UNEVEN INDUSTRY DEVELOPMENT ACROSS EUROPE Wind Turbine Manufacturing in Germany and the UK

PRESENTATION STRUCTURE

Introduction

Overview of Europe’s Wind Energy Market

Theoretical Basis Evolutionary Theory of Technological Change Path Dependency The Role of Institutions

Conceptual Framework Premises Framework

Outlook

Questions

EUROPEAN WIND ENERGY MARKET

New power capacity in 2013: Wind largest share(EWEA, 2014)

Wind resource in Europe: UK best(Risø National Laboratory, 1989)

Market share of installed capacity: Germany 29%, UK 9%(EWEA, 2014)

Market share for NEW capacity installed in 2013: Germany 29%, UK 17%(EWEA, 2014)

UK “PICKING UP” IN DEVELOPMENT (OFFSHORE)

UK No 1 country for offshore development in Europe in 2013

UK market share in offshore more than 50 %

Wind turbine manufacturers: mostly German(EWEA, 2014)

No of active German wind turbine manufacturers: 14No of active British wind turbine manufacturers: 0(The Wind Power, 2014)

Employment in wind energy across the supply chain [2011]: UK: 31.400

Germany: 101.100(RenewableUK, 2012; O’Sullivan et al., 2013)

THEORETICAL BASIS

Linear model of innovation, illustration by Kline & Rosenberg (1986)

Linear Model of Innovation

Origin of innovation in science, clear-cut ‘linear’ process from invention to widely used product

Non-Linear Model of Innovation

Focused on the inter-relationships of all stages, feedback loops, co-existence of ‘knowledge’ and ‘research’ alongside the innovation process, many potential sources of innovation

challenges classical, equilibrium focused views of economic development

Innovation as a continuous, endogenous process

(Rip & Kemp, 1998; Schumpeter, 1959)

Chain-link model of innovation by Kline & Rosenberg (1986), illustration by OECD (1996)

PATH DEPENDENCY

Seeks to explain why sub-optimal technological solutions may prevail in places and whole regions, leading to ‘lock-in’

‘Breaking out’ is thought to be achieved through ‘external shock’(David, 1985; Arthur, 1989)

Similar patterns can apply to institutions(North, 1991; Setterfield, 1993)

ROLE OF INSTITUTIONS

Institutions are• Humanly devised constraints

but also enablers• Formal or informal• Reducing uncertainty• Path-dependent

(North, 1991; Setterfield, 1993; Strambach, 2010)

• Co-evolving with technology and innovation(Rip & Kemp, 1998; Nelson, 2002; …)

Institutional Environment Formal Structures (formal rules,

policies, laws, contracts, regulations, corporate governance, …)

Informal Institutions (norms, values, ideologies, habits, conventions, common beliefs, …)

Institutional Arrangements

Organisational Forms of Institutions (trade unions, public authorities, governmental institutions, social movements, parties, …)

(North, 1991)

TOWARDS A FRAMEWORK

Premise 1:

Agents are constantly influenced by structure as well as they repeatedly recreate it through their behaviour.(Scott, 2008; Pike et al., 2010; Rafiqui, 2009; Giddens, 1984; Giddens, 1979)

Premise 2:

Technological innovation and supporting institutions need to co-evolve in order to create alignment between the two dimensions. Non-alignment leads to barriers to socio-economic development.(Lundvall, 1995; Garud & Karnoe, 2001; Nelson, 2002; Rip & Kemp, 1998; Freeman & Perez, 2008)

Premise 3

1. ADAPTABILITY

INSTITUTIONAL ARRANGEMENTS

co-evolution

PHYSICAL ENVIRONMENT

HISTORY

institutional change

ECONOMIC AGENTS

INSTITUTIONAL ENVIRONMENT

2. ADAPTATION

3. LOCK-IN

hysteresis

interact

decline

technological innovation

!

?

CONCEPTUAL FRAMEWORK

GOING FORWARD

Hope to start Methodology chapter soon…

Quantitative Methods to show the OUTCOMES Spatial socio-

economic analysis to illustrate differences

Mapping the structural differences of the industry

Qualitative Methods to uncover influential FACTORS & REASONSHistorical document

analysis Interviews

Analysis to arrive at an improved framework

+

ELECTRICITY SUPPLY STRUCTURE

THANK YOU FOR YOUR ATTENTION

Camilla M. Chlebna

12112222@brookes.ac.uk

International Student Initiative for Pluralism in Economics

http://www.isipe.net/

COMMENTS AND QUESTIONS

Slide 1:

Wind turbine: http://www.bbc.co.uk/news/science-environment-20857530

Slide 3:

EWEA (2014) Wind in Power – 2013 European statistics. Brussels, BE: European Wind Energy Association

Risø National Laboratory (1989) European Wind Atlas. Roskilde, DK. URL: http://www.windatlas.dk/europe/landmap.html

Slide 4:

EWEA (2014) Wind in Power – 2013 European statistics. Brussels, BE: European Wind Energy Association

O’Sullivan, M., Edler, D., Bickel, P., Lehr, U., Peter F., Sakowski, F. (2013) Bruttobeschäftigung durch erneuerbare Energien in Deutschland im Jahr 2012 - eine erste Abschätzung. Berlin, DE: Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit

Renewable Energy Association, 2013. Renewable Energy: Made in Britain, London, UK.

The Wind Power, 2014. Database of wind turbine manufacturers in Germany and the UK. URL: http:// http://www.thewindpower.net/. Received on 3rd May 2014.

BIBLIOGRAPHY AND SOURCES I

Slide 5:

Kline SJ and Rosenberg N (1986) An overview of innovation. In: R. Landau & N. Rosenberg eds. The Positive Sum Strategy: Harnessing Technology for Economic Growth. Washington D.C., USA: National Academy Press. 275–305.

OECD (1996) The knowledge-based economy. Paris

Rip A and Kemp R (1998) Technological Change. In: S. Rayner & E. Malone eds. Human Choice and Climate Change. Columbus, OH, USA: Batelle Press. 328–372.

Schumpeter JA (1959) Capitalism, Socialism and Democracy (8th edition). London, UK: Ruskin House - George Allen & Unwin Ltd

Slide 6:

Arthur WB (1989) Competing Technologies, Increasing Returns, and Lock-In by Historical Events. The Economic Journal. 99 (394), 116–131.

David PA (1985) Clio and the Economics of QWERTY. The American Economic Review. 75 (2), 332–337.

North DC (1991) Institutions. Journal of Economic Perspectives. 5 (1), 97–112.

QWERTY keyboard original patent and modern laptop keyboard, http://en.wikipedia.org/wiki/QWERTY.

Setterfield M (1993) A Model of Institutional Hysteresis. Journal of Economic Issues. 27 (3), 755–774.

Garud R and Karnoe P (2001) Path Creation as a Process of Mindful Deviation. In: R. Garud & P. Karnoe eds. Path Dependence and Creation. London, UK. 1–40.

BIBLIOGRAPHY AND SOURCES II

Slide 7:

Butterfly and orchid, http://www.babelsdawn.com/babels_dawn/2011/06/how-does-coevolution-work.html

North DC (1991) Institutions. Journal of Economic Perspectives. 5 (1), 97–112.

Path over water, http://www.forresters.co.uk/

Rip A and Kemp R (1998) Technological Change. In: S. Rayner & E. Malone eds. Human Choice and Climate Change. Columbus, OH, USA: Batelle Press. 328–372.

Strambach S (2010) Path dependence and path plasticity: the co-evolution of institutions and innovation - the German customized business software industry. In: R. Boschma & R. Martin eds. The Handbook of Evolutionary Economic Geography. Cheltenham, UK: Edward Elgar. 406–429.

Slide 11:

Ecotricity (2014) Your regional supplier – Who is my regional supplier? URL: http://www.ecotricity.co.uk/for-your-home/check-our-prices/your-regional-supplier retrieved on 14th May 2014

Ene’t GmbH (2014) Karte der Grundversorger Strom URL: https://www.enet.eu/karten/strom.html retrieved on 14th May 2014

BIBLIOGRAPHY AND SOURCES III