ABSTRACT
Governmental policy plays a pivotal role in creating sustainable industries. Government creates the legal framework within which companies have to operate. It proclaims an environmental policy with which it directly and indirectly directs the governmental organizations and commercial companies. The government may use grants and economic incentives to turn business in an environmentally sustainable direction. The government creates the boundaries and incentives for business to reduce energy and material use, emissions, and waste. Questions that arise here are: To what degree is the government in charge? Has the government the lead or must business also take the lead? It is often argued that both counterparts have the lead and need to be in charge of different aspects of the move toward a more sustainable industry. Questions that come up in this discussion are: Do they have a shared responsibility? Who coordinates their activities at a national level? Should there be coordination on a national level? Many experts assume that the government plays the main role in the greening of industry. Others say that business actually is the party that has to do the greening. Given these points of view, a valid question remains, then, how the government can develop a consistent and coherent policy that enables firms to innovate in an environmentally sustainable way. Contemporary research explores this issue and looks for answers to these questions (Hekkert et al., 2008; Kivimaa and Mickwitz, 2006; Klein Woolthuis, 2009; Sigurdson and Cheng, 2001; Watanabe, 1999). This chapter explores and explains the effects of a government’s national environmental policy on the sustainable innovativeness of an industry. It searches for answers to the following questions:
What are the elements of a national policy for sustainability?
How do these elements contribute to the sustainable innovativeness of an industry?
Can these elements be influenced and by this the sustainable innovativeness of an industry improved?
