Picking a winner? : innovation in photovoltaics and the political creation of niche markets

Abstract

Innovation theory has pointed to the complex, non-linear character of innovation processes. Heterogeneous networks of actors that include a mixed spectrum of academic, economic, and governmental actors and agencies combine to achieve innovations. Is there any role for innovation policy beyond influencing framework conditions in such a situation? The article analyses the case of a successful innovation in the energy sector: Photovoltaics. It argues that - given the special characteristics of the energy sector – successful innovation depended on strong political support and an advocacy coalition which achieved institutional backing. The method chosen to realize the innovation was the creation of a niche market with the help of regulatory instruments.