evel sthac are ms to gthae sit hire, atthe sect 10 Co-institutionalization by Knowledge and Technology 10.1 INTRODUCTION The second category of factors a the co-institutionalization evel is the category of knowledge and technology. Knowledge and technology are often perceived as a main source of innovation. Knowledge and technol: ‘ay can enable inventions, new designs, production pracesses and marker activities. Technological development can push customers into new rections. Today's industry seems to be on the threshold of being part of 4 sustainable socery, a society that is based on recycling of materials, sus tainabl aesthetics and environmental philosophies of product usage, use of infinite energy sources and clean produetion processes, Technological pment is an ongoing process in modern society, and fem ase part of this process. Large multinational firms are continuously seeking new products and services that will provide tuenaver for the next couple of years. ln addition to having their own research laboratories, they can also invest in relationships with universities and gain access to professors and academic research staff, They ean form RSD consortia in which firms, authorities and universities bundle resources to develop knowledge and technology in fundamental and applied areas. In modern Western indus try, knowledge flows from fem to government to wnivesity and vice versa, These knowledge-transfer processes provide university researchers with the latest insights into societal needs and demands, It enables the govern ment co fund research that has societal urgency. These knowledge-transfer processes give firms the opportunity to develop future markets and t0 contribute to large-scale delivery of new sustainable technologies. With respect t0 sustainability, there can be a growing need for an integration of eco-innovative and sustainable thinking in existing and new product: and service-peoduction processes. Ongoing knowledge production and technological development stimulate organizations at the co-innovation level ro grow their eco- and sustainably innovative businesses covrard mass production and consumption. Knowledge and technology are the second tlement at che co-institutionalization level of the model of cco-innovation and sustainability management (see Figore 10.1)108 Eco-innovation and Sustainability Management \ Figure 10.1. Coinstistionalization by knowledge and technology ‘This chapter organizes the theory that forms che basis ofthe knowledge and technology element of the model (Section 10.2). Ie describes the meth fods that are used to explore the analytical validity of this elemene for in dustry (Section 10.3). Then it explores the analytical value ofthis element in practic (Section 10,4) and in theory (Section 10.5). It concludes with a summary (Section 10.6). 102. THEORETICAL BASIS Nations and firms invest substantial amounts of money in R&D and i the development of new products processes and services thar provide wel fare and well-being to society and financial profits eo shareholders. A clas- sical organizational form of national R&D is that fundamental research ino natural and social sciences is located in universities and that research groups and laboratories that seek opportunites to apply knowledge and {develop new applications and products are located in publie-peivate par nerships and in commercial firms. Today's national organization of R&D is Tess strict and more diffase in the sense tha firms also conduct fondamental(Co-institutionalzation by Knowledge and Technology 109 research and universities also concentrate on the applied and product de velopmental side of science. In addition to this universities and firms tend to develop more intense and close cooperation in R&D consortia in which fundamental and commercial research are mixed to directly serve market and society. Knowledge Flow A nation needs multiple knowledge bases to structure and nurtre innova tion processes. Governments and companies can get acess to the necessary knowledge bases through networking attempts and information-exehange activities of their people (Blindenbach-Driessen and Van den Ende, 2006; Brennan and Dooley, 2005; Chesbrough, 2010; Von Zedwiee and Gassmann, 2002). Innovative companies are often part of knowledge net works that transcend the boundaries of their departments, organizations and industrial sector. Regular contacts with specialists in their networks keep the firms’ people informed of the latest developments in technology, markets and society. In this context, Goverss, Hekkert, GrocneweRen, Worrell and Smits 2001) underpin the immense innovative porential of knowledge neeworks that consist of universities, esearch institutes and knowledge-intensive firms. They demonstrate that the low of knowledge among these actors facilitates the development of new knovled contend that this continuous process of knowledge generation has posi tive influence on innovative activity. Furthermore, Seaden and Manseau (2001) stress the positive effect of programs that promote loose, informal collaborative arrangements and information exchange between organiza tions. R&D can be a part ofthe daily job of all employees. People can be twiggered to frequently contact each other and ealk about “the story of the day,” hear about the latest tends, share insights about changes in market demand and customer preferences and maintain an innovative mindset In the literature, information exchange is frequently mentioned as one of the important stimuli af imovation (Dammann and Elle, 2006; Gluck and Stenberg, 2006). An innovative organization shares and exchanges infor mation withthe ourside world. I gathers information about what i hap pening and, equally important, lets the world know what is happening With and within the firm. Ir enables other companies to decide whether the frm isan interesting partner to work with, co have ties with or to bu from. Toole (1998), for example, argues that manufacturers and retailers that provide information to their business clients about the new products in their portfolios increase the likelihood thae these will be sold, In fine with this, Veshosky (1998) exploves the information-seeking. behavior cof managers and Binds that innovative firms facilitate their managers 0 ‘obtain information and to communicate with members oftheir outside net works. For these contacts and exchange of knowledge, i ean be necessary that a substantial group of people speak a common language. Dammann110 eo nability Management and Elle (2006) contend that when firms in an industry have the same un ‘derstanding of the area in which they innovate, this ha a positive influence fon their innovative performance. In most industries, the loose and lateral Communication structures of projects and organizations can facilitate the xchange of information and the development af knowledge that is needed to innovate (Buelow, 2000) ‘Technological Drive Technological progress can be a source for firms’ innovative activity and can push customers to bay new products and services that result from this fanovation activity. Imovative fms that have the capability to absorb new technological knowledge from thei environment and apply this knowledge vices can offer new alterna to improve and renew their products and tives to the outside world (Cohen and Levinthal, 1990). One concept ‘enables companies to innovate i the concept of combination and recombi nation (Orihata and Watanabe, 2000), This concept means that companies + and assemble existing and new knowledge and technology and, by realize a continuous steam of innovative products and services. A and technology doing company’s capability to combine and recombine knowledg an contribute tothe company’s innovative strength. Kangari and Miyatake 1997}, for instance, investigate the factors that contribute to the develop- ment of innovative technology by firms. They find that many technology Oriented firms focus mainly on the integration of diverse technologies trom various disciplines, In other words, they combine and recombine, and that is their primary way to develop new business. Firms that operate (re) ‘combination technolo need a sound technological basis to be apable of absorbing new technological knowledge (Cohen and Levinthal 1980), Many lower-tech or no-tec firms do not own such a technology and knowledge base and may need a broker or a meeting platform to gain access to technological firms with which to cooperate. In this context, Goverse, Hekkert, Groenewegen, Worrell and Smits (2001) and Seaden and Manseau 2001) stress the importance of national or regional stimulation programs and of bridging institations that enable organizations to get access to the technology they need to innovate. In addition to this, Miozzo and Dewick {2002} argue thet long-term relations between firms and external knowledge centersean be a necessary coordination mechanism to, for example, facilitate access fo appropriate technologies. Kangari and Miyatake (1997) argue that a firm can achieve prominence through strategies cha are based on techno- logical competence. The combination of a firm's technological competences and its ability to (recombine can be a powerful foundation for a technol ‘py strategy. New marker demands are often triggered by new technology bised offerings. Mitropoulos and Tatum (2000) argue in this context that technological solutions developed by innovators often precede the problems they are going to solve. Advanced technology can shape the demands oftheCo-institutionaization by Knowledge and Technology 11 client, and the technological capabilities of leading organizations can be a Source of innovative activity Design for Sustainability [New sustainable knovsledge and technology can be integrated into the de sign of new products (se also Appendix 6). Donnelly, Olds, Blechingen, Reynolds and Beckett Furnell (200) introdice a method to integrate st rainability into the design processes of fiems. They argue that new sustain able products have to he developed because of market needs or ideas that are powerful enough to ereate new markets. Inthe stage of developing, the tnvironmental requirements and specifications of the new product concept have to be taken into aecount, The product ideas and blueprints ae, for xample, subject to envizonmental lass, egulation and standads, customer demands and the firm's own sustainability policy, goals and standards. [n addition to this, a firm has to develop a so-called eco-rondmap. In an ceo roadmap, the company assesses what sustainability features the product must have and how these can he realized by changing the composition of the product. Inthe next stage, the frm translates desig specifications into prototypes and design reviews and develops designs that ean be manufac fured, In this stage, the company has to apply “design-forenviconment procedares in which the designers evaluate the environmental concerns parts and elements of the produce design, including energy efficiency, ‘covironmental hazardous substances and recyclabiliey. The designer for ‘example, use standardized forms, guidelines and checklists to methodolog cally conduct an environmental asessment (sce also Appendix 5). Donnelly, ‘Olds Blechinger, Reynolds and Beckett Furnell’s (2004) method enables the integration of environmental knowledge and technology inthe product de- sign processes ofthe frm. 103. RESEARCH METHOD Additional empirical and theoretical studies are performed to further in ‘crease the analytical value ofthe knowledge and technology element ofthe ‘model of exo-innovation and sustainability management for indasty, Step 1. Shaping the Research Model “This chapter builds on che results from the initial study of Bossnk (2011) sce Appendix 1) It focuses on the knowledge and technology element of ‘the model (Section 10.2) and conducts empirical research inthe Durch food Industry to study how the knowledge and technology element ofthe mode holds for another empirical setting (Section 10.4). Ir carries out a literature review of the influence of knowledge and technology om the sustainable112. Ecovinnovation and Sustainability Management innovativenes of industry to explore how this element of the model can be shaped toward a broader analytical value for industry (Section 105). Step 2. Conducting Theoretical and Empirical Studies Literature databases are consulted for research papers on the influence of knowledge and technology on environmental, ecological, green, social, sci tal biological and sustainably innovative initiatives in industry. In adtion to this, ten managers and experts inthe Dutch food industry are interviewed and asked to elaborate on the influence of knowledge and technology on Sustainable innovation in their industry (De Swaaf, 2008) Step 3. Analyzing and Synthesizing the Studies’ Outcomes The knowledge and technology clement i che initial mode! (Bossnk, 201 1a) is confronted with the additional empirical and theoretical studies. On the vais ofthe outcomes of this analysis, the characteristics of the knowledge for industry (Section 10.5), 10.4 EXPLORING THE EMPIRICAL FIELD The exploratory interviews indicate that today’s knowledge an technologi al development i increasingly directed toward eco-innovation and sustain abil Respondents confirm that the flow of knowledge and technology among universities and other research centers, governments, nongover mental organizations and commercial firms contributes to @ context in ‘which sustainable innovation can flourish. This section is the author's inter pretation by De Swaaf (2008), and quotations ae taken from that source. Knowledge Flow Respondents agree that open innovation routines are important. An open panies and ace tre in which high-tech firms, suppliers, startup com innovation and renewal ‘demic research groups cooperate can be aso ‘This ean be organized in sorcalled science cities, incu tion clusters, networks or high-toch valley. In'a geographic area, firms, knowledge workers, investors and governmental ofcals can come togethe clop new innova to work on promising new business proposals and to de tions, Such a structure can be established and be used to en tiveness ofa region of om a lager scale, a country’s innovativeness. One of the respondents, for example, draws the following picture: “The big firms lite in the center of the action and around them all kinds of smal, perky these saellites discover something satelite star-ups circulate, The mome:Co-instinuto on by Knowledge and Technology 13 ew and valuable they sll themselves to the big firms, and these are going to putin the marke. Last werk I visited a [Dutch sience park]. On the sit, where afew yeats ago a major research facility was located that oper sed under secrecy and was closed for vistors today forey to fy high tech firms operate and these firms are constantly exchanging knowledge” {p. 166). The dynamics of knowledge exchange berween fiems and their agents can be seen as an innovation driving factor in an industry on both a fepional and a national level, Inthe Dutch food industry, ii important to continsously develop new product versions, and therefore cooperation with Giferent organizations ean be imporeant. One of the representatives of a firm in the fod industry remarks: "We need more chan tes with universities, Nowadays many domains are important. Ieis difficult to form R&D cow soria with several fms and knowledge centers, but it is necessary. We do itall the time” (p. 166). To commercialize a new product idea ona national seale, cooperation with many Brms such as market research bureaus and constlkancy firms important ‘Technological Drive Although in past years secret innovation laboratories developed into open innovation networks, fms and other participants in the innovation ne ‘works think ite diffcule ro open wp so others completely. There always is 8 competitive drive between companies and theie employees and between scientists it i dificult to work outside their domains, Scientist have to write proposals ro obtain funding for their own research projets. That is how fur system works. How often da you as a researcher involve people from ‘ther organizations once you obtained funding? It is not eommon practice to do that. We should le specialist fom other organizations in more often, “To develop the bes technology you need the best combinations of special ists and thus specialists from different organizations” (pp. 166-167). The source for technological development can be found in various organizations and in combining knowledge and expertise from these organizations. An interviewee, for example, states thae specialises working on new proces have complementary competences that should be combined: "Nor all R&D specialises have a drive vo desig for enengy- develop new knowledge ina covinmovative practice but ako to ntprte ino the Bran to ty to make ir par of the fms tandaded business Research also sess the importance of using visualization (Caccaor 2008; Whyte, Ewenstin Hales and Tid, 2008) an odibcation pacers {Boh 2007; Caco, 300%; Prencipe and Tel 2001 to improve the an aii, apnlcabiny and tansferailty of the knowledge hat i developed In ianovation projec and that tobe suse in other comets, Aeon to Whye, Fnenstein, Hales and Tid (2008), visualization eechnigus ean be wed to direct proies that explore new elds of iterest and Projects that aim to explode knowledge, techniques, prolapse ot the frm, Visualization contribute to the elfectnenes a sense making by taking the outcomes of work and te inrerfacs between them more Yisibleand available for dcinion among the ram (p 8) In ation to being vistllaed though agrapheal representation, knowledge cn alo be Codie in work procedures, pradit and proces specications and in da aeciatr, 2008; Prenipe an Tl, 2001, Informacion technology can support this coiestion, and, according to Boh (2007) formation ca be arty codified and sored in databases and document, here ican be ascend snl used easily by employees inthe company {p- 30) Operational element of viuaiationandeoiation of knowledge are the one of vial materi such as chart roadmaps, timeline, theee sinensioal drawings, plans and photographs (Caciatoi, 200% Precip and Tal Ewenstein, Hales and Tid 2008) andthe wwe of ompater aided design (CAD) sofware (Whyte, Ewenstin, Hales and Tidy 2008) and networked compsters with eocedes, roadmaps and databases Boh, 2007; Penne and Tell, 2001), Ths visualization and ciation of owed can sipportcompanics in caparing knowledge and technology anon ad othe ecological apace. Many technolo originate tom people’ deie to apr knowledge and rete woething. Knowledge isolren tacit and intangible. By beng captured indesign rawings texts Tnowledge bocomes formalized116 Eco-innovation and Sustainability Management A specifc technology thats frequently used to create sustainable product designs isthe sustainable-design tool. The sustainable design i often based bn lifecycle analysis (LCA) (se also Appendix 5). Innovative commercial firms in industry can apply sustainable-design tools that enable them to choose and. ble materials energy options and design alter natives (ace also Appendix 6), Most design tools are based on life-cycle as casments (LCAs) of products and installations (Manfredi, Pant, Pennington land Versmann, 2011), The LCA qualifies and quantifies all environmental effects arising from the al of a material or prod: tice The design tools offer sustainable alternatives for traditional and unsus: tainable design options. Most design tools quantify and qualify the positive and negative environmental effects of the application of materials, energy Supply and peoduetion methods. Aspects of environmental friendliness that lire qualified and quantified ina sestainable-design tool are, for example depletion of natura tation, acid rain, greenhouse emis: sions recyclabilty, toxicity and biodiversity Finally an administrative instrament that is used by companies tore design business processes and integrate sustainability in their business] processes the environmental management system or corporate socal re {ponsibility policy. According to Donnelly, Olds, Blechinges, Reynolds and Bockete-Furnell (2004), the International Standardization Organization {180) 14000 series of standards can useful for this pur 226), The ISO 14000 norm series provides onganizational guidelines to in rate sustainability into productlesign processes and to develop products swith reduced environmental impact, lower g ‘Guone-depleting substances and redaced smog potential. The standard peo- Sides guidelines to improve a products sustainable performance during its Tite eyle. Donnelly, Olds, Blechinger, Reynolds and Beckett-Furell (2004) subseantiate that all products from a frm need so-called change manage men, which means that, from time to time, produets should be adjusted get new features, be produced in another production plant or be marketed di ferently. For all these changes, also, environmental impact can be assessed and improved. The ISO 14000 norm series ean be of assistance here. For Example, it provides guidelines for the reuse and recycling of products that formally end up as waste. The norm series also prescribes how external a ‘ors and internal auditors can be asked to ceview the sustainable-product ‘design processes, produ jals-handling and usage processes ofthe firm. It prescribes how fims can lear from reviewers com frente and farther improve their system for environmental care. The ISO 14000 norm series is an organizational instrument that can add to design ability ‘ach in this chapter indicates that knowledge and technology can Irdynamie forces and drivers behind the insttutionalization of flow and technological drive nse gas emissions, Fewer for sust The re be power sustainable innovation in industry. Knowled an pu pressure on and provide incentives for fms to generate substantiveCovinstitutionalzation by Knowledge and Technology 7 Tle 10.1 Frame of Reference for Knowledge and Teshaology’s Influence on eo ad Suse technology Knowledge low Knowledge flow isa baie element of novation namie n fs and between rms, ia basic clement of innovation “dynamics in industry ad between indstiey, comes scopraphic knowledge coacentations such we sence parks, science cities and innovation regions, news to be facicated by firms by enabling employees to detwork ith people inside and outside the frm, needs eietion and vsuazation techniques o capture koe Techaologcal Technological rive enables fens to sustain innovate ‘hive eats technology-demanding customers and market, ‘enables fms wo operate archnology state, entice, firms with a (recombination strategy to conta Design for Desig for sustainability rete the ecorinnovative and sustanabilry _“stsainale product ofthe future integrates eo, innovation and sustainability in the strate of proce, integrates ecoinnovation and sustainably in the Brass production processes, exceeds ogatvational boundaies and concentrates oa igernganzatonal value the spply-producton-consumpion-eute chains ses design tools that ae sand an Lhe sustainable business, The frame of reference in Table 10.1 shows the char- acteristics of knowledge and technology that can drive eco- anc! sustainable The researc inthis chapter indicates that knowledge and technology can stimulate organizations to grow their eco- and sustainably innovative bast nesses toward mass production and consumption 106 SUMMARY Knowledge and technology are the second element atthe co-instcuional "zation level ofthe model of eco-innovation and sustainailty, The research shows that knowledge exchange and technological development can enable firms to adope a sustainable technology leadership strategy and become sustainable innovators. By combining and recombining already available J technologies with new sustainable technologies, firms can conguee the man ket and can outperform competitors. Highly innovative rm can rely on ‘heir capacity to absorb and apply the latest knowledge and ta facilitate and118 Ecorinnovation and Sustainability Management stimulate their workforce to interact with experts and people from other de partments organizations and industries. This can add to firms’ capacity to Fhecurate ceos and sustainable knowledge and technology into thei desis for new prodocts and models for new businesses, Knowledge and technol tay are moportant institutional factors that enable sustainably innovating ums to grow large, conquer the marker and change industey, and they are the second factor atthe corinstittionaliation level. The third and last im- portant factor atthe co-nstitutionalization level is policy and regulation, which is the subject ofthe next chapter.