Sustainable ICT
Luc Soete
University of Maastricht
Workshop 2B, Regions for Economic Change – Building sustainable growth,
Brussels, May 21st, 2010
A first conceptual part
ICT and the European Digital Agenda: a subset of the innovation debate in
Europe. ICT solutions are basically “innovations”
Reflects also a shift in one thinking about the role of S&T and innovation to
A digital Schumpeterian agenda. Old ideas, new concepts at least in the way we measure them.
A digital Marshallian agenda: ICT solutions and agglomeration effects
A second part focusing on sustainable part of Europe 2020 strategy
[Smart ICT induced growth]
Sustainable ICT solution
Increases in business competitiveness
Delivering public services
It is easy to be eco-innovating
[Inclusive ICT]
Smart specialisation
1. From S&T to ICT as engine
for growth
Good to remember that the focus on industrial science and technology (R&D) is a relatively recent
phenomenon. Long before, experimental development work on new or improved products and
processes was carried out in ordinary workshops. Technical progress was rapid but the
techniques were such that experience and mechanical ingenuity enabled many improvements to
be made as a result of direct observation and small-scale experiment.
Shift in the nature of knowledge accumulation: from industrial, “tight” to more undetermined
outcomes, trial and error science and technology
Traditional industrial R&D based on:
New technological change appears more based upon:
Clearly agreed-upon criteria of progress, and ability to evaluate ex post
Ability to “hold in place” (Nelson), to replicate, to imitate
A strong cumulative process: learn from natural and deliberate experiments
Flexibility, hence difficulty in establishing replication;
Trial and error elements in research with only “ex post” observed improvements
Problems of continuously changing external environments: over time, across sectors, in space; difficulty to evaluate
Particular role of users in the R&D process itself and much larger role for entrepreneurial based innovation
“Codified” parts of knowledge easy, but difficult to appropriate the efficiency improvements leak
quickly away, tacit parts much more difficult, imitation never complete
From industrial to innovation policy
Distinction between novelty and routine reflected in essential
features of R&D definition and its policy support:
Professional R&D with professional S&E manpower versus routine
production with routine high/low skilled manpower
 Dominance in-house R&D over outsourcing, licensing, “open” innovation
 STS activities such as design, engineering, etc. outside of R&D
At innovation side blurring distinction between innovators and users:
Innovation outside of R&D system, associated with entrepreneurs
Innovation as novelty with respect to firm’s market, country’s market,
world market?
 Role of knowledge management, organisational innovation, social
All features of ICT solutions and the digital economy. New
innovation is characterized by ICT solutions.
Back to Schumpeter
Relevance of innovation (policies) at all levels of development. Three broad
categories of innovation policy challenges (Aghion and Howitt):
For high income countries, such as Japan or the EU, the policy challenge is one
of the sustainability of Schumpeterian dynamism
 For emerging economies (BRIC), the challenge appears the design of “backing
winners” innovation policies based on new comparative cost advantages
 For least developing countries, the policy challenge focuses on the disarticulated
nature of the local knowledge systems
Growing scope for mutual learning from each others experiences: relevance
of “community of practice” in many areas. Knowledge sharing shifts the
attention away from the purely technological aspects of research to the
broader organisational, economic and social aspects which are today in
many cases a more important factor behind innovation.
This is reflected to some extent in the much greater popularity of the term innovation today
than R&D
Innovation is at the same time as relevant to poor countries/regions as it is to rich countries.
Back to Marshall
The global dimensions of “collaborative innovation” can go hand in hand
with a huge concentration of R&D efforts in the US, Japan and the EU with
the BRIC countries rapidly catching up… Local agglomeration effects of
knowledge are, however, continuously eroded:
The most important long term enabling factor of ICT will be in enhancing A2K
Not just access to the required knowledge but also to the tools to replicate and improve upon
Access not as passive consumption but as right and ability of participation: as a factor enlarging the
resource base of potential innovators
Crucial role of various communities of practice (innovators, local users, implementers, etc.)
Role of (local) public sector in setting the fences of the commons in nature
but also in innovation, in “creative commons”
In doing so, innovation is becoming less driven by R&D and at the product end by the
continuous search for quality improvements, typical of the old mode of technological
progress, identified with the high income groups in society, but by broader user needs across
At the same time, such innovation demands might feed back to R&D departments in new
ways, further globalising the impact of research.
A new emerging innovation
development paradigm
Innovation, and in particular new product innovations seems to have been driven in
the past by professional use demand and in particular innovation directed towards the
tip of the income pyramid. One may call this the long tail of product segmentation
and product quality.
But there is also a long tail of innovation at middle and low income levels. These
needs have been by and large ignored by private firms. A certain laziness on the
innovation front with massive cost reductions thanks to outsourcing has made many
firms in the developed world slow and unimaginative in their attempts at bringing
innovations on the market (reflected in investment figures lagging behind).
New complex markets at the middle and low end of households.
Top down (Prahalad) from large Western foreign companies: difficult to implement,
insufficient top management support, CSR burden…
Bottom up emerging from grassroots innovation (Gupta) in alliance with firms from emerging
economies: Indigenous innovation: difficulties in up-scaling and reaping scale economies;
Need for close link with development of purchasing power (micro-finance and microinsurance): addresses in general above poverty line households.
Covers a much wider spectrum than consumer good innovations, also in health,
agriculture, communication, also finance…
Role of social innovation
Ultimately one of the most important political innovations in Europe was due to a
trade union, churches and groups of intellectuals in Poland, East Germany and
Debate in Europe today whether we need a new era of “open innovation processes”,
involving the State-the Market-Civil Society. Such innovation will be required for
increasing the resilience of the “European System” (EU Institutions, Member States,
Regions, Cities, Businesses and Networks) in order to cope with the shocks that may
occur in connection with potential crises in the fields of climate change, reduction of
biodiversity and energy.
To do so one needs:
Well-Being Indicators
New guidelines for fiscal Incentives, ecological sub-primes, design of Banks Guidelines
Much stronger participatory democracy as lever for innovation: need for new governance
schemes, new business models, new lifestyles and culture. Innovation and change are
already taking place today in cities and communities (smart eco-efficient and low-carbon
In al these cases ICT solutions play a central role
2. Existing technologies: is it
easy to be green?
Using currently available technologies to control emissions could appear at first sight to be the
most sensible thing to do. However, doing so would fix the energy consumption characteristics of
that machinery and equipment at a level dictated by the present state of technology, whereas
much energy conversion machinery, like a coal-fired or gas-fired power plant, has a technical
lifetime of three decades or more.
In a situation of ongoing technical change, committing investment resources to produce output
now essentially entails foregoing producing those same units of output with even more efficient
equipment in the future. Investment in current technologies entails the loss of the option to invest
in superior future ones.
The result is a tendency to postpone investment not just because of a lack of trust, as in the
present economic crisis, but even in good times for perfectly respectable reasons. From a longterm point of view, postponing investment may have its merits.
Publicly funded R&D will be necessary to share the risks of developing the technologies: this
would provide the private sector with the opportunity to build on these technologies through less
risky, applied R&D. At the same time R&D diversification will be essential so as to ensure that
other potential technology options would either be in the pipeline, or could be scaled up if so
Two central research/innovation
The scale and complexity of the scientific and technological efforts require that measures that
enhance the effectiveness of both public and private research investments and technology
transfers in a wide array of “green technologies”, facilitating also knowledge-sharing, adaptation
and diffusion of innovations.
Two major trajectories of research and innovation can be thought off.
One focusing on reductions in the energy/ecological footprint of high income consumers ( the vertical arrow in the figure below)
One focusing on increasing development in an energy/ecological sustainable fashion (the horizontal arrow in the figure below)
Such a vast research and innovation program also entails a critical rethinking of ways to mitigate
the inhibiting effects on exploratory research and cumulative incremental technology development
that arise from the intellectual property rights regime. Targeted domains for research exemptions,
defined fields in which a liability approach to IPR infringement replaces the existing property rights
approach, and competition policy adjustments to permit efficient pooling of patent, copyright and
database rights, are likely to be needed.
A smart, green economy is therefore less likely to lead to the sort of technology-based
competitiveness monopoly rents and advantages typical of other major technological
breakthroughs. Citizens in Europe, the US, or Japan, are ultimately dependent in their sustainable
future on the speed of (green) knowledge diffusion in both their countries as well as those in the
rest of the world..
The global sustainability smart
research challenge
Research insights from the South:
it is easy to be eco-innovative
Developing markets appear to raise some of the most motivating research/innovation
Autonomy, unwired to high quality infrastructure (energy, water, roads, terrestrial
Low education hence necessity of simplicity in use;
Less maintenance/repair facilities, so an intrinsic need for long term sustainability;
Extreme income inequalities with strong needs in urban slums and poor rural villages, but
little current purchasing power and high living risks, hence low willingness to invest or borrow
money in the long term.
All these features appear also and increasingly of particular value to consumers in
developed countries:
Autonomy of high quality infrastructure as “freedom of movement”;
Shift in the democratization of innovation: from the needs of sophisticated, bèta users to the
needs of (digital) illiterates;
Need for zero maintenance and ecological sustainable: cradle to cradle
Relevance of new financial products such as micro-credit and micro-insurance in poor urban

The triple helix model: sustaining regional innovation in times of crisis