ABSTRACT
Today, more than ever, with the rise of new tiger economies in Latin America and Asia and ensuing global demand increases for materials, goods and services, there is a dilemma between promoting economic growth, serving the aspirations of people and improving environmental sustainability. Great hopes are attached to innovation in green technology to help resolve this dilemma. In parallel, a business literature has emerged suggesting that here await significant business opportunities. Leading business thinkers now argue that pursuing profits alongside common goods, through including social and environmental challenges in its core strategies, can provide a cascade of innovation and productivity gains for businesses (Hart, 2005; Porter and Kramer, 2011). This idea is certainly not new but has attracted renewed interest in recent years. Still, evidence supporting this claim is based on scattered ‘good examples’ and ‘best practice’, and there is relatively little systematic analysis on what is really at stake in this ‘green race’. What appears clear is that while the private sector does find leverage in green technologies, there are also significant market barriers and uncertainties associated with them. Many new technological solutions that are success stories in reducing CO2 emissions today, such as wind power, biomass-based thermal power, district heating and public transport, have relied – and still rely – on subsidies and other forms of governance arrangements by different actors in the innovation system (IS).
