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Challenges and Trade-Offs in Corporate Innovation for Climate Change

Business Strategy and the Environment, Vol. 19, No. 3, pp. 261-272, 2010

18 Pages Posted: 17 Nov 2009 Last revised: 12 Jun 2014

Jonatan Pinkse

University of Manchester - Manchester Business School

Ans Kolk

University of Amsterdam Business School

Date Written: November 17, 2009

Abstract

The international debate on addressing global climate change increasingly points at the role that companies can play by using their innovative capacity. However, up till now companies have been rather cautious in taking decisive steps in facilitating an innovation-based transition towards a low-carbon economy. This paper conceptually explores some key challenges related to innovating for climate change, in the broader context of technological change, complementary capability development and sociotechnical systems to point at trade-offs to be made by companies. We adopt a firm-level perspective to discuss a) how companies strike a balance between further development and deployment of emissions-reducing technologies, in view of the fact that there is no ‘silver bullet’ solution for climate change yet; b) how and in what way low-carbon solutions are brought to the market, by targeting consumers in either mainstream markets or niche markets; c) to what extent the success or failure of climate change innovations depends on companies’ bargaining power and willingness to cooperate with others. The paper shows how several industry and firm-specific factors - technological dynamism, complementarity between new technologies and existing assets, and ownership of specialized assets for commercialization - influence how companies strike a balance between the different trade-offs and deal with the uncertainty created by the current ‘climate policy deadlock’.

Keywords: Climate Change, Innovation, Technology Management, Capabilities, Sociotechnical System, Corporate Strategy

JEL Classification: D21, F23, G28, G38, H71, H77, K32, L1, L2, L5, M1, M14, O13, O3, O31, O32, O33, O38, Q2, Q4

Suggested Citation

Pinkse, Jonatan and Kolk, Ans, Challenges and Trade-Offs in Corporate Innovation for Climate Change (November 17, 2009). Business Strategy and the Environment, Vol. 19, No. 3, pp. 261-272, 2010. Available at SSRN: https://ssrn.com/abstract=1507946

Jonatan Pinkse

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

Ans Kolk (Contact Author)

University of Amsterdam Business School ( email )

Plantage Muidergracht 12
Amsterdam, 1018 TV
Netherlands
+31 20 525 4289 (Phone)
+31 20 525 5281 (Fax)

HOME PAGE: http://www.anskolk.eu

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