RenewGrowth. Conditions for Growth in Renewable Energy Industries. Accessing Global Markets

How do you rethink a thriving economy that is locked into unsustainable, 20th century values, and yet is on the brink of a fundamental upheaval? This is the question we seek to address in the context of the oil and gas giant, Norway. Built on extraordinary oil reserves and access to cheap, abundant hydroelectric power, Norway is at the cusp of a large-scale, structural transformation. As oil reserves are depleted and prices remain stubbornly low, Norway has put forward a plan to develop strong and resilient solar photovoltaic and offshore wind innovation systems (Energi21, 2014). However, the widespread use of cheap hydroelectric power limits the growth of a local market upon which to build and test the newfound expertise it seeks to export. Additionally, the oil and gas industry remains reticent, further hindering innovation system development. Finally, this research employs a comparative study with the Netherlands, which shares many similar characteristics with Norway, such as a large, incumbent oil and gas industry, but has a strong domestic renewable energy market developed to meet its climate pledges (ECN, 2016). The crucial similarities and differences between these cases will thus shed light on the development of these two innovation systems. Hence, we seek to answer the question: What unique and tailor-made conditions are necessary to build an innovation system in the absence of local market demand? The technological innovations systems approach is designed to unearth the key blocking and enabling mechanisms affecting the growth of a given innovation system, and we take the unique case wherein the market lies not locally, but rather globally (Dewald & Truffer, 2011; Hekkert, Suurs, Negro, Kuhlmann, & Smits, 2007). Therefore, we specifically seek to assess key market access strategies linked to diversification, piggy-backing, legitimacy and formal versus informal networks. Diversification is the ability of a firm to take its skills in an overlapping field and apply it to a new field of expertise. The Norwegian case focuses on applying offshore oil & gas extraction and hydroelectric generation competencies to solar PV and offshore wind. Piggy-backing refers to the potential of large and internationally recognized firms to bring up an innovation system by subcontracting project components to other Norwegian firms. The legitimacy of these large firms that has been built up over decades can be used to carry up smaller firms with little international visibility or resources. Finally, we hone in on formal versus informal networks and the value of local contacts. These contacts, such as from previous work experience, collaboration or cultural proximity, behave much differently than formalized networks, such as membership in industry associations. Understanding how and where these networks are developed can shed insight into the development of a fundamental paradigm shift in a unique context. Using a combination of an event-history analysis and in-depth interviews, we seek to unearth the key conditions necessary to develop a budding renewable energy industry in the absence of a local market and what inferences can be understood from a related, but different case. This will help inform policy makers to both bolster industrial growth and ultimately renewable energy diffusion.