Making or breaking environmental innovation? :  Technological change and innovation markets in the pulp and paper industry

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Abstract

Purpose

The purpose of this paper is to examine the role of internationally changing market conditions versus national innovation systems (NIS) for environmental innovation in a transforming industry sector, the Nordic pulp and paper industry.

Design/methodology/approach

Based on several case studies of technological innovations in the sector, using data triangulation, crucial factors for environmental innovation are analyzed. The cases focus on bioenergy technologies in pulp mills and on new products from fiber.

Findings

While NIS still supports the networks through which innovations are created, the formation of innovation markets is increasingly dependent on international developments. Environmental innovation is most likely to occur when momentum is created by simultaneous changes in private and policy‐created markets. Environmental policies, increasingly originating at the EU level, have added the final impetus for bioenergy technologies, while for new products the policy effect has been smaller.

Practical implications

National innovation policies must be designed to take into account the internationalizing influences on environmental innovation.

Originality/value

The paper shows the continued importance of NIS in a low‐and‐medium technology sector despite internationalizing markets.