G20 Foundation Research Green Growth Forum Communique | Page 73

a process requires a clear set of targets, corresponding institutions and policies to guide
innovation in a desirable direction. While market forces are crucial for accelerating the
pace of innovation and fine-tuning it to match the needs of individual consumer groups,
they are not suitable for leveraging the innovation process to meet broader social goals.
In other words, sustainable innovation and environmentally-friendly economic de-
velopment requires active governance of the innovation system, as outlined in sections
2 and 3. To sustain long-term competitive advantage, policy makers face the task of
embedding markets and market actors within institutional arrangements that are able
to guide the innovation process towards evolving social and environmental challenges.
Those countries that are most successful at delivering solutions that are desirable from
a social, economic and environmental perspective are the most likely to be emulated by
others.
Furthermore, unique capabilities and institutional path dependencies imply that dif-
ferent countries face different starting points for their journeys (Altenburg and Pegels
2012). Firms and the technologies they produce are embedded in a »socio-technical regi-
me« (Geels 2004) that determines not only the speed but also the direction of innovation.
Each country will have to develop solutions based on its unique endowment structure.
On this basis countries facing similar challenges and similar endowments, such as tech-
nological sophistication or demand structure, may choose to adopt innovations with a
proven track record. As Tiwari and Herstatt (2012) point out, it is likely that different types
of lead markets will emerge, serving the needs of different country types (e.g. emerging
economy lead markets or regional lead markets).
Of course, such an integrated approach to competitiveness cannot be pursued in isola-
tion from international trends. Its success depends on the existence of follower countries
willing to learn from the example of pioneer countries. Foreign policy therefore repre-
sents another important entry point for promoting international competitiveness. Jacob
and Bär (2010) suggest the concept of an »environmental foreign policy« focused on
exporting successful environmental policies as a vehicle for promoting associated tech-
nology exports. This allows governments to pursue greater collaboration in the realm
of environmental policy, while improving the international environment for exports from
their home market. In the light of increasing international awareness around environ-
mental challenges, frontrunner countries in the field of environmental policy are likely
to gain international standing, or »soft power« (Nye 2004). This will further increase the
likelihood of other countries to adopt their policy and technological innovations. It might
even generate additional political gains, increasing their political influence beyond the
sphere of environmental policy. Conversely, those countries who fail to adopt ambitious
social and environmental goals run the risk of falling behind not only in their ability to
promote rising living standards (beyond narrowly defined economic growth) but in their
ability to influence other countries and hence compete economically.
Anmerkung: Der vorliegende Text ist auszugsweise dem Arbeitspapier Nr. 5 des Projekts »Lead
Market Strategies: First Mover, Early Follower, Late Follower« aus dem September 2011 übernom-
men, welches durch das Programm »WIN 2« des Bundesministeriums für Bildung und Forschung
finanziert wurde.
Website: http://kooperationen.zew.de/lead-markets
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