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Technology and the Market

Demand, Users and Innovation

Edited by Rod Coombs, Ken Green, Albert Richards and Vivien Walsh

The interplay between demand from the market, the role of users in shaping that demand, and the way in which these factors influence the innovation process has always been a complex one. This forward thinking book examines this interplay from a technological change perspective. The contributors explore the potential for rapprochement between economics, sociological and other social science disciplines in considering the allocation of resources and the making of decisions about technological change. The papers within this book represent a judicious blend of theory and empirical research and look at a broad range of innovations, markets and technologies in medicine, agricultural and food production, services and IT. Technology and the Market raises the question of the many ‘visible hands’ that are involved in linking technology and the market together.
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Chapter 5: Inducement and blocking mechanisms in the development of a new industry: the case of renewable energy technology in Sweden

Anna Johnson and Staffan Jacobsson


Anna Johnson and Staffan Jacobsson INTRODUCTION In the past twenty-five years, a number of renewable energy technologies (RETs), for example wind turbines, have emerged in response both to oil crises and to growing environmental problems. Some of these technologies are now diffusing rapidly in the global market, and a new growth industry is emerging.1 As is commonly the case, this growth industry is unevenly distributed across nations. As many authors emphasize, the study of the development of a new industry requires the use of an analytical framework which includes factors that go beyond the individual firm. These are found within the particular ‘innovation system’ which the firm is a part of and include institutions and networks in addition to markets. The purpose of this chapter is to analyse how the Swedish innovation system has shaped the formation of a local industry that supplies RET.2 The chapter is structured as follows. First, an analytical framework is developed. Second, we describe the empirical field and make a preliminary assessment of the performance of Swedish industry within RET. Third, this performance is explained empirically in terms of mechanisms inducing and blocking the industry’s development. Finally, we discuss some implications for policy. ANALYTICAL FRAMEWORK The process by which new technology emerges and is diffused in society, thereby generating new growth industries, can be studied from a number of 89 90 Technology and the market perspectives. The neoclassical economic perspective focuses on the influence of changes in relative prices. In contrast, seen from...

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