Green Innovation and Future Technology

Engaging Regional SMEs in the Green Economy

F. Kelliher, L. Reinl, F. Kelliher, L. Reinl

• Publisher: Palgrave Pivot
• Year: 2014
• Print ISBN:
  9781137479808
• eBook ISBN:
  9781137479822
• Topic: Business
• Subtopic: Business General
• Index: Business

This book explores green innovation and future technology skill development within regional small to medium sized enterprises. Notwithstanding the goals of a greener Europe, there has been little debate as to how the skills required to fulfil the goals of sustainable development can be imparted within regions and within rural business communities.

1

The Green Economy

S. Bond, H. Gittins, G. Griffiths, D. Harrington, D. Joyner, M. McDonald, E. Owens and M. Walsh

Abstract: Chapter 1 sets out to define the green economy within a ‘post-carbon society’ and contemplates the emerging policy-practice gap from a regional perspective. The authors go on to discuss the challenges and opportunities exposed by this changing economic landscape, and consider green innovativeness as a catalyst for SME-driven regional sustainability. The chapter concludes with a discussion around the green economy transition process in regional SMEs and incumbent capabilities; a long-term and forward-oriented business focus, outward-looking sustainability planning ethos, and concentration on innovation capability enhancement. Combined, these capabilities promote socially inclusive and collective commercial activities to stimulate green growth, while protecting the environment.

Kelliher, Felicity and Leana Reinl. Green Innovation and Future Technology: Engaging Regional SMEs in the Green Economy. Basingstoke: Palgrave Macmillan, 2015. DOI: 10.1057/9781137479822.0006.

As highlighted in the introduction, it is generally accepted that there needs to be a move towards a more environmentally sustainable path of economic growth, and that a green economy affords the potential for mutual delivery of economic and environmental goals. As articulated by the European Environment Agency (2013, p. 5),

the prevailing model of economic growth – founded on ever-increasing consumption of resources and emission of pollutants – simply cannot be sustained in a world of finite resources and ecosystem capacity.

The concept of the green economy has received significant international attention over recent years, and is considered an important tool in addressing sustainable growth (United Nations Department of Economic and Social Affairs, Division for Sustainable Development, 2012). The economic value of the green economy on a global scale was estimated to be $5 trillion in 2010, employing in excess of 30 million people worldwide (Ernst and Young, 2012, citing Innovas Solutions and Kmatrix), while the green sector is projected to increase to the order of $6 trillion by 2015 (Forfás, 2011, citing Innovas Solutions) with an average growth rate of 3.7 per cent per annum for the foreseeable future.

However, the green economy should not solely focus on economics, as this narrow perspective would merely replace one ‘prevailing model of economic growth’ with another. When contemplating a move towards a green economy, mutual delivery of economic and environmental goals is paramount. As articulated in the fifth IPCC Assessment report (2014), compelling evidence of man-made climate change, degradation of resources, negative impact of increasing greenhouse gases and pollution, and land and water degradation points to the need for significant shifts in policy and practice. Notably, the Organization for Economic Cooperation and Development’s (OECD’s) Environmental Outlook to 2050 (OECD, 2012, foreword, p. 3) ‘baseline’ scenario predicts that

unless the global energy mix changes, fossil fuels will supply about 85 per cent of energy demand in 2050, implying a 50 per cent increase in greenhouse gas (GHG) emissions and worsening air pollution. The impact on the quality of life of our citizens would be disastrous. The number of premature deaths from exposure to particulate pollutants could double from current levels to 3.6 million every year. Global water demand is projected to increase by 55 per cent to 2050. Competition for water would intensify, resulting in up to 3.2 billion people living in severely water-stressed river basins. By 2050, global terrestrial biodiversity is projected to decline by a further 10 per cent.

These projections reinforce the need for world economies and international trade to be more sustainable and responsible, while a ‘... growing awareness of humanity’s impact on the environment [has] pushed the “green economy” concept into mainstream policy debate in recent years’ (European Environment Agency, 2013, p. 5).

A transition to a true green economy focused on mutual delivery of economic and environmental goals can help mitigate some of the issues highlighted in the above reports and help economies to move towards the exchange of environmentally friendly goods and services. This holistic approach should significantly reduce ‘environmental risks and ecological scarcities’ while simultaneously improving ‘human well-being and social equity’, thereby assisting with ‘low-carbon resource efficiency’ as well as generating economic opportunities that are ‘socially inclusive’ (UNEP, 2011, p. 16).

1.1A changing economic environment

Contemporary debate considers a ‘post-carbon society’ (UNEP, 2014) and focuses on renewable energy, energy storage and smart grids as a basis for the green economy. European Union (EU) policymakers assert that eco-innovation is critical to supporting our society in the future and minimising the gap between environmental devastation and a comfortable standard and means of living. Policymakers also advocate ‘green technology’ perspectives aimed at acquiring and developing advanced technologies in pursuit of the economic-environment balance at the heart of the green economy. The development of that technology involves eco-innovation in products, processes and, increasingly, services, much of which is provided by small to medium-sized enterprises (SMEs) (European Commission, 2010). In context, the OECD (2011a) highlights that ‘green’ and ‘growth’ can go together, asserting that governments should put in place policies that tap into innovation, investment and entrepreneurship, thereby driving the shift towards greener economies (Fostering Innovation for Green Growth, foreword, p. 3).

Governments, policy officials and industry leaders are all calling for businesses to place a greater emphasis on producing green innovations through more sustainable means in order to contribute to the goal of a greener economy (OECD, 2011a, 2010). Political support is founded on an input-output model of engagement, as reflected in recent policy documents and statements released in Ireland (2011), Wales (2009) and Europe (European Environmental Agency, 2013), each of which posits a government objective of creating a resource-efficient and smart green economy.

A move towards a green economy has the potential to create enhanced trade opportunities for regional SMEs by opening new domestic and export markets for environmental goods and services, by increasing trade in products certified for sustainability and promoting certification-related services, and by greening supply chains. In addition, the adoption of more resource- and energy-efficient production methods has an important role to play in securing regional SME access to existing and new markets. As highlighted previously, this is already a five trillion-dollar sector (2010) and one which is set to grow to the order of six trillion dollars by 2015 (Forfás, 2011, citing Innovas Solutions).

However, there are challenges within this green economy framework. From an economic perspective, improved resource efficiency should produce increased returns, although these could remain detrimental to the environment. With reference to the ecosystem, environmental resilience cannot be at the cost of economics, considering the proposed input-output model and the inherent resource restrictions associated with SMEs. Finally, human well-being requires the equitable distribution of both the benefits and the costs of economic restructuring (European Environment Agency, 2013). Therefore, increasing environmental concerns necessitate a large-scale governmental and corporate economic response, one which ideally entails collaborative action by relevant stakeholders in each context.

1.2Defining the green economy

Before proceeding, it is a worthwhile exercise to contemplate definitions in context. Despite increased research, policy and practitioner attention resulting in a growing body of literature and research spanning multiple disciplines and sectors, there appears to be no generally accepted international definition of a green economy. Previous attempts to define the green economy and green growth cover a spectrum of different ‘shades of green’, from narrow concerns about climate change on the one hand (in line with initial approaches to low-carbon growth), to larger critiques of the environmental sustainability of modern capitalism on the other (Green Growth Leaders, 2011). Otherwise stated, from a scientific perspective, the focus varies between addressing one of the planetary boundaries defined by scientists (that is, climate change) to addressing more holistically the wider range of resource and ecological limits and the general state of the planet. As the European Environment Agency (2013) articulates, ‘the term “green economy” is not consistently defined, as it is still an emerging concept’.

In truth, the terms ‘green economy’ and ‘green growth’ are often used interchangeably despite the fact that green growth occurs from the bottom up, at an operational or a process level, whilst the green economy occurs from the top down, at a macro or strategic level (International Chamber of Commerce, 2012, p. 10). Moreover, there is no set of guiding principles on what constitutes the green economy or how government and policy can truly achieve it. Thus, while there is a general consensus on theme, that is, protecting our environment and natural resources through increased consciousness, there is still an overall lack of definitional scope and precision, leading to a misuse of terminology that ignores the real meaning of green in the context of economic, environmental and social sustainable development.

Prior studies have typically emanated from a variety of disciplines and perspectives, which can be partly attributed to the current confusion in the literature. For example, definitions include ‘a resilient economy that provides a better quality of life for all within the ecological limits of the planet’ (Green Economy Coalition, 2012) versus ‘an economy in which economic growth and environmental responsibility work together in a mutually reinforcing fashion while supporting progress on social development’ (International Chamber of Commerce, 2012). Thus, the term has come to be used rather loosely to refer to a broad range of topics from clean tech and renewables, to green business, job creation and public policy, and the protection of the planet, often depending on context and author. The challenge is therefore to amalgamate existing theories and definitions as far as possible to allow some level of dialogue and shared understanding to occur within this text. Therefore, while the authors acknowledge the limitations of a single definition in light of the above, they have adopted the most widely accepted definition as the following:

A green economy is one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. In its simplest expression, a green economy is low-carbon, resource-efficient, and socially inclusive. (UNEP, 2011, p. 16)

This definition positions the green economy from an ecological economics perspective as being a low-carbon, resource-efficient and socially inclusive economy that enhances energy and resource efficiency, and prevents the loss of biodiversity and ecosystem services. If we accept that ‘the concept of green economy focuses primarily on the intersection between environment and economy’ (The United Nations, 2010) and that ‘achieving sustainability rests almost entirely on getting the economy right’ (UNEP, 2011, p. 17), then policy and practice should ideally operate in unison to ensure the green economy is embraced, and contributed to, by regional economies.

1.3The policy gap

The European Commission (EC) (2007) has established objectives, targets and measures for energy efficiency and renewable energy sources (RES) under its energy policy. Specific measures include

a 20 per cent reduction in total EU greenhouse gas emissions (including both energy and non‑energy-related sources) from 1990 levels;

a 20 per cent increase in energy effici...

Table of contents

• Cover
• Title
• Introduction
• 1  The Green Economy
• 2  The Green Innovation and Future Technologies (GIFT) Concept
• 3  Multilevel Engagement: Theory and Practice Integration
• 4  Reciprocal Knowledge-Transfer Activities between SMEs and Academia
• 5  Green Stakeholder Engagement: The Learning Journey
• Index