ABSTRACT
The third category of factors at the co-institutionalization level is the category of policy and regulation. Policy and regulation can support and stimulate a nation's transformation from an unsustainable into a sustainable version of industry and society. A nation's policy and regulatory framework can show in what direction the nation should develop. It can describe and prescribe for the nation what is allowed, what is prohibited and what kind of business can be preferred for a more sustainable society. National policy and regulation thus can direct the future development of a nation. It can allocate public funding and decide what eco-innovative initiatives will be supported financially. It can state what the government and the governmental organizations will do in the next years to sustain the inhabitability of the country. It can describe what will be done in the fields of social security, preservation and development of natural resources and can anticipate demographic developments in the country. Public policy and regulation are primary a responsibility of governmental organizations, but these organizations need cooperation from commercial firms that put some policy into practice and comply with regulation. Often the governmental departments and organizations develop action programs, plans and projects to implement policy and regulative schemes and try to commit incumbent firms and small and medium-sized enterprises (SMEs) to the implementation of these policies and regulations. In a cooperative process, the nation's policy and regulation can be translated into activities that have to be undertaken by both public and private organizations. Policy and regulation can stimulate and force organizations to grow their eco- and sustainably innovative businesses toward mass production and consumption. Policy and regulation are the third element at the co-institutionalization level of the model of ecoinnovation and sustainability management (see Figure 11.1).
