated by policy measures can even lead to economic and social ad
vantages when other countries also begin to demand sustainable
technologies. This is one of the main components of the so-called Porter
